The Pearson Co. currently has a 25 day cash cycle. Assume the firm changes its operations such that it increases its receivables period by 3 days, decreases its inventory period by 2 days, and decreases its payables period by 5 days. What will the length of the cash cycle be after these changes?

Select one:

a. 23 days

b. 29 days

c. 19 days

d. 31 days

e. 35 days

Question 18

The weighted average cost of capital can also be defined as the:

a. Adjusted homemade leverage rate of return.

b. Market weighted cost of equity financing.

c. Rate of return based on net book value.

d. Basis of M&M Proposition I.

e. Required return on a firm's overall assets.

Question 19

a. A preliminary prospectus distributed to prospective investors in a new issue of securities.

b. The creation and sale of securities on public markets

c. The purchase of securities from the issuing company by an investment banker for resale to the public.

d. A public issue of securities in which securities are first offered to existing shareholders. Also called a rights offering.

e. Legal document describing details of the issuing corporation and the proposed offering to potential investors.