. Capital structure is the: a. mix of current and long-term assets, such as cash and fixed assets (plants and equipment). b. term a firm has on its equity, such as dividend payment schedules, stock repurchase agreements, etc. c. mix of equity, such as common stock, preferred stock, paid-in capital, and retained earnings. d. mix of debt and equity the firm uses to finance operations and asset purchases.
. Capital structure is the: a. mix of current and long-term assets, such as cash and fixed assets (plants and equipment). b. term a firm has on its equity, such as dividend payment schedules, stock repurchase agreements, etc. c. mix of equity, such as common stock, preferred stock, paid-in capital, and retained earnings. d. mix of debt and equity the firm uses to finance operations and asset purchases.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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1. Capital structure is the:
a. mix of current and long-term assets, such as cash and fixed assets (plants and equipment).
b. term a firm has on its equity, such as dividend payment schedules, stock repurchase agreements, etc.
c. mix of equity, such as common stock, preferred stock , paid-in capital, and retained earnings .
d. mix of debt and equity the firm uses to finance operations and asset purchases.
2. In computing the cost of capital, the cost of debt capital is determined by
3. If a bond's value rises above its par value during its life, interest rates have:
a. interest rate times (1 – the firm’s tax rate)
b. annual interest payment divided by the proceeds from debt issuance.
c. annual interest payment divided by the book value of the debt.
d. the capital asset pricing model .
3. If a bond's value rises above its par value during its life, interest rates have:
a. gone up.
b. Gone down.
c. there is no correlation with interest rates
d. stayed the same
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