Question
Which of the following corporate debt ratings are ordered in terms of decreasing market interest rate? Select one: A. AAA, A, BB, C B. A,
Which of the following corporate debt ratings are ordered in terms of decreasing market interest rate?
Select one:
A. AAA, A, BB, C
B. A, AAA, BB, C
C. BB, C, A, AAA
D. C, BB, A, AAA
E. None of the above
2)
Rochester Corp. holds a 15% equity investment in LaCrosse Inc. Reedsburg Investments holds 45% of LaCrosses stock. On October 1, 2017, LaCrosse declares and pays dividends to its stockholders. How will the dividend affect each companys net income for the year?
Select one:
A.
Rochester |
| Reedsburg |
No effect |
| Increase |
B.
Rochester |
| Reedsburg |
No effect |
| No effect |
C.
Rochester |
| Reedsburg |
Increase |
| No effect |
D.
Rochester |
| Reedsburg |
Increase |
| Increase |
E. There is not enough information to determine the effect.
3)
Which of the following is an inconsistency of using market multiples to determine value?
Select one:
A. Using a market multiple assumes that the target company is correctly priced, while comparable companies are mispriced.
B. Using a market multiple assumes that the target company can be fully described by its summary performance measure.
C. Using a market multiple assumes that all companies are mispriced.
D. Using a market multiple assumes that the target company is mispriced, while comparable companies are correctly priced.
4)
Which of the following would not be used as a summary performance measure when using market multiples to determine value?
Select one:
A. Net operating profit after tax
B. Net operating assets
C. Stock price
D. Book value
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started