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debt and 1,000 shares of common stock . The firm pays taxes at the rate of 30 %.
14 ) Various Capital Structures Character Enterprises currently has $ 1.5 million in total assets and is totally equity financed . It is contemplating a change in its capital structure . Compute the amount of debt and equity that would be outstanding is the firm were to shift to each of the following debt ratios : 10 %, 20 %, 30 %, 40 %, 50 %, 60 %, and 90 %.
=================================================== FIN 419 Final Exam Guide FOR MORE CLASSES VISIT www . fin419assist . com
True / False ( 1point each )
1 . The sole proprietor has unlimited liability ; his or her total investment in the business , but not his or her personal assets , can be taken to satisfy
2 . Time-value of money is based on the belief that a dollar that will be received at some future date is worth more than a dollar today .
3 . Holders of equity have claims on both income and assets that are secondary to the claims of creditors .
4 . The possibility that the issuer of a bond will not pay the contractual interest or principal payments as scheduled is called maturity risk .