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Exam 18: Financial Management

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Question 51

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Sierra purchases a corporate bond from Mattel.On the bond it states that Sierra will receive her money back on February 15, 2022.This is the bond's ____ date.

A) Declaration
B) maturity
C) conversion
D) redemption
E) expiration

F) C) and E)
G) A) and E)

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Question 52

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As a stockholder in the Giant Plants Company, you have the right to vote on all of the following issues except

A) amendments to the corporate charter.
B) the price the firm charges for its products.
C) the sale of certain assets.
D) new issues of preferred stock or bonds.
E) changes in the amount of ordinary share issued.

F) All of the above
G) A) and C)

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Question 53

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Morgan's Transition Morgan is currently a manager of a small financial planning firm.He is seeking a new career with a large corporation in the banking industry.He recently applied for the financial manager opening at G & T Bank.He is concerned that the transition from his small firm to a large corporation will be difficult.To better prepare himself for this change, he has decided to enroll in a few business classes to strengthen his understanding of corporate finance.The business classes have proven to be a valuable tool for learning the critical skills needed to fully understand a financial plan, equity financing, and debt financing.Morgan now believes he has strengthened his competitive advantage in his quest for the job. -Refer to Morgan's Transition.Having taken the classes, Morgan should describe cash flow as which of the following?

To raise money, Fawcett Productions sold its accounts receivable to a ____.In doing so, Fawcett received cash and shifted to the other company both the task of collecting and the risk of nonpayment.

Which of the following statements is true?

For a department store such as Macy's, the most likely need for short-term financing will be for

____ is (are) short-term promissory notes with no collateral that are issued by large corporations.

Debbie purchases a corporate bond from Safeway.She has the option of redeeming her bond for 55 shares of Safeway ordinary share at any time.This is a ____ bond.

The lowest interest rate charged by a bank for a short-term loan is called the discount rate.

When a firm makes annual deposits to repay bondholders at maturity, it is using a

MCB Company experienced a significant increase in sales as a result of its new promotional campaign.Yesterday, however, it realised that because most of those sales were on credit, it did not have enough money in the bank to pay this month's bills.MCB can take care of this situation temporarily by

Collateral is not required for most short-term financing.

Bonds that can be exchanged for a specified number of shares of ordinary share are called convertible bonds.

Harlen Manufacturing is hesitant to extend trade credit to Brendan Drake.Instead, Brendan agrees to sign a promissory note.Harlen prefers this note because

Short-term financing is used to finance a merger or expansion.

All of the following would be considered appropriate collateral for a long-term loan except

Commercial paper is short-term promissory notes issued by large corporations.

Todd develops a plan for obtaining and using the money necessary for his company to implement its goals.This is called a(n)

What is the typical denomination for most corporate bonds?

Erras Corporation issued 6 percent preferred stock with a par value of €30.The annual dividend amount per share is