Exam 14: An Overview of Corporate Financing

A firm has $100 million in current liabilities,$200 million in total long-term liabilities,$300 million in stockholders' equity,and total assets of $600 million.Calculate the debt ratio for the firm.

The change in a firm's retained earnings is:

Briefly explain the voting rights of shareholders.

Consider the aggregate balance sheet for manufacturing corporations in the U.S.Which of the following sources of financing plays the smallest role?

Stockholders usually have the following rights: I.to elect board members,authorize issue of new shares,and vote on matters of great importance like mergers; II.to share proportionally in regular and liquidating dividends; III.to share proportionally in any new stock sold

A grant of authority allowing someone else to vote shares of stock that you own is called: i.repurchase agreement; II)proxy voting; III)share repurchase

Briefly list the various functions of financial institutions.

U.S.firms,in general,have been repurchasing shares and thus net equity issues have been negative.

Why do firms rely heavily on internal funds?

When completing a large debt issue,financial managers of large firms will usually consider the following questions EXCEPT: I.Should the firm borrow short term or long term? II.Should the firm issue fixed- or floating-rate debt? III.Should the firm borrow in foreign currency?

A modification to the company charter that requires 75% shareholder approval for a merger is called a:

The following functions,provided by financial intermediaries,enable the smooth functioning of the economy: i.processing of payments; II)borrowing and lending; III)pooling risks