Question
I just need the answers here, no explainations Q6 a) Which of the following reasons would cause a firm to want its share price to
I just need the answers here, no explainations
Q6
a)
Which of the following reasons would cause a firm to want its share price to rise?
The firm's employees hold company shares due to a company stock purchase plan and a increase in share price would positively affect morale. | ||
A higher share price would make the firm less likely to be a takeover target. | ||
If the firm wants to issue new shares, a higher share price means that the firm has to issue fewer shares and current ownership will less diluted. | ||
A company's share price indicates the market's perception of the overall health of the firm, and is closely watched by suppliers, customers and lenders, as well as shareholders.
|
b)
If a bond is selling for less than its par value which one of the following statements would be true?
Interest rates has increased. | ||
Inflation expectations have decreased. | ||
The credit risk of the issuer has decreased. | ||
Interest rates have decreased. |
c)
Which of the following statements are CORRECT regarding the advantages for a firm of issuing debt rather than equity?
The interest payments on debt are tax deductible. | ||
There is no change in ownership. | ||
The firm cannot go bankrupt if it misses interest payments on its debt. | ||
The firm does not give up any voting rights. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started