6.Why is the cost of debt normally lower than the cost of preferred stock? a. Preferred stock dividends are tax deductions. b. Interest is tax deductible. c. dmon stock dividends are not tax deductible.
Preferred stock dividends must be paid before common stock dividends
7.An appropriate capital budgeting process requires that the following steps are taken in which order? a) collection of data b) reevaluation and adjustment c) evaluation and decision making d) search for and discovery of investment opportunities a. d, a, c, b b. d, a, b, c c. d, b, a, c d. b, d, a, c
8.Which of the following is NOT a condition under which a prudent manager would accept some risk in financing? a. Inventory is highly perishable c. Price of inventory is stable d. Easy access to capital markets
9.The purpose of secondary trading is to: a. provide liquidity and competition between investments. b. provide a market to issue securities not handled in primary trading. c. provide jobs for brokers and dealers. d. provide lower commissions than on the organized exchanges.
10.The floor price of a convertible bond cannot fall below the: a. conversion ratio. b. conversion price. c. conversion premium. d. pure bond value.
CLICK HERE TO DOWNLOAD THIS TUTORIAL INSTANTLY $ Only 1. Which of the following is NOT a way that the Confederacy was like the North? Each government financed the war through taxes and issuing paper money. Both presidents, despite little military background, ably directed the war effort. Each government relied initially on volunteer soldiers, but later had to institute a draft, which provoked deep hostility. Continue reading «A common stock which pays a constant dividend can be valued as if it were: a»