A company has a semi-annual coupon bond outstanding. A decrease in the market required rate of return will have an effect on this bond. Which effect is meant here:Increase of the market priceIncrease of the coupon rateDecrease of the market priceDecrease of the coupon rate A firm is comparing two different capital structure plans, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the firm would have 178,500 shares outstanding. Under Plan II, there would be 71,400 shares outstanding and €1.79 million in debt outstanding. The interest rate on the debt is 10% and there are no taxes. What is the break-even EBIT?€341,414.14€351,111.11€298,333.33€287,878.78 Consider the the dividend growth model, an increase in which of the following will increase the current value of an equity?I. Dividend amountII. Number of future dividendsIII. Discount rateIV. Dividend growth rateI, II, and III onlyI, II, and IV onlyI, II, III, and IVIII and IV only A company is considering a new project. The project will require €500,000 for new non-current assets, €200,000 for additional inventory, and €40,000 for additional trade receivables. Short-term debt is expected to increase by €150,000. What is the project's cash flow at time zero, which is the sum of investments in new non-current assets and net working capital?-€890,000-€614,000-€590,000-€500,000 A conflict of interest between the shareholders and the management of a firm is called:shareholders' liabilitycorporate activismcorporate breakdownthe agency problem Daphne invested €1000 seven...

A company has a debt-to-equity ratio of 42%, sales of €749,000, net income of €41,300, and total debt of €198,400. What is the return on equity (ROE=Net Income/Total Equity)?9.09%8.74%8.41%7.79% A project that provides annual cash flows of €9,377.18 for 12 years costs €67,150 today. At what rate would you be indifferent between accepting the project and rejecting it?9%10%11%12% Yesterday, the president of HB Enterprises received a phone call from a competitor. The competitor is a sole proprietorship. An unexpected family situation has caused the owner to suddenly want to retire and relocate closer to his family. Thus, the assets of the competitor are being offered to HB Enterprises at a bargain basement price. While HB Enterprises had not anticipated purchasing these assets, it was decided that the opportunity was too good to pass up. This illustrates which of the following needs to hold cash?TransactionSpeculativeCompensationPrecautionary If a firm effectively manages its financial risks, what can this firm do?Avoid all long-term financial risksEliminate all the risks faced by the firmReduce the price volatility it facesGuarantee the firm's financial success Which one of the following statements concerning interest rates is the most correct?The effective annual rate decreases as the number of compounding periods per year increases.The effective annual rate equals the annual percentage rate when interest is compounded annually.Borrowers would prefer monthly compounding over annual compounding.Savers would prefer annual compounding over monthly compounding. This...

The four stocks A, B, C, and D have standard deviations, respectively, of 5%, 10%, 15% and 20%. Which one is the riskiest?Stock AStock BStock CStock D According to the Pecking Order Hypothesis: less probable companies in an asymmetric world will need more ________; they will first seek ________ and will avoid ________.internal funding; the use of retained earnings; equity marketinternal funding; the use of retained earnings; debt marketexternal funding; equity funding; debt marketexternal funding; debt financing; equity market Consider the following sales:May: €50,000June: €80,000July: €120,000For any month the following percentages are received over time in cash: 40% in cash from that same month of sales, 50% in cash from the previous month's sales and 10% in cash from the sales from two months ago. What amount of cash will be received during July?€93,000€97,500€108,000€120,000 Which model shows how soon one will recover from an initial investment?Payback periodNPVIRRProfitability index Consider the following information from a balance sheet: the value of common stock is €60,000, preferred stock has a value of €10,000, retained earnings are €40,000, long-term debt is €120,000. For the purpose of estimating the WACC of the firm,what are the weights of long-term debt, preferred stock and equity? (Note: D = debt, PS= preferred stock, E = equity and V = total value).D/V = 52.17%, PS/V = 4.35% and E/V = 43.48%D/V = 52.17%, PS/V = 43.48% and E/V = 4.35%D/V = €120,000, PS/V = €10,000 and E/V = €100,000There is not enough information to answer this question....