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QUESTION 22 Consider $5MM to be paid in five years. If the risk premium investors assign to this cash flow increases its present value increases
QUESTION 22 Consider $5MM to be paid in five years. If the risk premium investors assign to this cash flow increases its present value increases decreases stays the same QUESTION 23 Which of the following is true of (ordinary) preferred shares? The larger a company's profit, the higher the dividend paid on preferred stock You should expect a higher return from a company's preferred than from its common shares Preferred shareholders have priority in payments from a company in bankruptcy relative to the company's bank and bond creditors None of these QUESTION 24 A company begins with the following simple balance sheet S10 million in real assets $1 million cash $5.5 million each in owners equity and debt the following actions will decrease a company's leverage ratio? Choose two Use half of the cash from the balance sheet to purchase equipment O Borrow an additional $1 million and purchase equipment
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