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10 Cards in this Set
- Front
- Back
1. Operating leverage refers to ________
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1. Operating leverage refers to ________
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2. A firm that uses large amounts of debt financing in an industry characterized by a high degree of business risk would have ______ earnings per share fluctuations resulting from changes in levels of sales.
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2. A firm that uses large amounts of debt financing in an industry characterized by a high degree of business risk would have ______ earnings per share fluctuations resulting from changes in levels of sales.
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3. JB Corporation has a retained earnings balance of $1,000,000. The company reported net income of $200,000, sales of $2,000,000, and had 100,000 shares of common stock outstanding. The company announced a dividend of $ 1 per share. Therefore, the company’s dividend payout ratio is _________.
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3. JB Corporation has a retained earnings balance of $1,000,000. The company reported net income of $200,000, sales of $2,000,000, and had 100,000 shares of common stock outstanding. The company announced a dividend of $ 1 per share. Therefore, the company’s dividend payout ratio is _________.
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4. Assume Harris, Inc. Has 10,000,000 common shares outstanding that have a par value of $2 per share. The stock is currently trading for $30 per share. The firm reported a net profit after-tax of $25,000,000. All else equal, what will happen to earnings per share if the company issues a 10 % stock dividend?
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4. Assume Harris, Inc. Has 10,000,000 common shares outstanding that have a par value of $2 per share. The stock is currently trading for $30 per share. The firm reported a net profit after-tax of $25,000,000. All else equal, what will happen to earnings per share if the company issues a 10 % stock dividend?
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5. All of the following are likely to result in the use of less debt in a company’s capital structure expect:
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5. All of the following are likely to result in the use of less debt in a company’s capital structure expect:
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6. Which of the following statements would be consistent with the Dividend Irrelevance Theory?
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6. Which of the following statements would be consistent with the Dividend Irrelevance Theory?
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7. The break even point in sales dollars is convenient if ______
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7. The break even point in sales dollars is convenient if ______
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8. In perfect capital markets there ______
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8. In perfect capital markets there ______
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9. Financial leverage could mean financing some of a firm’s assets with _______
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9. Financial leverage could mean financing some of a firm’s assets with _______
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10. Dividend policy is influenced by _______
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10. Dividend policy is influenced by _______
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