5 true or false Firms having stable and predictable revenues can more safely employ highly leveraged capital structures than can firms with volatile patterns of sales revenue.

2 When a firm's credit standards are relaxed ________.

15 A firm issued $2 million worth of commercial paper that has a

90day

maturity and sells for $1,900,000. The annual interest rate on the issue of commercial paper is ________ (assume 360 days in a year).

A.

10 percent

B.

17.77 percent

C.

21.05 percent

D.

5.26 percent

A.

its costs are expected to increase faster than sales if the standards are not relaxed

B.

its costs are expected to decrease with a corresponding decrease in sales

C.

its profit contribution from sales will be greater than the cost contribution

D.

its sales are expected to decrease with a corresponding increase in costs

24

A firm has a cash conversion cycle of 60 days and average payment period of 40 days. The firm's operating cycle is ________ days.

A.

50

B.

20

C.

30

D.

100

37 A firm's dividend payout ratio is calculated by ________.

A.

dividing cash dividend per share by its earnings per share

B.

dividing cash dividend per share by its net income

C.

dividing net income by its cash dividend per share

D.

dividing earnings per share by its cash dividend per share