Corporate Finance MCQ Multiple Choice Questions - Page 3 for Practice

Correct Answer is: The process of determining the long-term investment decisions of a company

Correct Answer is: The company is obligated to make regular interest payments

Correct Answer is: The discount rate that makes the net present value of an investment zero

Correct Answer is: Bond ratings reflect the company's ability to repay debt

Correct Answer is: WACC = (E/V * Re) + (D/V * Rd * (1-Tc))

Correct Answer is: Firms prefer to use internal funds first, then debt, and lastly, equity

Correct Answer is: Liquidity ratio

Correct Answer is: The return required by equity investors

Correct Answer is: The use of debt to increase the potential return on equity

Correct Answer is: It provides tax savings through interest deductions

Correct Answer is: Risk from fluctuations in market interest rates

Correct Answer is: The proportion of earnings paid out as dividends to shareholders

Correct Answer is: The company’s ability to generate earnings from its operations

Correct Answer is: Valuing stocks based on the present value of future dividends

Correct Answer is: The interest rate paid by the issuer on the bond’s face value