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1) A decrease in the debt ratio will generally have no effect on___________ .a. Financial risk.b. Total risk.c. Business risk.d. Market risk.e. None of the above is correct.2) Texas Products Inc. has a division that makes burlap bags for the citrus industry. The division has fixed costs of $10000 per month and it expects to sell 42000 bags per month. If the variable cost per bag is $2.00 what price must the division charge in order to break evena. $2.24b. $2.47c. $2.82d. $3.15e. $2.003) Simon Utility expects to have net income of $5 billion this year. The company has an estimated capital budget of $4 billion and its capital structure consists of 65 percent common equity and 35 percent debt. If the company follows a strict residual dividend policy what is the company s expected dividend payout ratioa. 0.00%b. 35.00%c. 48.00%d. 65.00%e. 100.00% 4) McKenna Motors is expected to pay a $1.00 per-share dividend at the end of the year (D1 = $1.00). The stock sells for $20 per share and its required rate of return is 11 percent. The dividend is expected to grow at a constant rate g forever. What is the growth rate g for this stocka. 5%b. 6%c. 7%d. 8%e. 9%

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