hybrid costing2

hybrid costing2 - c. Affect a companys cash flows but not...

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c. Affect a company’s cash flows but not its degree of risk. d. Have no effect on either cash flows or risk because the cash flows are already reflected in the income statement. e. None of the statements above is correct.
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Lease analysis discount rate Answer: a Diff: M i . The lease analysis should compare the cost of leasing to the a. Cost of owning using debt. b. Cost of owning using equity. c. After-tax cost of debt to measure the effect of leasing on the cost of equity. d. Average cost of all fixed charges. e. Cost of owning using the weighted average cost of capital for the firm. Convertibles Answer: e Diff: M ii . Which of the following statements about convertibles is correct? a. The coupon interest rate on convertibles is generally higher than on straight debt. b. New equity funds are raised by the issuer when convertibles are converted. c. Investors are willing to accept lower interest rates on convertibles because they are less risky than straight debt. d. At issue, a convertible’s conversion (exercise) price is often
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This note was uploaded on 08/04/2011 for the course COMM 101 taught by Professor Sy during the Spring '11 term at USC.

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hybrid costing2 - c. Affect a companys cash flows but not...

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