=================================================== FIN 419 Final Exam Guide FOR MORE CLASSES VISIT www. fin419assist. com
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 creditors.
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.