Finc600 Week 8 Practice Quiz

FINC600 Week 8 Practice Quiz
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Corporate Finance
Week 8 Practice Quiz

Question 1 of 25 4.0/ 4.0 Points
Indirect costs of bankruptcy are borne principally by:

 
A.Bondholders  
B.Stockholders  
C.Managers  
D.The federal government
Question 2 of 25 4.0/ 4.0 Points
Which of the following lists events in the chronological order from earliest to latest?

 
A.Record date, declaration date, ex-dividend date  
B.Declaration date, record date, ex-dividend date  
C.Declaration date, ex-dividend date, record date  
D.None of the above
 
Question 3 of 25 4.0/ 4.0 Points
Dividends are decided by:
I) The managers of a firm
II) The government
III) The board of directors

 
A.I only  
B.II only  
C.III only  
D.I and II only
 
Question 4 of 25 3.5/ 4.0 Points
Discuss some examples of the conflicts of interest that may arise between bondholders and stockholders when a firm is in financial distress.
 
 
 

Question 5 of 25 4.0/ 4.0 Points
The main advantage of debt financing for a firm is:
I) no SEC registration is required for bond issue
II) interest expense of a firm is tax deductible
III) unlevered firms have higher value than levered firms

 
A.I only  
Question 6 of 25 4.0/ 4.0 Points
Capital structure of the firm can be defined as:
I) the firm's debt-equity ratio
II) the firm's mix of different securities used to finance assets
III) the market imperfection that the firm's manager can exploit

 

Question 7 of 25 4.0/ 4.0 Points
If the capital markets are efficient, then the sale or purchase of any security at the prevailing market price is:

 
A.Always a positive NPV transaction  
B.Generally a zero NPV transaction  
C.Is always a negative NPV transaction  
D.None of the above
 
Question 8 of 25 0.0/...