amount of debt in their capital structure. Allow me to introduce the LE-MERIDIAN FINANCING SERVICES. (Points: 3) A firm that employs financial leverage will have a higher equity multiplier than an otherwise identical firm that has no debt in its capital structure. a. The total PITI on the home he wants to buy will total $1500. Geoff’s gross monthly income is $4200. a. a.For small companies, long-term debt is the principal source of external financing. If a firm’s expected basic earning power (BEP) is constant for all of its assets and exceeds the interest rate on its debt, adding assets and financing them with debt will … Which of the following statements about inventory turnover is false? A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt. Financing permanent inventory buildup with long-term debt. Consider the below mentioned statements: 1. B. The cost of floating a debt is greater than the cost of floating an equity issue. Statement b is false; WACC is an average of debt and equity financing. Which of the following statements is CORRECT? Which of the following statements about "deep discount debt" is false? Their ratio in 2008 was better than their ratio in 2009. 6. Which of the following statements about the use of debt financing (financial leverage) is incorrect? 23. C) The statement of cash flows shows where cash came from and how cash was spent. Debt financing is the opposite of equity financing, which includes issuing stock to raise money. a. What do the asset turnover ratios measure? In general, long-term debt costs less than short-term debt. As another financing source in the capital projects fund and as another financing use in the debt service fund. True or False: Financing activities for corporations include borrowing money and selling shares of their own stock. d. Statements a and c are correct. Business Studies MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. D. The ratio in … Each of the above statements is false. Why is the amount of debt in a company's capital structure important to the … 24. 6. Debt Financing . Statement c is false; WACC is calculated on an after-tax basis. Which of the following statements is FALSE? Question 85. A) The statement of cash flows covers a span of time and is dated "Year Ended Month Day, Year". Statement d is false; the WACC is based on marginal, not embedded, costs. Cash Flow From Financing Activities: Cash flow from financing (CFF) activities is a category in a company’s cash flow statement that accounts for external activities that allow a … 23.Which of the following statements is most correct? Also explore over 13 similar quizzes in this category. Quiz 15: Debt Financing; Which of the Following Statements Is False. a) By relying on short-term debt the firm exposes itself to funding risk, which is the risk of incurring financial distress costs should the firm not be able to refinance its debt in a timely manner or at a reasonable rate. CONCEPTUAL: RETURN ON EQUITY Which of the following statements is most correct? Which of the following is TRUE of the statement of cash flows? 2) Which of the following statements is false? A. Debt financing occurs when a firm sells … Which of the following ratios would not be used to measure the extent of a firm's debt financing? Indicate whether the following statement is true or false: Debt financing means exchanging partial ownership in a firm in exchange for cash. 5. C. Boogle's quality of income ratios indicates poor performance because net income is less than cash flow. a. b.Financing short-term needs with long-term debt. Financing group Greensill Capital, which is backed by Japan’s SoftBank Group and General Atlantic of the U.S., last year provided a false statement to … c. Increasing the amount of debt in a firm’s capital structure is likely to increase the costs of both debt and equity financing. Multiple Choice . Students can solve NCERT Class 12 Business Studies Financial Management MCQs Pdf with … c) Capitalstructure theory allows managers to precisely determine the optimal … Update: All of the following fiscal policies will … D. € As another financing source in the debt service fund and as another financing use in the capital projects fund. Financing seasonal needs with short-term funds. Under MM with corporate taxes, the value of the levered firm … b) An ultra-conservative policy would involve financing even some of the plant, property, and equipment with short … C) Most U.S. government debt is owned by foreigners. A)A single municipal bond issue will often contain a number of different maturity dates.Such issues are often called multi-muni bonds because the bonds are scheduled to mature over a multiple number of years. Which of thefollowing statements about the use of debt financing (financial leverage) isincorrect? Which of the following statements is most correct? Which of the following statements concerning capital structure theory is false? A)When bond yields have increased, by exercising the call on the callable bond and then immediately refinancing, the issuer can lower its borrowing costs. Which of the following statements regarding municipal bonds is FALSE? Financing some long-term needs with short-term funds. Both warrants and convertibles are types of option securities. Free PDF Download of CBSE Business Studies Multiple Choice Questions for Class 12 with Answers Chapter 9 Financial Management. Open Hint for Question 3 in a new window. c.Financing seasonal needs with long-term funds. Bond financing is better than stock financing for investors because income from bonds is taxed on a more favorable basis than income from stock. d.Financing some long-term needs with short-term funds. The hedging approach to financing involves matching maturities of debt with specific financing needs. Which of the following statements is FALSE? If a firm’s expected basic earning power (BEP) is constant for all of its assets and exceeds the interest rate on its debt, adding assets and financing them with debt will … With liquidity debt as a source of external financing U.S. firms average firm Answers PDF Download was Prepared on. … which of the following statements is Most correct their ratio in 2008 their in! With safer cash flows shows where cash came from and how cash was.... D ) Almost half of U.S. government debt is owned by a and... Debt service fund and as another financing source in the debt service fund and as another financing in... 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