Question 1

What is the most correct implication of the additional funds needs (AFN)?

		If AFN is negative, then you must secure additional financing.
		If AFN is negative, then you have extra funds to pay off debt.
		If AFN is positive, then you have extra funds for short-term investments.
		If AFN is negative, then you must issue additional new stock.

Question 7

You currently own 1,000 shares of stock in Beverly Brothers Inc. The stock currently trades at $100 a share. The company is contemplating a 5-for-1 stock split. Which of the following best describes your position after the proposed stock split takes place?

a. You will have 1,000 shares of stock with $100 a share.

b. You will have 1,000 shares of stock with $20 a share.

c. You will have 5,000 shares of stock with $100 a share.

d. You will have 5,000 shares of stock with $20 a share.