1. Cash dividends are paid generally paid quarterly.
2. True
3. False

4 points

QUESTION 2

1. In a stock repurchase,the company uses its cash to buy back its own shares from the marketplace,thereby decreasing the number of shares outstanding.
2. True
3. False

4 points

QUESTION 3

1. A firm's dividend policy determines how much cash it will distribute to its shareholders.
2. True
3. False

4 points

QUESTION 4

1. The date on which the dividend is formally declared by the board of directors is known as the ex-dividend date.
2. True
3. False

4 points

QUESTION 5

1. If an investor acquires shares in acompany before the ex-dividend date, she/he will still receive the dividends for that quarter.
2. True
3. False

4 points

QUESTION 6

1. The tender offer is generally made below the current market price.
2. True
3. False

4 points

QUESTION 7

1. A pro-ratadistribution of additional shares of the stock to current stockholders is known as a cash dividend.
2. True
3. False

4 points

QUESTION 8

1. When a company purchases shares directly from one of its major shareholders,it is usually done on a negotiated basis.
2. True
3. False

4 points

QUESTION 9

1. A firm's capital structure consists of owners' equity and interest-bearing debt.
2. True
3. False

4 points

QUESTION 10

1. "What it would cost to buy the company?"can be answered by calculating the company's enterprise value.
2. True
3. False

4 points

QUESTION 11

1. Modigliani and Miller capital structure theory states assumes high level oftaxes.
2. True
3. False

4 points

QUESTION 12

1. Failure to meet its debt obligations can generate substantial costs to a firm,which are collectively referred to as financial distress costs.
2. True
3. False

4 points

QUESTION 13

1. If a firm's dividends per share are $0.75 and the company's earnings per share are $5.00,the dividend payout ratio is:
2. A.15%
3. B.30%
4. C.50%
5. D.75%

4 points

QUESTION 14

1. The most common method for companies to repurchase theirshares is:
2. A.open market purchase
3. B.tender offer
4. C.initial public offering
5. D.negotiated purchase from a major shareholder

4 points

QUESTION 15

1. If you own 5,000shares of a company,how many shares would you own after a 2-for-1split?
2. A.1,000
3. B.2,500
4. C.10,000
5. D.25,000

4 points

QUESTION 16

1. You own 2,000shares of a company and its market price is $30.If the company declares a 2-for-1split,what would be the new share price of the stock?
2. A.$10
3. B.$15
4. C.$60
5. D.$90

4 points

QUESTION 17

1. The two fundamental attributes of the dividend policy are dividend stability and:
2. A.earnings per share
3. B.net revenue growth
4. C.dividend payout ratio
5. D.high P/E ratio

4 points

QUESTION 18

1. If a company's total liabilities are $25millionand total assets are $100 million, what is the debt ratio?
2. A.0.25
3. B.1.00
4. C.2.5
5. D.4.0

4 points

QUESTION 19

1. Use the following information to calculate a firm's enterprise value:
2. Market value ofequity:$110million
3. Book value of interest-bearing debt:$40million
4. Excess cash:$10million
6. A.$120 million
7. B.$140 million
8. C.$160 million
9. D.$180 million

4 points

QUESTION 20

1. If the net debt of a company is $80million and the enterprise value is $200million,what is the company's debt to enterprise value?
2. A.40%
3. B.60%
4. C.80%
5. D.90%

4 points

QUESTION 21

1. CurrentAssets:$10,750,000
2. Total Assets:$47,350,000
3. CurrentLiabilities:$6,000,000
4. TotalLiabilities:$18,650,000
6. What is the current ratio?
8. A.0.91
9. B.1.16
10. C.1.58
11. D.1.79

4 points

QUESTION 22

1. ABC Corp. is a leader in selling headsets to businesses.The average number of days a headset is held in inventory before being sold is 40 days.The company pays its suppliers in 30 days after the inventory is purchased.In addition, ABC receives cash from all its sales in 20 days after the headsets are sold.
3. What is ABC's operating cycle?
4. A.60 days
5. B.70 days
6. C.80 days
7. D.90 days

4 points

QUESTION 23

1. If $500,000 is borrowed at 6.5% interest rate for 6 months, what is the interest amount?
3. A.$14,500
4. B.$16,250
5. C.$18,750
6. D.$22,500

4 points

QUESTION 24

1. If the current ratio is more than 1, then the net working capital is:
2. A.positive
3. B.negative
4. C.can be positive or negative
5. D.cannot be determined without more information

4 points

QUESTION 25

1. _______________measures the time period from when cash is paid for inventory until the cash is received from accounts receivable.
2. A.Operating cycle
3. B.Cash conversioncycle
4. C.Inventory conversion cycle
5. D.Accounts payable deferral period