5. Which of the following is NOT a true statement about the goal of maximizing shareholders' wealth? A. It takes into account the timing of cash flows. B. It is a short-run point of view which takes risk into account. C. It considers risk as a factor. D. None of the above. A use of cash would be a decrease; a decrease an increase; a decrease C. a decrease; an increase D. 6. in fixed assets or in short-term debt. an increase; an increase AABCD

5. Which of the following is NOT a true statement about the goal of maximizing shareholders' wealth? A. It takes into account the timing of cash flows. B. It is a short-run point of view which takes risk into account. C. It considers risk as a factor. D. None of the above. A use of cash would be a decrease; a decrease an increase; a decrease C. a decrease; an increase D. 6. in fixed assets or in short-term debt. an increase; an increase AABCD

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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Which activity decreases cash? Increasing current liabilities Decreasing fixed assets Increasing long-term debt Decreasing equity
A) Which of the following statement is correct Select one: a. Capital structure is a method of analyzing and comparing substantial future investments and expenditures to determine which ones are most worthwhile b. Capital structure of a company may comprise of Equity Share Capital, Preference Share Capital and Debentures c. Capital expenditure decisions do not involve commitment of large sums of money d. Working capital refers to the mix of different sources of long-term funds e. None of the statement is correct B) The cost of capital of capital of Raysut Cement is 7.12% and the cost of capital of Oman cement is 8.52%. Which company would you choose and why Select one: a. None b. Oman Cement because Profit is high c. Oman Cement because cost is high d. Raysut Cement because cost is low e. Raysut Cement because profit is high
Interpretation No. 46R relates to the issue of whether an investing firm is the primary beneficiary in a variable-interest entity. When is an entity classified as a variable interest entity? Starting with free cash flows from operations, discuss how an analyst would measure free cash flows to common equity shareholders.
In the statement of cash flows, especially cash flows from funding activities, namely ordinary share capital. if the share of ordinary capital in the current year has decreased from the share of ordinary capital in the previous year. What causes this decline in ordinary share capital? and what are the consequences for cash flow?
For Discounted Cash Flows to be useful, individual investors and companies must estimate a discount rate and cash flows correctly. Select one: a. True a. False
A negative Cash Flow to stockholder means?
Which of the following is not true about the information provided in the income statement? OIt helps in evaluating the past performance of the enterprise. O It provides a basis for predicting future performance. It helps assess the risk or uncertainty of generating future cash flows. O It helps in evaluating working capital.
Which of the following best describes what investors in shares seek compensation for? The risk-free rate of return plus time value of money OA. O B. The loss of interest on a building society account plus the dividend yield on shares Inflation and risk only OC Sacrifice of immediate use of cash otherwise available for consumption, inflation and risk OD.
Which of the following statements is FALSE?i. Using the payback rule, you can calculate how much profits are earned over the investment period.ii. The IRR is sensitive to the timing of the cash flows.iii. Shareholders have the first claim on the cash flows of the company.
How can changes in working capital items, such as accounts receivable and inventory, affect the cash flow statement, and how can these changes be interpreted by investors and creditors?
12. The statement of cash flows should not be used to evaluate an entity s ability to: (a) earn net income. (b) generate future cash flows. (c) pay dividends. (d) meet obligations
All the statements are incorrect regarding current ratio except? a. The more predictable a firm's cash flows, the higher the acceptable current ratio. b. A higher current ratio indicates a higher return on equity. c. The more predictable a firm's current ratio, the higher the clyrent liabilities. d. A higher current ratio indicates a greater degree of liquidity.

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