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Under what conditions is it most likely that a corporation will issue new stock as a form of finance?
Option B. when the interest rate is rising
Explanation: When the interest rate is rising, debt finance would be costlier and the firm would like to go to equity financing.
Under what conditions is it most likely that a corporation will issue new stock as a...
Which of the following statements is most correct? A The interest rate on a new issue of callable bonds is likely to exceed that on a similar new issue of noncallable bonds. B The interest rate on a new issue of noncallable bonds is likely to exceed that on a similar new issue of callable bonds. C Noncallable bonds are riskier to the investor while callable bonds are riskier to the issuer. D There is no difference in risk to...
ABC Corporation will issue new common stock to finance an expansion. The existing common stock just paid a $1.75 dividend, and dividends are expected to grow at a constant rate of 6% indefinitely. The stock sells for $52, and flotation expenses of 5% of the selling price will be incurred on new shares. What is the cost of new common stock? vyu:
what is r n (new common stock issue)? what is r p (new preferred stock issue)? what is r d (before tax rate on bonds)? what is r i (after tax rate on bonds)? what is r r (retained earnings)? Company XYZ will pay in exactly one year $4 in dividends per share to its common stock shareholders. In exactly one year it will pay $2 in dividends per share to holders of its preferred stock. The flotation costs on...
what is r n (new common stock issue)? what is r p (new preferred stock issue)? what is r d (before tax rate on bonds)? what is r i (after tax rate on bonds)? -what is r r (retained earnings)? Company XYZ will pay in exactly one year $4 in dividends per share to its common stock shareholders. In exactly one year it will pay $2 in dividends per share to holders of its preferred stock. The flotation costs on...
9:08 LTE Question 22 of 23 Submit Under what conditions are gases most likely to behave ideally? A) High pressures B) Low temperatures C) Polar molecules D) Low pressures E) Large molecules Tap here or pull up for additional resources
39. Tigner corporation is planning a bond issue to finance a new project. Tigner plans to issue 2000 bonds with a face value of $1000 each and a coupon rate of 9%. The tax rate is 40%. Projected EPS after completion of the project is $5.46. What are the projected after-tax earnings after completion of the project if there are 200,000 shares outstanding: $1,092,000 $1,100,000 $1,110,000 None of the above 40. Sturgis corporation is planning an equity issue to finance...
An expansionary gap is most likely to occur when which of these conditions is true? Select one: a. Real GDP is below potential GDP O b. The economy is experiencing a severe recession C. There is a deflation (a fall in prices) in the economy d. The unemployment rate is relatively low e. The economy is not generating any jobs
Question 1 0.2 pts Which of the following conditions will most likely coincide with the existence of a liquidity trap? Individuals prefer to hold only money and not bonds. O The real interest rate is negative. Inflation is rising. Inflation is constant. OInflation is zero.
The common stock for the Bestsold Corporation sells for $62. If a new issue is sold, the flotation costs are estimated to be 9 percent. The company pays 60 percent of its earnings in dividends, and a $3.60 dividend was recently paid. Earnings per share 5 years ago were $4.00. Earnings are expected to continue to grow at the same annual rate in the future as during the past 5 years. The firm's marginal tax rate is 32 percent. Calculate...
Which one of these events is MOST likely to raise interest rates in the economy? Select one: a. The Fed buying government bonds through an Open Market Operation b. Prices in the economy falling during an economic depression c. The Fed lowering the Federal Funds Rate d. The Fed raising the Required Reserves Ratio e. National income falling during a recession