You are comparing the dividend payout ratios across firms in the same sector. Which of the following types would you expect to have the lowest dividend payout ratios? A Small, low growth firms B. Small, high growth firms C. Large, low growth firms D. Large, zero growth firms The capital intensity ratio is generally defined as follows: A The ratio of sales to assets B. The ratio of cash to sales The ratio of assets to sales D. The ratio of liabilities to sales. Dividends are often described as "sticky" What does it mean? A Companies are reluctant to change earnings per share B. Companies are reluctant to change dividend per share C. Companies are reluctant to change tree cash flows per stare D. None of the above A firm has $800 million in debt outstanding and $200 million in market value of quity is current debt capital ratio is 80%. The firm is having trouble making its interest payments. It sells a division with an estimated value of $100 million and use the proceeds from ale to retire deht, what will the debt capital ratio be after this traction? A679 B. 70 C789 D. 899 Assume that investors pray 40% tax rate on dividends and 20% tax rate on capital gains A tim stock trades at $30/share and has an ammual dividend of St/share. If tomorrow is the ex-dividend day, what would be the stock price at the end of the day A $29.75 B530.75 CS29.24 DS30 Timey plans to bring theme park mm, and towns the usere really. The mus undeveloped and was purchased several years ago. The land currently can be sold at a price much higher than the purchase price. In assessing the theme park project, how would you estimate the land cost A The land cost is to because it is a sunkost B. The land cost is to because the project does not pay anything for using the land, The land cost is a considerable amount becuse it is an opportunity cost D None of the above Two phjects have the same NPV oft million. The first project needs an initial investment of $20 million and the second project needs an initial investment of $10 million. Which project should you choose if they are mutually exclusive A The first project B. The second procet C Both projects D.None of the above Carrapantes tend to put a constraint on the band rating That is, they do not allow the debt rutin to increase so much that the rating drops below the constraint. For non-financial firm, the constantino BBB (investment grade) Which of the following teen explain the contri A firm's capital supply can be abundant and infinito once its muting become junk BA firm's products and services and significantly once its rating becomes junk CA firm's cost of det antic dramatically nice its ratint drops below investment rude All of the hove A new project of Disney is to build a theme park in Brat 20% of the total revenues of the new project will be ponended from people who would have gone to Disneyland in Orlando If the project did not exist Disney a brand name in this type of busines. Assume that Diney will not lose the 20' is market to any other competitors at all What is the proper estimate of Tevenue for the new project of the total tenues of the new project 100% of the total revenues of the protect 120% of the ovence of the new project D. None of the above Utility firms tend to have high debt ratios because they are regulated, and their earnings are stable. If the utility market is opened up to free competition, utility firms will have volatile carnings. What change would you expect to see in the debt ratios? A No change B Debt/capital ratios will be 100% C. Debt ratios will go up D. Debt ratios will go down 12) A firm has no debt right now and tries to find its optimal debt ratio. It has a tax rate of 30%. Its insider holdings are 50% of outstanding shares. Its standard deviation of operating carning is 10%. Based on the following regression, what is the predicted debt ratio for the firm? Predicted debt/capital ratio 0.3+0.25(tax rate) 0.15(insider holdings) - 0.20 d.) A 389 B 36% C 30% D. 28%