What is ningbo shipping wacc

Question 1

Which of the following is not an advantage of short-term borrowing?

flexibility

establishing continuous relationships with a bank or financial institution

frequent renewals

lower cost

Question 2

The time between when the firm pays its suppliers and when it collects money from its customers is known as the:

operating cycle

cash conversion cycle

accounts receivable period

clearing cycle

Question 3

Which of the following would not normally be discussed when describing a firm's operating cycle?

manufacturing process

selling effort

acquiring financing

collection period

Question 4

Working capital does not include:

cash

accounts receivable

marketable securities

property, plant, and equipment

Question 5

The time between ordering materials and collecting cash from receivables is known as the:

operating cycle

cash conversion cycle

accounts receivable period

term payable cycle

Question 6

Which would not be likely to be accepted as collateral for an inventory loan?

nails at a hardware store

cars at an automobile dealership

vegetables at a grocery store

TV's at an appliance store

Question 7

When old short-term debt is replaced by new short-term debt as the old debt comes due, the process is known as:

compensating balance

rolling the debt

fluctuating financing

re-terming

Question 8

If a firm has positive net working capital, the current ratio is:

greater than one

less than one

equal to one

between zero and one

Question 9

If a firm actually sells its accounts receivable, the process is known as:

wholesale financing

pledging

field crediting

factoring

Question 10

The most important form of short-term business financing is:

a revolving credit agreement

accounts-receivable financing

inventory loans

trade credit

Question 11

The time required for the cumulative cash flows from a project to equal zero is called the:

profitability index

cash flow time frame

project life

payback period

Question 12

If a project has a positive net present value (NPV), then the profitability index is:

greater than one

less than one

equal to one

negative

Question 13

The internal rate of return concept is best explained by which of the following?

rate where NPV is equal to zero

point where initial investment has been returned

marginal cost of capital

average book value

Question 14

The payback period concept is best explained by which of the following?

marginal cost of capital

point where initial investment has been returned

rate where NPV is equal to zero

accounting rate of return

Question 15

Internal rate of return (IRR) and net present value (NPV) methods:

generally arrive at the same accept/reject decisions

are less sophisticated than the payback period

cannot make use of the same cash flows

can be substituted for by the payback period

Question 16

The after-tax cost of debt for a firm in the 35% tax bracket with a before-tax cost of debt of 6% is:

6%

2.1%

3.9%

5.8%

Question 17

Ningbo Shipping has common stock with a market price of $25 per share and an expected dividend of $2 per share at the end of the coming year. The growth rate in dividends has been 5 percent and this growth is expected to continue indefinitely. Based on this information, the cost of the firm's common stock equity is

5%.

8%.

10%.

13%.

Question 18

What is Ningbo Shipping's WACC if it's after tax cost of debt is 3.5%, it's cost of retained earnings is 14%, and the firm's market value of debt is $40 million while the market value of its equity is $60 million?

9.8%.

3.5%.

11.8%.

14.7%.

Question 19

The cost of debt:

is typically higher than the cost of preferred stock

must be adjusted to an after-tax cost

is higher than the cost of retained earnings

is the lowest component cost because corporations can deduct 70 percent of the interest expense

Question 20

Ningbo Shipping has issued preferred stock at its $125 per share par value. The stock will pay a $15 annual dividend. The cost of issuing and selling the stock was $4 per share. The cost of Ningbo Shipping preferred stock is:

7.2%.

12.0%.

12.4%.

15%.