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greed to 350,000 ad ate s from etter or line of credit is a o a Premiums toan b

ID: 2792344 • Letter: G

Question

greed to 350,000 ad ate s from etter or line of credit is a o a Premiums toan b Diseount loan Syndicated loan credit card Moving from one source of fundre to anothe, ma partitura n 3. Pecking order hypothesis Barnyard oeder hypothesis c. Funding arder hypothesis d. Capital market hypothess M&M; Proposition I states that, in a world of ne tawed and no baokeruptcy The cost of debt increases with leverage The choice of financing is relevant to determining the firm's value in the short run How the company finances its operations affects the firm's value e. d. How the company finances its aperations does oot aftect the firm's valuse 5. dentify each of the following dates associated with the payment of a drvidend by beffersee State Timber Company: August 15, September 5, September 7 and September 22. Declaration date, ex-dividend date, record date, payment date Ex-dividend date, declaration date, record date, payment date a. b. C. Record date, declaration date, ex dividend date, payment date d. Declaration date, record date, payment date, ex-dividend date 6. Which of the following is a reason for a high-dividend-payout palicy? a. Dividends are generally taxed at a lower rate than capta) gains. All investors prefer high dividend payout payments over low dividend payments. b. c. Cash payments today are preferred over uncertain payments in the future d. More cash is left in the company for investing in company projects. Surf City, Inc. has decided on a 3-for-1 stock split. If the firm currently has 900,000 shares outstanding, how many shares will be outstarding after the stock split? a. 3,600,000 shares b. 2,700,000 shares c. 1,200,000 shares 7. d. 300,00 shares

Explanation / Answer

7-2700000 =900000*3 = 2700000 share after stock split

6-C- cash payment today are preferred over uncertain payment in future

5-A= declaration date, ex dividend date, record date, payment date

4-Answer is B - as leverage increase cost of equity will start increase because of more risk involved and WACC will remain constant

3- A -pecking order hypothesis

2-D- credit card

1-c 1532.45

PMT = rate*PV / 1-(1+r)^n = .541667%*50000 / 1-(1.00541667)^-36 = 1532.45