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William owns 100 shares of Textron convertible preferred stock.To what can this preferred stock be converted in most companies?


A) A different type of preferred stock
B) Ordinary share
C) Corporate bonds
D) Trade credit
E) Retained earnings

F) C) and D)
G) A) and B)

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The date on the face of a bond telling when the face value is to be repaid is called the


A) date of issuance.
B) maturity date.
C) dividend declaration date.
D) discount rate.
E) date of record.

F) B) and E)
G) A) and C)

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Which of the following companies would most likely be able to issue commercial paper?


A) Mike's Pizza Place
B) A local housing construction company
C) General Electric
D) A medium-sized advertising agency
E) United Way

F) B) and C)
G) All of the above

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Casey Broadway's responsibility at his company is overseeing all the activities concerned with obtaining money and using it effectively.Casey is a(n)


A) accountant.
B) financial manager.
C) financial planner.
D) investment advisor.
E) loan officer.

F) A) and D)
G) C) and D)

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The interest rate and repayment terms for term loans often are based on such factors as the reasons for borrowing, the borrowing firm's credit rating, and the value of collateral.

A) True
B) False

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Short-term financing not backed by collateral is called


A) debt capital.
B) unsecured financing.
C) mortgage bonds.
D) trade credit.
E) unprotected financing.

F) A) and B)
G) C) and D)

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Long-term financing should be used to do which of the following?


A) Pay for speculative production
B) Purchase inventory for resale
C) Pay salaries
D) Pay utilities
E) Develop new products

F) A) and D)
G) B) and E)

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Morgan's Transition Morgan is currently a manager of a small financial planning firm.He is seeking a new career with a large corporation in the banking industry.He recently applied for the financial manager opening at G & T Bank.He is concerned that the transition from his small firm to a large corporation will be difficult.To better prepare himself for this change, he has decided to enroll in a few business classes to strengthen his understanding of corporate finance.The business classes have proven to be a valuable tool for learning the critical skills needed to fully understand a financial plan, equity financing, and debt financing.Morgan now believes he has strengthened his competitive advantage in his quest for the job. -Refer to Morgan's Transition.During his job interview, Morgan was asked to talk about money received from the owners or from the sale of shares of ownership in a business.Which of the following would best describe these funds?


A) Debt capital
B) Equity capital
C) Proceeds from a merger or acquisition
D) Proceeds from the sale of assets
E) Sales revenue

F) A) and B)
G) None of the above

Correct Answer

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The greatest part of a firm's financing is provided by


A) debt equity.
B) sale of assets.
C) government grants.
D) sales revenue.
E) equity capital.

F) A) and B)
G) B) and E)

Correct Answer

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Which of the following generally has no specific repayment period?


A) An unsecured bank loan
B) Factoring
C) A secured loan
D) A promissory note
E) Trade credit

F) C) and D)
G) A) and B)

Correct Answer

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