A firm expects growth next year to be 10%. Its sustainable growth rate is 12%. Which of the following is true?
A) The firm will need to raise additional debt such that its debt to equity ratio will increase.
B) The firm may be able to keep its debt to equity ratio the same by reducing dividends (assuming they are projected to be high enough).
C) The firm will need to raise additional capital through a stock issue.
D) The firm will have excess cash to increase dividends, pay back debt, or repurchase equity.
Answer: D
You might also like to view...
Which of the following is a provision of the Family Support Act?
A) that same-sex marriages are permissible for people who are legally eligible to marry B) that specify how property will be distributed on termination of the marriage by divorce or annulment, or the death of a spouse C) that all original or modified child support orders require automatic wage withholding from a noncustodial parent's income D) that states cannot refuse to offer federal benefits like Social Security to same-sex married couples
The present value of a $1 annuity payable over 25 years at a net discount rate of 3% is $17.41. Consequently, the value of a $1 annuity due payable over 26 years is
A) $18.41. B) $17.41. C) $16.41. D) -$17.41.
Which statement is true about medical expense coverage under the boatowners package policy?
A) It pays the medical expenses of a covered person who is injured while in the boat. B) It pays the medical expenses of another boat operator who is injured as a result of negligent operation of the boat by the insured. C) It pays the medical expenses of a swimmer or a water skier being towed by another boat if he or she is hit by the insured's boat. D) It pays the medical expenses of someone on a dock or pier if the insured's boat hits the dock or pier and injures him or her.
Which of the following is required for a successful implied contract wrongful discharge claim?
a. a written contract signed by both the employer and the employee b. a specific oral promise limiting employment at will c. a clear and prominent written disclaimer d. all of the above e. none of the above