MCQ

Apex Analytics is an all-equity firm with 50 million shares outstanding. Apex has $30 million in cash, and expects future free cash flows of $8 million per year. The cash can be used to expand the firm's future operations, increasing future free cash flows to $10 million per year. If Apex's cost of capital for the expansion is 8%, what will be the difference in the firm's share price compared to using the cash for a share repurchase? Select one: O A. Share price is $0.10 higher with expansion B. Share price is $0.10 higher with repurchase. O C. Share price is the same with both options. O D. Share price is $0.50 higher with expansion. O E. Share price is $0.50 higher with repurchase The costs and benefits of a corporate governance structure Select one: O A. are the same for all companies within a country. O B. depend on cultural norms. O c. are easily quantified. O D. are the same in all countries. O E. are not important in maximizing shareholder wealth. Which of the following is an example of an agency problem? Select one: A. managers using cash to increase dividends B. the manager owning a great deal of stock in the company O C. managers not working as diligently if they are not the sole owner of the business D. the board of directors firing an incompetent manager O E. a corporate raider attempting to purchase the company Clear my choice