S1 Sufficient working capital is needed to prevent business from becoming insolvent S2 Preference shares is a source of short term finance   both are true both are false only S1 is true only S2 is true

Q: QUESTION 4 Which of the following statement O A. The DuPont Identity is used t O B. A company can…

A: The DuPont Identity is used to calculate Return on Assets.  Above statement is false. Dupont…

Q: The widely publicized subprime lending crisis was NOT caused by

A: Assets: These are the resources owned and controlled by business and used to produce benefits for…

Q: None

A: Step 1:a) The greatest price a decision-maker would be prepared to pay to have complete knowledge of…

Q: In the absence of market imperfections and taxes, stock repurchases are same  as cash dividends. How…

A: Two common ways companies distribute profits to their shareholders are through cash dividends and…

Q: [S1] Share warrants are often attached to debt instruments to entice creditors to also become…

A: Detachable warrants can be removed by the holder and sold separately on the secondary market. They…

Q: When a dividend has been declared , it becomes a liability of the firm and can not be recinded…

A: Dividend payments are distribution of profits or earnings by a company to its shareholders. The…

Q: Which of the following statement about capital structure is INCORRECT? O With financial distress,…

A: Let's go through each statement to understand why the others are correct:Capital structure should be…

Q: A Moving to another quesbion will Save this respose. Question 2 Dividend payements does not depend…

A: Dividend policy means financial policies regarding company uses structure to dividend payout to…

Q: 1. What are the primary advantages of private equity? C a. High capital requirements b. None of the…

A: Private equity is a form of financing in which investors and funds directly invest in the private…

Q: Within Corporation, one key value of limited liability is that it lowers owners' risks and thereby…

A: 1. owners risk is limited to the amount he invest and because of this the limited liability company…

Q: True or false  According to the pecking order theory of capital structure firms should never issue…

A: Capital structure is the combination of different sources of finance for the company's assets.…

Q: Which of the following may not affect retained earnings or earned capital? O Correction of prior…

A: Profit and loss for the period and correction of prior period error may affect the retained…

Q: Which of the following is not popular in the present business scenario? O a. None of the options O…

A: Business can be defined as the organization or entity  that is engaged in commercial, professional,…

Q: Once established, dividends cuts are hard to make without adversely affecting a firm’s stock price.…

A: Dividends are payments that a company makes to its shareholders or stockholders. Essentially…

Q: 12) Stock repurchase is one of the ways to increase a firm's debt to equity ratio

A: Stock repurchase is the term used for buying back the shares already issued to investors.

Q: the effect of Treasury shares are resold at more than cost on total equity is No Effect Can't be…

A: The treasury shares are the shares that have been reacquired by the issuing firm from the…

Q: Generally, managers of corporations prefer internally generated cash to finance their capital…

A: The preferences of corporate managers when it comes to financing capital expenditures

Q: Assume we are in a M&M frictionless world EXCEPT that we have bankruptcy costs only. Under these…

A: In the Modigliani and Miller (M&M) propositions without taxes and other frictions, capital…

Q: one of the following is true regarding the business and financial risk: Select one: a. the business…

A: Business risk refers to that type of risk which involves the decline in profitability and stability…

Q: QUESTION 53 As Fis consolidate and expand their range of financial services, customer relationships…

A: True. It is important for a firm to maintain customer relationships with commercial entities when it…

Q: True or False Statement 1. A reason that companies tend to favor distributing excess cash as…

A: False. The statement is partially correct, as dividends are often taxed at a lower rate than gains…

Q: Regardless of the situation, no well-managed firm would borrow money to pay dividends to…

A: Corporations pay dividends out of the earnings to the shareholders as compensation for the funds…

Q: Question 1 Stock price never reacts to the unanticipated changes in the dividend. As it has no…

A: The question is related to Dividend Policy.

Q: Which of the following is Correct? Cash dividend has no impact on the market value of the company.…

A: Stock also known as equity or shares represents ownership in a corporation. Stock is a type of…

Q: Company insiders who can earn excess profits on company stock based on their private knowledge…

A: Stock price depends on the information. As people get information, they start pricing the stock…

Q: loss on trading securities? a. Stockholders' equity decreases, and liabilitie

A: The correct statement is : a) Stockholder's equity decrease , and liabilities increase .

Q: Pari, a financial advisor, emphasizes to his clients the importance of asset allocation in…

A: Asset allocation is an investment strategy that involves dividing an investment portfolio among…

Q: In what way does paying off a liability impact stockholder's equity? negatively positively no…

A: The financial statements of the business are classified as balance sheet, income statement and cash…

Q: 34. The concept of optimum capital structure is based on the assumption that the prudent use of debt…

A: The statement is True. The concept of optimum capital structure is indeed based on the assumption…

Q: تر أحد الخیارات None of the options Inefficiency of management Increase cost Reduce the risk

A: Management and shareholders exist in agency situations in the corporation.

Q: 4. What is the result of repaying debt? (Ignoring changes in the cost of capital) A B C D A decrease…

A: 1)Debt is a liability.Repayment of debt  involves  reduction of liability and reduction of cash. 2)…

Q: in the

A: Introduction : In simple words, when the stock in the market are trading above their estimated, they…

Q: are riskier than th are re les risky than of the listed iter as a met

A: Introduction: Corporate bonds as the name indicates are the debts that are issued by the companies…

Q: 2.322Both investors and companies employ leverage (borrowed capital) whenattempting to generate…

A: Advice to Prevent Collapse1. Reduce Leverage: By lowering the leverage ratio, Lehman Brothers might…

Q: Which of the following statement is true? Select one: O A. One drawback of the P/E multiples is that…

A: The price to earning multiple ratio is a relative valuation approach for valuing with a particular…

Q: stock markets protect a firms shares from liquidity? true or false

A: Stock markets are said to be amongst the foremost vital components of a free-market economy where…

Q: (a) Explain as best you can what is the Equity Premium Puzzle. (b) Explain as best you can what is…

A: Equity premium or the equity risk premium is the difference between the returns provided by the…

Q: QUESTION 40 The early unwinding of an arbitrage position will be most attractive when OA The initial…

A: We shall answer the first question since the exact question wasn't specified.Please resubmit a new…

Q: Which of the following is a suitable benefit to HCA? a. The profits of HCA are so unrealistic O b.…

A: Historical cost accounting (HCA) is the accounting method in which recording of transactions and…

Q: Because the types of cash flows that an equity holder receives are fixed and cannot be changed by…

A: False. Equity returns are not guaranteed. The types of cash flows that an equity holder receives,…

Q: True or False An all-equity financed firm will not have any financial risk

A: The capital structure of a corporation is the combination of the different sources of financing…