A company calculates its discretionary financing needed and determines this amount of capital cannot be raised at a reasonable cost Which of the following would reduce the amount of discretionary financing needed A reduce the company's net profit margin B reduce the company's sales growth rate C increase the company's dividend payout ratio D increase the proportion of the company's sales that are made on credit Accrued wages and accrued taxes are considered to be A permanent sources of financing because companies must always pay wages and taxes B spontaneous sources of unsecured short term financing C secured sources of short term financing D current assets General Electric (GE) has been a public company for many years with its common stock traded on the New York Stock Exchange If GE decides to sell 500,000 shares of new common stock, the transaction will be describe as A a money market transaction because GE raises new money to fund its business B an initial public offering C a secondary market transaction because GE common stock has been trading for years D a seasoned equity offering because GE has sold common stock before What provision entitles the common shareholder to maintain a proportionate share of ownership in a firm A the proportionality clause B the cumulative feature C the convertible feature D the preemptive right Crawley, Inc has a line of credit with HNC Bank that allows the company to borrow up to $800,000 at an interest rate of 12 percent However, Crawley, Inc must keep a compensating balance of 18 percent of any amount borrowed on deposit at the bank Crawley, Inc does not normally keep a cash balance account with HNC Bank What is the effective annual cost of credit A 12 40 B 12 83 C 14 63 D 15 47

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A company calculates its discretionary financing needed and determines this amount of capital cannot be raised at a reasonable cost. Which of the following would

A company calculates its discretionary financing needed and determines this amount of capital cannot be raised at a reasonable cost. Which of the following would reduce the amount of discretionary financing needed?

reduce the company's net profit margin

reduce the company's sales growth rate

increase the company's dividend payout ratio

increase the proportion of the company's sales that are made on credit

Accrued wages and accrued taxes are considered to be

permanent sources of financing because companies must always pay wages and taxes

spontaneous sources of unsecured short-term financing

secured sources of short-term financing

current assets

General Electric (GE) has been a public company for many years with its common stock traded on the New York Stock Exchange. If GE decides to sell 500,000 shares of new common stock, the transaction will be describe as

a money-market transaction because GE raises new money to fund its business

an initial public offering

a secondary market transaction because GE common stock has been trading for years

a seasoned equity offering because GE has sold common stock before

What provision entitles the common shareholder to maintain a proportionate share of ownership in a firm?

the proportionality clause

the cumulative feature

the convertible feature

the preemptive right

Crawley, Inc. has a line of credit with HNC Bank that allows the company to borrow up to $800,000 at an interest rate of 12 percent. However, Crawley, Inc. must keep a compensating balance of 18 percent of any amount borrowed on deposit at the bank. Crawley, Inc. does not normally keep a cash balance account with HNC Bank. What is the effective annual cost of credit?

12.40%

12.83%

14.63%

15.47%