FINC 331 Week 7 Homework (UMUC)

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FINC 331 Week 7 Homework (UMUC)

1. The Modigliani-Miller theory suggests that it doesn’t matter to a shareholder whether a company issues dividends. Why might that theory not be applicable to the US stock market as it currently exists?
2. Which of the following is an accurate description of one of the dates related to issuing dividends.
3. Under the Modigliani-Miller theorem in finance, the value of a company depends on:
4. Which of the following is a method of payment a corporation can use to pay a dividend?
5. A company wants to implement a capital growth policy. In the current year it had $10 million in net income. How much income should it distribute in dividends?
6. Which of the following is a drawback of share repurchases for shareholders?
7. Which of the following accurately describes how a stock dividend differs from a stock split?
8. Which of the following changes after a stock splits?
9. Which of the following is a shareholder benefit associated with a dividend reinvestment program (DRIP)?
10. Complete the following statement so that it is always true: If a company has significant working capital, _____.
11. A company has $20,000 in cash, $10,000 in accounts receivable and $45,000 in fixed assets. It has $12,5000 in accounts payable. It owes $50,000 in two years on a note that has an annual interest payment of $5,000. What is its working capital?
12. Which of the following factors need to be considered evaluating a company’s working capital strategy?
13. Which of the following explains why working capital may not be a pure measure of short-term assets and liabilities?
14. A company has $350,000 in accounts receivable, $100,000 in current inventory, and $125,000 in accounts payable. What is its working capital?
15. Which of the following correctly defines a factor that influences a company’s working capital financing decisions?
16. Which of the following is an acceptable strategy for managing a company’s disbursements?
17. Which of the following should a company ALWAYS do with regards to its collection policy?
18. Which of the following is a reason a company would hold marketable securities?
19. A customer has 45 days from the date of invoice to pay a bill in full, but if he pays within 15 days of the invoice, he gets a 10% discount. Which of the following describes these terms of trade?
20. Which of the following correctly defines one of the “Five C’s of Credit?”