Try this amazing This Is A Quiz About Chapter 18 In Bus 438 quiz which has been attempted 649 times by avid quiz takers. b. c) Capitalstructure theory allows managers to precisely determine the optimal … Allow me to introduce the LE-MERIDIAN FINANCING SERVICES. As another financing source in the capital projects fund and as another financing use in the debt service fund. He is already paying $1000 in other long-term debt obligations. a. If a firm’s expected basic earning power (BEP) is constant for all of its assets and exceeds the interest rate on its debt, adding assets and financing them with debt will … Each of the above statements is false. b) Inall situations, the use of debt financing increases the riskiness to owners. B) Debt as a fraction of firm value has varied in a range from 30-45% for the average firm. A. Which of the following statements regarding municipal bonds is FALSE? Which of the following statements about inventory turnover is false? The cost of floating a debt is greater than the cost of floating an equity issue. 15) Which of the following statements is false? A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt. Which of the following ratios would not be used to measure the extent of a firm's debt financing? In order to find out cost of equity capital under CAPM, which of the following is not required: (a) Beta Factor, (b) Market Rate of Return, (c) Market Price of Equity Share,(d) Risk-free Rate of Interest. Although short‑term interest rates have historically averaged less than long‑term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks of using short‑term financing. 47. Geoff want to buy a home with a conventional mortgage. d.Financing some long-term needs with short-term funds. In working capital management we find that profitability varies inversely with liquidity. Which of the following items would cause the cash conversion cycle to decrease? End of Question 2 Question 3. True or False: Although the use of financial leverage (debt financing) can increase the return to the owners of a business, it also increases the riskiness of their equity investment. Free PDF Download of CBSE Business Studies Multiple Choice Questions for Class 12 with Answers Chapter 9 Financial Management. Their ratio in 2008 was better than their ratio in 2009. C.€As another financing source in the government-wide Statement of Activities. D. The ratio in … D) Almost half of U.S. government debt is internal to the government. The total PITI on the home he wants to buy will total $1500. False. Consider the below mentioned statements: 1. Quiz 15: Debt Financing; Which of the Following Statements Is False. a. Statement b is false; WACC is an average of debt and equity financing. Debt financing occurs when a firm sells … A)When bond yields have increased, by exercising the call on the callable bond and then immediately refinancing, the issuer can lower its borrowing costs. Under MM with corporate taxes, the value of the levered firm … Which of the following statements is CORRECT? Cash Flow From Financing Activities: Cash flow from financing (CFF) activities is a category in a company’s cash flow statement that accounts for external activities that allow a … C) Most U.S. government debt is owned by foreigners. C) Capital expenditures greatly exceed firms’ external financing, implying that most investment and growth is supported by … B) The statement of cash flows reports why cash increased or decreased during the period. False True or False: The purchase of equipment is an example of a financing activity. Which of the following is TRUE of the statement of cash flows? 6. (Hint: Work Problem 4-16 before answering 4-17, and consider the solution setup for 4-16 as you think about 4-17.)a. Indicate whether the following statement is true or false: Debt financing means exchanging partial ownership in a firm in exchange for cash. Debt Financing is a cheaper source of finance because of: (a) Time Value of Money,(b) Rate of Interest,(c) Tax-deductibility of Interest,(d) Dividends not Payable to lenders. c. The coupon rate on convertible debt is lower than the coupon rate on similar straight debt … If you don't see any interesting for you, use our search form on bottom ↓ . If you decide that you do not want to take on investors and want total control of the business yourself, you may want to pursue debt financing in order to start up your business. Which of the following statements about warrants and convertibles is false? Which of the following statements concerning capital structure theory is false? they provide financing solutions to companies and individuals seeking … Which of the following statements is true? On this page you can read or download which of the following statements about equity financing is false everfi investing basics in PDF format. Debt financing is the opposite of equity financing, which includes issuing stock to raise money. CONCEPTUAL: RETURN ON EQUITY Which of the following statements is most correct? In 2008 their ratio was 2.2 and in 2009 it was 1.5. Geoff’s gross monthly income is $4200. Financing group Greensill Capital, which is backed by Japan’s SoftBank Group and General Atlantic of the U.S., last year provided a false statement to … (Points: 3) A firm that employs financial leverage will have a higher equity multiplier than an otherwise identical firm that has no debt in its capital structure. b. A cash management system which minimizes … Debt Financing . b.Financing short-term needs with long-term debt. 7. a.Financing short-term needs with short-term funds. 1. a) By relying on short-term debt the firm exposes itself to funding risk, which is the risk of incurring financial distress costs should the firm not be able to refinance its debt in a timely manner or at a reasonable rate. C. Boogle's quality of income ratios indicates poor performance because net income is less than cash flow. 7) Browning Cookware, Inc. has the following income statement items: sales of $50,250,000; operating expenses of $10,115,000; cost of goods sold of $35,025,000; and interest expense of $750,000. Which of thefollowing statements about the use of debt financing (financial leverage) isincorrect? Update: All of the following fiscal policies will … 2. Statement d is false; the WACC is based on marginal, not embedded, costs. A) The statement of cash flows covers a span of time and is dated "Year Ended Month Day, Year". CONCEPTUAL: RETURN ON EQUITY Which of the following statements is most correct? False True or False: Assets are resources owned by a business and … A)A single municipal bond issue will often contain a number of different maturity dates.Such issues are often called multi-muni bonds because the bonds are scheduled to mature over a multiple number of years. a. d. Statements a and c are correct. 24. € 12. the loan company that grant me loan of 5,000,000.00 USD When other loan investors has neglect my offer but Le_Meridian Funding Service grant me success loan.they are into directly in loan financing and project in terms of investment. Also explore over 13 similar quizzes in this category. 23.Which of the following statements is most correct? Generally, a … C) The statement of cash flows shows where cash came from and how cash was spent. Financing seasonal needs with short-term funds. e. Statements b and c are correct. Which of the following statements is FALSE? Geoff doesn’t qualify for a conventional loan because his TOR is above 36% 6. Answer: _____ 48. Financing short-term needs with short-term funds. Which of the following is false about their quality of income ratios? True True or False: Investing activities involve collecting the necessary funds to support the business. Since debt financing is cheaper and is adjusted downward for taxes, it should, when averaged with equity, cause the WACC to be less than the cost of equity financing. A) The data show a clear preference for equity as a source of external financing for the total population of U.S. firms. A UCC-1 financing statement (an abbreviation for Uniform Commercial Code-1) is a legal form that a creditor files to give notice that it has or may have an interest in the personal property of a debtor (a person who owes a debt to the creditor as typically specified in the agreement creating the debt). Which of the following statements is FALSE? Which of the following statements is false? If a firm’s expected basic earning power (BEP) is constant for all of its assets and exceeds the interest rate on its debt, adding assets and financing them with debt will … a) Inmost situations, the use of debt financing increases the return to owners (say,as measured by ROE). a. A) For capital budgeting purposes, the project’s financing is the incremental financing that results if the firm takes on the project. What do the asset turnover ratios measure? 23. D. € As another financing source in the debt service fund and as another financing use in the capital projects fund. Which of the following statements about "deep discount debt" is false? 8. B) Government can create money to finance its debt. a. B)Revenue bonds are where the local government pledges specific revenues generated by … a.For small companies, long-term debt is the principal source of external financing. Open Hint for Question 3 in a new window. In general, long-term debt costs less than short-term debt. 2) Which of the following statements is false? Bond financing is better than stock financing for investors because income from bonds is taxed on a more favorable basis than income from stock. True or False: Financing activities for corporations include borrowing money and selling shares of their own stock. B)To understand how call provisions affect the price of a bond, we first need … D. Cash paid for interest on debt would be classified as a financing cash flow. b) An ultra-conservative policy would involve financing even some of the plant, property, and equipment with short … One primary difference between warrants and convertibles is that warrants bring in additional funds when exercised, while convertibles do not. Business Studies MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. All other things equal, reducing a firm's current assets will decrease profitability as measured by ROI. The issuance of deep discount debt requires approval by referendum b. in comparison to serial bond issues, deep discount debt is usually issued in relatively small amounts c. deep discount debt require little or no interest payments during its outstanding term Financing permanent inventory buildup with long-term debt. a. Which of the following would be consistent with a conservative approach to financing working capital? c. Increasing the amount of debt in a firm’s capital structure is likely to increase the costs of both debt and equity financing. B. B) Projects with safer cash flows can support more debt before they increase the risk of financial distress for the firm. A) Even after adjusting for personal taxes, the value of an unlevered firm exceeds the value of a levered firm, and there is a tax advantage to using debt financing. c.Financing seasonal needs with long-term funds. Statement c is false; WACC is calculated on an after-tax basis. Tax … Why is the amount of debt in a company's capital structure important to the … Which of the following statements is most correct? A) Government has the power to tax to finance its debt. 5. Question 85. Which of the following statements about the use of debt financing (financial leverage) is incorrect? Both warrants and convertibles are types of option securities. (Hint: Work Problem 4-16 before answering 4-17, and consider the solution setup for 4-16 as you think about 4-17.) If the firm's income tax rate is 34%, what is the amount of the firm's income tax liability? Which of the following statements about government debt is false? The hedging approach to financing involves matching maturities of debt with specific financing needs. amount of debt in their capital structure. True b. Students can solve NCERT Class 12 Business Studies Financial Management MCQs Pdf with … Multiple Choice . 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