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BUS 401 Principles Of Finance Week 4 Quiz

A finance quiz assessing fundamental financial principles from Week 4.

Abigail Bennett
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BUS 401 PRINCIPLES OF FINANCEWEEK 4 QUIZ1. A plant may remain operating when sales are depressed _________ (Points :1)If the selling price per unit exceeds the variable cost per unitTo help the local economyIn an effort to cover at least some of the variable costUnless variable costs are zero when production is zero2. A corporation with very high growth prospects and many positive NPV projects to fund may want toincrease its dividend based on _______ (Points :1)The tax bias against capital gains.The residual dividend theoryThe information effectThe very low agency costs of the corporation3. Financing a portion of a firm’s assets with securities bearing a fixed rate of return in hopes ofincreasing the return to stockholders refers to ______ (Points : 1)Business riskFinancial leverageOperating leverageCombined leverage4. In perfect capital markets there ______ (Points : 1)Is no informational content assigned to a particular dividend policy.Are no income taxesAre no flotation costsAll of the above5. Low dividends may increase stock value according to the ______ (Points : 1)Bird in the hand theoryInformation effectImpact of agency costsTax bias in favor of capital gains6. A high degree of variability in a firm’s earnings before interest and taxes refers to _______ (Points : 1)Business riskFinancial riskFinancial leverage7 The market value of a leveraged firm is equal to the market value of an unleveraged firma. plus the present value of tax shields minus the present value of financial distress costs plus thepresent value of agency costs.b. minus the present value of tax shields minus the present value offinancial distress costs minus thepresent value of agency costs.c. plus the present value of tax shields minus the present value of financial distress costs minus thepresent value of agency costs.d. plus the present value of tax shields plus the present value of financial distress costs plus thepresent value of agency costs.8 All of the following may influence a firm’s dividend payment except:Investment opportunities.

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Document Details

University
Ashford University
Course
BUS 401
Subject
Finance

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