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FIN/370 " Week Four” Person Assignment

Answer the next multiple-choice queries:

1 . The combo of debt, preferred stock, and common equity with which the firm plans to boost capital is referred to as the: a) Financial risk b) Functioning leverage c) Business risk d) Target business framework

2 . The extent that fixed costs are used within a firm's operations is called their: a) Economic leverage b) Operating power c) Total leverage d) Foreign risk exposure

several. As a rule, the optimal capital framework is found by determining the debt-equity mix that boosts expected EPS. a) The case b) Bogus

5. In general, a rise in the corporate duty rate might cause businesses to use significantly less debt inside their capital structures. a) True b) Bogus 5. Presume you know that your firm is facing comparatively poor prospects but needs new capital. If you likewise know that shareholders do not have these details, signaling theory would forecast that you will: a) Issue debt to keep up the comes back of collateral holders.

b) Concern equity to share the burden of decreased fairness returns between old and new shareholders. c) The two A and B

6th. The ability to borrow money at a reasonable cost the moment good purchase opportunities arise is called: a) Symmetric information b) Asymmetric information (c) Capital composition d) Reserve borrowing capability

7. The state of texas Products Incorporation. has a section that makes plastic composite hand bags for the space industry. The division features fixed costs of $45, 000 per month, and this expects to trade 45, 000 bags per month. If the variable cost every bag can be $6. 00, what price need to the department charge to be able to break even? a) $6. 00 b) $7. 00 c) $8. 00 d) $9. 00

8. Processor chip Motors provides $20 , 000, 000 in resources, which are loaned with $4 million...

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