Need help with 10 MCQs . Please see the attachment.

Both Alward and Rafter are large public corporations with subsidiaries throughout the world. Alward uses a centralized approach and makes most of the decisions for its subsidiaries. Rofter uses a decentralized approach and its subsidiaries make most of their own decisions. Which of the following is correct? agency costs would be the same for both companies a decentralized approach is almost always better a centralized approach is almost always better the agency problem would probably be more pronounced for Alward because of a higher probability that subsidiary decisions would conflict with the parent none of the above Which of the following is not normally regarded as a barrier to hostile takeovers, Targeted share repurchases. Shareholder rights provisions. Abnormally high executive compensation. Poison pills. all of the above Which of the following is normally regarded as being a good reasons to establish an ESOP? To enable the firm to borrow at a below-market interest rate. agency costs would be the same for both companies To help retain valued employees. All of the above none of the above McDaniels Company plans to issue 20-year bonds with annual interest payments and with 25 warrants attached. The investment banker estimates that each warrant will have a value of $5.00. A similar straight-debt issue would require a 10% coupon. What coupon rate should be set on the bonds-with-warrants so that the package will sell for $1,000? 9.94% 8.53% 8.83% 4.13% none of the above Baker, Inc. just sold a bond with 20 warrants attached. The bonds have a 30-year maturity and an annual coupon of 10%, and they were issued at their $1,000 par value. The current yield on similar straight bonds is 12%. What is the implied value of each warrant? $7.47 $8.06 $0.00 $1.00 none of the above Reuth Corporation has 9% convertible debentures that were issued at par, and currently sell for $750. Each debenture can be converted into 35 shares of common stock. The company's current stock price is $25. What is the conversion value of the bond? $875 $965 $975 $725 none of the above Roth, Inc. issued convertible bonds at their $1,000 par value 5 years ago The bonds currently sell for $1,050. At any time prior to maturity on August 1, 2031, a debenture holder can exchange a bond for 40 shares of common stock. What is the conversion price,? $1.25 $26.25 $25.00 Not enough information provided none of the above Which of the following statements is most correct? Preferred stock cannot have a convertible feature, but bonds can. From the investor's point of view, preferred stock is less risky than bonds. From the issuer's point of view, preferred stock is less risky than bonds. Preferred stocks always have a specific maturity date, generally 25 years or less. none of the above Which of the following statements concerning warrants is correct? Warrants are long-term naked options that must be exercised within 10 years after issuance regardless of the firm's common stock price. Warrants are long-term put options that have value because holders can sell the firm's common stock at the exercise price regardless of how low the market price drops. Warrants are long-term call options that have value because holders can buy the firm's common stock at the exercise price regardless of how high the stock's price has risen. Both convertible bonds and bonds with warrants bring new equity capital into the firm when exercised. . none of the above Which of the following statements is most correct: One important difference between warrants and convertibles is that convertibles bring in additional funds when they are converted, but exercising warrants does not bring in any additional funds. One important difference between warrants and convertibles is that warrants bring in additional funds when they are exercised but converting bonds does not bring in any additional funds. Both convertible bonds and warrants bring new equity capital into the firm when converted or exercised. Warrants can sometimes be detached and traded separately from the debt with which they were issued, but this is unusual. none of the above