an example of "low risk -- low (potential) profitability" asset financing. d) Market Share 2.22..2. Which of the following is not one of the three fundamental methods of firm valuation? Question: T-16 Multiple Choice 16. the book value of the firm. In calculating the proportional amount of equity financing employed by a firm, we should use: the common stock equity account on the firm's balance sheet. c) Balance sheet - where the firm is valued in terms of its assets. What is the value of the firm according to MM with corporate taxes? Because a firm tends to profit most when the market estimation of an organization’s share expands and this is not only a sign of development for the firm but also it boosts investor’s wealth. leasing is a renewable source of intermediate-term funds. 3. The largest source of long-term financing for U.S. firms for the last 40 years has been: a. Reinvestment of profits, b. D. Chapter 12—A Firm's Sources of Financing MULTIPLE CHOICE 1. Finance Basics MCQs systematically covers fundamental part of business finance, financial management and corporate finance... Visit the post for more. MCQ of Corporate Finance 1.11..1. A way to analyze whether debt or lease financing would be preferable is to: Investment A offers an expected rate of return of 16%, B of 8%, and C of 12%. Which one of the following terms is defined as the management of a firm's long-term investments? Which one of the following is a source of cash for a tax-exempt firm? A stakeholder is: A. includes accounts payable. Multiple Cholce Increase In accounts recelvable Increase In depreclation Decrease In accounts payable Increase In common stock Increase In Inventory Any person or entity that has voting rights based on stock ownership of a corporation. Kimberly uses $500,000 of 12.0 percent debt financing, and the cost of equity to an unlevered firm in the same risk class is 16.0 percent. Introduction to Corporate Finance. On The Firm’s Balance Sheet, Long-term Debt Went From $1 Million At The End Of 2008 To $2 Million At The End Of 2009. The firm's cost of capital is 6% if it borrows $10 million, 10% if it borrows $20 million, and 15% if it borrows $30 million. is the amount of current assets required to meet a firm's long-term minimum needs. a) Discounted Cash flow b) Income or earnings - where the firm is valued on some multiple of accounting income or earnings. 34. B. companies, financial institutions, and individuals derive different benefits from owning assets. Financing Decision. ... C. $1 million source of cash in financing activities D. $1 million use of cash in financing activities E. $1 million use of cash in operating activities. the current market price per share of common stock times the number of shares outstanding. Borrowing from banks, c. Long-term bonds, d. an example of "moderate risk -- moderate (potential) profitability" asset financing. Compared to firms that provide a good lifestyle for the owner but little in the way of attractive returns, a firm with potential for high growth and large profits has _____ possible sources of financing. C. A person who initially started a firm and currently has management control over the cash flows of the firm due to his/her current ownership of company stock. 4. this is a type of financing unaffected by changes in tax law. A firm is considering three investment projects which we will refer to as A, B, and C. Each project has an initial cost of $10 million. a. Any person or entity that owns shares of stock of a corporation. the sum of common stock and preferred stock on the balance sheet. Multiple Choice Questions. A. working capital management B. financial allocation C. agency cost analysis D. capital budgeting E. capital structure Financial decision is important to make wise decisions about when, where and how should a business acquire fund. 9. 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