A common stock which pays a constant dividend can be valued as if it were: a
6.Why is the cost of debt normally lower than the cost of preferred stock? a. Preferred stock dividends are tax deductions. b. Interest is tax deductible. c. dmon stock dividends are not tax deductible.
Preferred stock dividends must be paid before common stock dividends
7.An appropriate capital budgeting process requires that the following steps are taken in which order? a) collection of data b) reevaluation and adjustment c) evaluation and decision making d) search for and discovery of investment opportunities a. d, a, c, b b. d, a, b, c c. d, b, a, c d. b, d, a, c
8.Which of the following is NOT a condition under which a prudent manager would accept some risk in financing? a. Inventory is highly perishable c. Price of inventory is stable d. Easy access to capital markets
9.The purpose of secondary trading is to: a. provide liquidity and competition between investments. b. provide a market to issue securities not handled in primary trading. c. provide jobs for brokers and dealers. (περισσότερα…)