21/25 that's 84%
RETAKE
21 questions were answered correctly.
4 questions were answered incorrectly.
1
Lennon owns 50 shares of stock in Company A that are valued at
$10/share.
After Company A splits their stock at 2-for-1, what does Lennon own?
50 shares valued at $10/share
50 shares valued at $20/share
100 shares valued at $10/share
100 shares valued at $5/share
RATIONALE
At 2-for-1, the number of shares doubles from 50 shares to 100 shares, and the share
price is cut in half from $10/share to $5/share.
CONCEPT
Cash Dividend Alternatives
2
One reason a company may choose to issue additional debt instead of
equity when raising capital is that __________.
the company will be less leveraged
, debt interest payments are tax-deductible
equity increases volatility
too much equity raises the risk of bankruptcy
RATIONALE
This is one benefit of the additional leverage.
CONCEPT
Capital Structure Considerations
3
Nadia is going to receive $1,000 from her grandparents next year.
According to the time value of money, the gift of $1,000 is worth
__________ a gift of $1,000 if she received it today.
the same as
more than
twice as much as
less than
RATIONALE
It would be less than due to the time value of money.
CONCEPT
Introduction to the Time Value of Money
4
A corporation that makes shares of stock available for the public to
purchase is an example of an __________.
investment trust
RETAKE
21 questions were answered correctly.
4 questions were answered incorrectly.
1
Lennon owns 50 shares of stock in Company A that are valued at
$10/share.
After Company A splits their stock at 2-for-1, what does Lennon own?
50 shares valued at $10/share
50 shares valued at $20/share
100 shares valued at $10/share
100 shares valued at $5/share
RATIONALE
At 2-for-1, the number of shares doubles from 50 shares to 100 shares, and the share
price is cut in half from $10/share to $5/share.
CONCEPT
Cash Dividend Alternatives
2
One reason a company may choose to issue additional debt instead of
equity when raising capital is that __________.
the company will be less leveraged
, debt interest payments are tax-deductible
equity increases volatility
too much equity raises the risk of bankruptcy
RATIONALE
This is one benefit of the additional leverage.
CONCEPT
Capital Structure Considerations
3
Nadia is going to receive $1,000 from her grandparents next year.
According to the time value of money, the gift of $1,000 is worth
__________ a gift of $1,000 if she received it today.
the same as
more than
twice as much as
less than
RATIONALE
It would be less than due to the time value of money.
CONCEPT
Introduction to the Time Value of Money
4
A corporation that makes shares of stock available for the public to
purchase is an example of an __________.
investment trust
