Which one of the following actions will provide you with the right, but not the obligation, to buy the underlying asset at a specified price during a specified period of time?
- purchase of a put option
- sale of a put option
- purchase of a call option
- sale of a call option
Agency costs refer to:
- the total interest paid to creditors over the lifetime of the firm.
- the costs that result from default and bankruptcy of a firm.
- corporate income subject to double taxation.
- the costs of any conflicts of interest between shareholders and management.
- decreases whenever new shares of equity are issued.
- includes long-term debt, preferred stock, and ordinary equity.
- represents the residual value of a firm.
- is equal to total assets plus total liabilities.
Which one of the following statements is the most correct?
- Interest expense increases the amount of tax due.
- Taxes reduce both net income and operating cash flow.
- Interest expense is included in operating cash flow.
- Depreciation does not affect taxes since it is a non-cash expense.
Interest rates that include an inflation premium are referred to as:
- effective annual rates.
- real rates.
- nominal rates.
- fisher rates.
The optimal capital structure is the one that balances
- return and risk factors in order to maximize dividends.
- return and risk factors in order to maximize profits.
- return and risk factors in order to maximize earnings per share.
- return and risk factors in order to maximize market value.
Which one of following is the rate indicating that a stock's price is expected to appreciate?
- capital gains yield
- current yield
- total return
- dividend yield
Which one of the following is a net working capital management decision?
- determining the amount of equipment needed to complete a job.
- determining the amount of long-term debt required to complete a project.
- determining the number of shares of stock to issue to fund an acquisition.
- determining ... Interested? Read the instructions below in order to read the full content of this page.
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Six international business exams (last years) for the course Finance and risk management at University of Groningen
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