c) Balance sheet - where the firm is valued in terms of its assets. 34. Kimberly uses $500,000 of 12.0 percent debt financing, and the cost of equity to an unlevered firm in the same risk class is 16.0 percent. In calculating the proportional amount of equity financing employed by a firm, we should use: the common stock equity account on the firm's balance sheet. A stakeholder is: A. d) Market Share 2.22..2. Multiple Choice Questions. Any person or entity that has voting rights based on stock ownership of a corporation. the sum of common stock and preferred stock on the balance sheet. Multiple Cholce Increase In accounts recelvable Increase In depreclation Decrease In accounts payable Increase In common stock Increase In Inventory a. The largest source of long-term financing for U.S. firms for the last 40 years has been: a. Reinvestment of profits, b. the current market price per share of common stock times the number of shares outstanding. A way to analyze whether debt or lease financing would be preferable is to: companies, financial institutions, and individuals derive different benefits from owning assets. Compared to firms that provide a good lifestyle for the owner but little in the way of attractive returns, a firm with potential for high growth and large profits has _____ possible sources of financing. ... C. $1 million source of cash in financing activities D. $1 million use of cash in financing activities E. $1 million use of cash in operating activities. leasing is a renewable source of intermediate-term funds. Which one of the following terms is defined as the management of a firm's long-term investments? On The Firm’s Balance Sheet, Long-term Debt Went From $1 Million At The End Of 2008 To $2 Million At The End Of 2009. Investment A offers an expected rate of return of 16%, B of 8%, and C of 12%. A. working capital management B. financial allocation C. agency cost analysis D. capital budgeting E. capital structure Because a firm tends to profit most when the market estimation of an organization’s share expands and this is not only a sign of development for the firm but also it boosts investor’s wealth. 9. Financing a long-lived asset with short-term financing would be. MCQ of Corporate Finance 1.11..1. Borrowing from banks, c. Long-term bonds, d. a) Discounted Cash flow b) Income or earnings - where the firm is valued on some multiple of accounting income or earnings. is the amount of current assets required to meet a firm's long-term minimum needs. an example of "moderate risk -- moderate (potential) profitability" asset financing. C. A person who initially started a firm and currently has management control over the cash flows of the firm due to his/her current ownership of company stock. Which of the following is not one of the three fundamental methods of firm valuation? Any person or entity that owns shares of stock of a corporation. D. Finance Basics MCQs systematically covers fundamental part of business finance, financial management and corporate finance... Visit the post for more. Chapter 12—A Firm's Sources of Financing MULTIPLE CHOICE 1. an example of "low risk -- low (potential) profitability" asset financing. Which one of the following is a source of cash for a tax-exempt firm? this is a type of financing unaffected by changes in tax law. 3. Financing Decision. 4. the book value of the firm. includes accounts payable. What is the value of the firm according to MM with corporate taxes? A firm is considering three investment projects which we will refer to as A, B, and C. Each project has an initial cost of $10 million. The firm's cost of capital is 6% if it borrows $10 million, 10% if it borrows $20 million, and 15% if it borrows $30 million. Question: T-16 Multiple Choice 16. 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