Business Finance 4

As debt is added to the capital structure, the:

Cost of debt can be expected to rise

1 of 7

Why should managers assume they will receive a fair price for any new shares?

Financial markets are highly competitive

2 of 7

If a company's cost of capital is less than the required return on equity, then the firm:

Has debt in its capital structure

3 of 7

Capital budgeting projects typically assume that all cash flows transpire at the end of the year, reason:

It makes forecasting easier for the analyst

4 of 7

Convertible bonds are a combination of:

Bonds and warrants

5 of 7

When the real rate of interest is less than the nominal rate of interest, then:

The rate of inflation must be positive

6 of 7

One common reason for issuing two distinct classes of common stock is to:

Restrict voting privileges from some shareholders

7 of 7

Other cards in this set

Why should managers assume they will receive a fair price for any new shares?

Financial markets are highly competitive

If a company's cost of capital is less than the required return on equity, then the firm:

Capital budgeting projects typically assume that all cash flows transpire at the end of the year, reason:

Convertible bonds are a combination of:

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