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Grade Details

1.

Question :

Operating leverage refers to ________

Student Answer:

Financing a portion of the firm’s assets with securities bearing a fixed rte of return The additional chance or insolvency borne by the common shareholder. The incurrence of fixed operating costs in the firm’s income stream A high degree of variable costs of production

Points Received:

1 of 1

Comments:

2.

Question :

A firm that uses large amounts of debt financing in an industry characterized by a high degree of business risk would have ______ earnings per share fluctuations resulting from changes in levels of sales.

Student Answer:

No Constant Large D Small

Points Received:

1 of 1

Comments:

3.

Question :

JB Corporation has a retained earnings balance of $1,000,000. The company reported net income of $200,000, sales of $2,000,000, and had 100,000 shares of common stock outstanding. The company announced a dividend of $ 1 per share. Therefore, the company’s dividend payout ratio is _________.

Student Answer:

10% 20% 50% 100%

Points Received:

1 of 1

Comments:

4.

Question :

Assume Harris, Inc. Has 10,000,000 common shares outstanding that have a par value of $2 per share. The stock is currently trading for $30 per share. The firm reported a net profit after-tax of $25,000,000. All else equal, what will happen to earnings per share if the company issues a 10 % stock dividend? Student Answer:


Points Received:

1 of 1

Comments:

5.

Question :

All of the following are likely to result in the use of less debt in a company’s capital structure expect: Student Answer:

Points Received:

1 of 1

Comments:

6.

Question :

Which of the following statements would be consistent with the Dividend Irrelevance Theory? Student Answer:

Points Received:

1 of 1

Comments:

7.

Question :

The break even point in sales dollars is convenient if ______ Student Answer:

Points Received:

1 of 1

Comments:

8.

Question :

In perfect capital markets there ______ Student Answer:


Points Received:

1 of 1

Comments:

9.

Question :

Financial leverage could mean financing some of a firm’s assets with _______ Student Answer:

Points Received:

1 of 1

Comments:

10.

Question :

Dividend policy is influenced by _______ Student Answer:

Points Received:

1 of 1

Comments:

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