(I) The total cost of carrying out a transaction in financial markets increases proportionally with the size of the transaction
(II) Financial intermediaries facilitate diversification when an investor has only a small sum to invest.
A) (I) is true; (II) false.
B) (I) is false; (II) true.
C) Both (I) and (II) are true.
D) Both (I) and (II) are false.
B
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Ethan believes that he and Fiorina agreed that he would find the best location for a well on her ranch and then dig the well. In a later dispute, whether a contract was formed can be determined by
a. the parties' statements at the time of their alleged contract. b. what Ethan claims was the parties' intent. c. what Fiorina claims was the parties' intent. d. what the parties agree they intended.
When a buyer receives an invoice for $100 with terms of "2/15 net 30" she can expect to pay
A. less than $100 if she pays during the first 15 days. B. more than $100 if she pays between day fifteen and day thirty. C. the full $100 if she waits more than 30 days to pay. D. $100 if she pays anytime during the first fifteen days. E. $100 if she pays anytime in the first 30 days.
The ________ is the time it takes to acquire and sell the inventory
A) collection period B) turnover C) inventory period D) operating period
Consider the Modigliani and Miller world of corporate taxes. An unlevered (all-equity) firm value is $500 million
By adding debt, the annual interest expense is $100 million, the corporate tax rate is 30%, and the discount rate on the tax shield is 8%. What is the value of the firm after adding debt? A) $500 million B) $875 million C) $938 million D) $1,000 million