Advantage of incorporation

Assignment Help Financial Management
Reference no: EM131585636

1. Which of the following is/are an advantage of incorporation?

A) Acccess to capital markets

B) Limited liability

C) Unlimited life

D) All of the above

2. Which of the following statements is FALSE?

A. Creditors often place restrictions on the actions that the firm can take. Such restrictions are referred to as debt covenants.

B. Covenants are often designed to prevent management from exploiting debt holders, so they may help to reduce agency costs.

C. Agency costs are smallest for long-term debt.

D. Covenants may limit the firm's ability to pay large dividends or the types of investments that the firm can make.

Reference no: EM131585636

Questions Cloud

Find the risk for portfolio : If a portfolio has 60% of funds invested in stock 1 and 40% of funds invested in stock 2, find the risk sV for this portfolio.
What is the firm debt ratio : What is the firm's debt ratio?
Discuss the role of business ethics in valuing the firm : Discuss the role of business ethics in valuing the firm. Should ethics matter in the firm’s valuation? Why or why not?
What return they would be making on their investment : what return they would be making on their investment of $15, 676.54. The annual rate of return your folks would be earning on their investment is %.
Advantage of incorporation : Which of the following is/are an advantage of incorporation?
Difference between each element and the max : Find the maximum number out of 5 array elements and calculate the difference between each element and the max
Find a graph with seven vertices : Prove that if G has 11 vertices and is simple, then G and G¯ cannot both be planar.
An agency problem can be alleviated by : An agency problem can be alleviated by?
Identify a diversity situation or cultural dilemma : Identify a diversity situation or cultural dilemma that is prevalent in today's society that involves more than one cultural group.

Reviews

Write a Review

Financial Management Questions & Answers

  Face value bond at par that pays interest annually

You buy a $1,000 face value bond at par that pays interest annually. It yields 10% per annum. As is the usual case, the bond’s issuer waits until just when it is due to pay interest and files for bankruptcy. What is your total dollar return? What is ..

  Dividend payment process and open-market repurchase process

What are the dividend payment process and the open-market repurchase process? In your answer, be sure to explain the effects they have in a perfect world.

  What is Krystals annual percentage return and EAR

Krystal Magee invested $150,000 17 months ago. Currently the investment is worth $170,000. Krystal knows that the investment paid interest monthly, but she does not know what yield on her investment. What is Krystal's annual percentage return (APR) a..

  Failure to adequately regulate mortgage brokers

Is it true that there was a failure to regulate the subprime market? Failure to adequately regulate mortgage brokers?

  Company depreciation and amortization expense

Trevi Corporation recently reported an EBITDA of $32,800 and $9,500 of net income. The company has $6,800 interest expense, and the corporate tax rate is 35 percent. What was the company’s depreciation and amortization expense?

  Negotiating with your prospective new employer

Fresh out of college, you are negotiating with your prospective new employer. If you can earn 8% on your invested funds,

  Does your equal payment period match compounding period

Does your equal payment period match the compounding period?

  Considering investing in two alternative production systems

Blanda Incorporated management is considering investing in two alternative production systems. The systems are mutually exclusive, and the cost of the new equipment and the resulting cash flows are shown in the accompanying table. If the firm uses a ..

  Calculate the two projects MIRRs

You must make a recommendation, and you must base it on the modified IRR (MIRR). Calculate the two projects' MIRRs.

  What is the amount of monthly payments

The annual interest rate on the loan is 13.97 percent of the unpaid balance. What is the amount of the monthly payments?

  Supplier and argentinian buyer

XYZ Corporation has a British supplier and an Argentinian buyer. Transactions with his UK supplier are denominated in UK pounds and transactions with his Argentinian buyer are denominated in Argentinian pesos. The UK supplier gives XYZ 30 days from t..

  Considering four-year project to production efficieny

CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $494,000 is estimated to result in $193,000 in annual pretax cost savings. The press falls in the MACRS five-year class (MACRS Ta..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd