A In cosvernsion ceeowingons should Reece Windows take if t wants to reduce its increase the average collection period Increase the payables deferral period C. Increase E. Decrease A To. The capital intensity ratio is generally defined as follows the length of time customers are given to pay for the time it takes to sell the inventory the time given by suppliers to pay for the firm's purchase goods Percentage of liabilities that increase spontaneously as a percentage of sales B. The ratio of sales to current assets. C. The ratio of current assets to sales. amount of assets required per dollar of sales, or Ao"/So. divided by total assets, i.e, the total assets turnover ratio. would 7. Which of the following events would make it more likely that a company choose to call its outstanding callable bonds? A. Market interest rates rise sharply. B. Market interest rates decline sharply C. The company's financial situation deteriorates significantly D. Inflation increases significantly E. The company's bonds are downgraded. 8. The preemptive right is important to shareholders because it A will result in higher dividends per share. B. is included in every corporate charter C protects the current shareholders against a dilution of their ownership interests. D. protects bondholders, and thus enables the firm to issue debt with a relatively low interest E. allows managers to buy additional shares below the current market price. 9. Burnham Brothers Inc. has no retained earnings since it has always paid out all of its earnings as dividends. This same situation is expected to persist in the future. The company uses the CAPM to calculate its cost of equity, and its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would REDUCE its WACC2 A. The flotation costs associated with issuing new common stock increase. B. The company's beta increases D. The flotation costs associated with issuing preferred stock increase. . Expected inflation increases. C. The market risk premium declines 2