1.Dividend smoothing is in the best interest of the shareholders.

True

False

2.EOQ describes the amount of inventory that a company will sell in a year.

True

False

3.Companies should strive for a current ratio less than or equal to 1.

True

False

4.EOQ minimizes inventory costs such as holding and ordering.

True

False

5.Under the pecking Order Theory of finance, a company will get funds to finance a project in the order of:

A.Internally-generated funds, stretch net working capital, borrow from bank, public debt, common stock, preferred stock

B.Internally-generated funds, stretch net working capital, borrow from bank, common stock, preferred stock, public debt

C.Internally-generated funds, stretch net working capital, public debt, borrow from bank, common stock, preferred stock

D.Internally-generated funds, stretch net working capital, borrow from bank, public debt, preferred stock, common stock,

E.None of the other answer

6.The goal of finance is to maximize shareholder wealth, and the dividend policy that goal is

A.Constant dividend policy

B.Dividend smoothing policy

C.Stable dividend policy

D.Residual dividend policy

E.None of the other answers.

7.A company will institute a stock repurchase for any of the following reasons EXCEPT

A.Management believes that shares of stock are undervalued

B.Tax reasons

C.Don't want to create expectations like a dividend payment

D.Reduce the number of shares on the market

E.All the other answers are reasons