Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hey guys, can I get some help with the following questions? 9. Oval Inc. has just paid a dividend of $1.50 per share on its

Hey guys, can I get some help with the following questions?

image text in transcribedimage text in transcribed

9. Oval Inc. has just paid a dividend of $1.50 per share on its common stock, and it expects this dividend to grow by 4 percent per year, indefinitely. The firm plans to issue common stock at $16. The firm's investment bankers believe that new issues of common stock would have a flotation cost equal to 4 percent of the current market price. Which of the following is the cost of newly issued common stock? (Round off the answer to two decimal places.) a. 14.16 percent b. 10.15 percent c. 15.36 percent d. 13.80 percent e. 16.92 percent 10. The method of forecasting financial requirements based on forecasted financial statements is known as the a. pro forma cash flow statements method b. pro forma retained earnings method c. forecasted income and expense method d. projected operating cash flow method e. projected balance sheet method 11. Which of the following statements is correct regarding cash budgets? a. Cash disbursements for credit purchases are not included in cash budgets. b. Only cash inflow from cash sales are included in cash budgets. c. The target cash balance set in cash budgets are fixed. d. Cash budgets do not include cash flow through investment activities. e. Cash budgets include the tax expenses of a firm. 12. A firm is evaluating a new machine to replace an existing, older machine. The change in depreciation is S3,000. The firm's marginal tax rate is 30 percent. Which of the following statements is true? a. Depreciation does not affect the calculation of the supplemental operating cash flow b. Depreciation is added to the after-tax net operating income to calculate the supplemental operating cash flow c. Depreciation expense is added to the initial outlay incurred to purchase an asset. d. Depreciation is deducted from the terminal cash flows from an asset. e. Depreciation is included in capital budgeting only if it exceeds the tax expense of an asset

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Managerial Finance

Authors: Chad J. Zutter, Scott Smart

16th Edition

0136945880, 978-0136945888

More Books

Students also viewed these Finance questions