Which of the following statements correctly translates into funding? Group of answer choices Funding is impossible if a company has sufficient assets to hold a short-term security Funding can be derived from the overall debt and shareholdings of a specific corporation Funding is the realization of all assets into cash to be paid for all the liabilities withheld

Which of the following statements correctly translates into funding? Group of answer choices Funding is impossible if a company has sufficient assets to hold a short-term security Funding can be derived from the overall debt and shareholdings of a specific corporation Funding is the realization of all assets into cash to be paid for all the liabilities withheld

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 6Q: Suppose a firm makes the following policy changes listed. If a change means that external,...

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The idea of determining the WACC is to identify the relevant cost of utilizing funds provided by different sources. TRUE OR FALSE. Flotation costs can be represented by the amount of costs a company pays to raise capital through authorizing sale of company ownership. TRUE OR FALSE Issuing new preferred shares should be the firm's last resort of raising new funds. TRUE OR FALSE
Discuss the factors that are likely to influence the desired level of cash of a companyb. Outline the advantages and disadvantages of using short term debt, as opposed to longterm debt, in the financing of working capital c. Why cash flows rather than profits are most desirable in financial management? d. Explain the term “agency relationships” and discuss the conflicts that might exist in therelationship between’i) Shareholder and managersii) Shareholders and creditorsWhat steps may be taken to overcome these conflicts?
If managers of a company have inside information about the company’s future performances and such inside information is unknown to outsiders, then the company’s managers are most likely to use _____ to finance its project investment Group of answer choices a. the company’s retained earnings b. debt borrowing from banks c. share issuance to new investors d. there is no difference among the above three funding options
Which of the following statement is correct Select one: A . The capital structure of a company may comprise of Equity Share Capital, Preference Share Capital and Debentutes B . Capital structure is a method of analyzing and comparing substantial future investments and expenditures to determine which ones are most worthwhile C . working capital referring to the mix of different sources of long - term funds D .Capital expenditure decisions do not involve commitment of large sums of money E .None of the statement is correct
Which of the following statements is true with regard to cash flows resulting from financing costs? a. They should be included in the cash flow calculations. b. Financing cash flows cannot include dividend payments to stockholders and interest payments to bondholders. c. Financing costs are captured in the original investment of a project’s cash flows. d. If cash outflows associated with financing costs were deducted from the cash flows for a project, it would be double-counting the financing costs of the investment.
Discuss the factors that are likely to influence the desired level of cash of a company Outline the advantages and disadvantages of using short term debt, as opposed to long term debt, in the financing of working capital Why cash flows rather than profits are most desirable in financial management? Explain the term “agency relationships” and discuss the conflicts that might exist in therelationship between’i) Shareholder and managersii) Shareholders and creditors
The negative working capital occurs when the اخترأحد الخيارات a. None of the options b. Current equity exceed current assets c. Current assets exceed current equity d. Current liabilities exceed current assets e. Current assets exceed current liabilities Which of the following statement is correct? اخترأحد الخيارات a. Capital structure of a company may comprise of Equity Share Capital, Preference Share Capital and Debentures b. Working capital refers to the mix of different sources of long-term funds c. None of the statement is correct d. Capital expenditure decisions do not involve commitment of large sums of money e. Capital structure is a method of analyzing and comparing substantial future investments and expenditures to determine
Which two situations would tend to cause a company to have more debt in its capital structure?a) Tangible assets to serve as collateralb) Most expenses are for employee compensationc) High levels of unearned revenued) Most expenses are for research and developmente) Stable operating cash flows
For firms that have debt on their balance sheets, interest expense is commonly seen as an expense on the firm's income statement. In capital budgeting, however, we ignore interest expense. Why? Group of answer choices A) Because the cost of debt is already included in the WACC, and including interest expense in the calculation of cash flows would then be "double counting" it. B) Capital budgeting is done from the perspective of the common stockholders, so it ignores interest expense (Wrong Choice) C) Like depreciation, interest expense is a "non-cash" expense D) Because firms ignore the pleas of banks and bondholders to pay their interest. This is why Silicon Valley Bank failed.
For firms that have debt on their balance sheets, interest expense is commonly seen as an expense on the firm's income statement. In capital budgeting, however, we ignore interest expense. Why? Group of answer choices A) Because the cost of debt is already included in the WACC, and including interest expense in the calculation of cash flows would then be "double counting" it. B) Capital budgeting is done from the perspective of the common stockholders, so it ignores interest expense C) Like depreciation, interest expense is a "non-cash" expense D) Because firms ignore the pleas of banks and bondholders to pay their interest. This is why Silicon Valley Bank failed.
The entity has several high-cost.non-profitgenerating assets. It also has:avcost of debt and equity significantly higher than the industry average. In creating and executing a financial policy, the financial manager may do the following EXCEPT: a. Suggest a cost-benefit analysis using capital budgeting techniques on the non-profit-generating assets.b. Request for a more conservative investing and financing policy.c. Determine the cause of the high cost of financing.d. Determine whether these non-profit-generating assets be sold and be used to purchase other non-operating assets that can provide a return higher than the cost to finance these.
Which of the following statements is incorrect? Cash fund that is being held specifically for the retirement of long-term debts not maturing currently should be excluded form current assets and shown as a noncurrent investment Cash and cash equivalents is always presented as the first line item in the statement of financial position Investments that can be liquidated at once and with little risk of loss of principal may be classified as cash equivalent and included in the caption "Cash and Cash equivalents" Cash that is restricted and not available for use within one year from the end of reporting period should be included in noncurrent assets