A corporation would repurchase its debt for all of the following reasons EXCEPT to:

A corporation would repurchase its debt for all of the following reasons EXCEPT to:



A. refinance at lower interest rates

B. increase its capitalization

C. increase the market value of its equity issues

D. reduce its sensitivity to earnings fluctuations due to cyclical conditions



Answer: B. Increase its capitalization

A corporation is preparing a registration statement for a new issue offering consisting of 300,000 new shares and 200,000 existing shares held by officers. The Public Offering Price is $30 per share. The spread taken by the underwriters is $2 per share. Which of the following will be changed as a result of the offering?

A corporation is preparing a registration statement for a new issue offering consisting of 300,000 new shares and 200,000 existing shares held by officers. The Public Offering Price is $30 per share. The spread taken by the underwriters is $2 per share. Which of the following will be changed as a result of the offering?



I Net working capital

II The number of outstanding shares

III Retained earnings (earned surplus)

IV Net worth



Answer: I, II, and IV

XYZ Company has 100,000,000 authorized common shares. 25,000,000 shares have been issued and another 10,000,000 shares are currently in registration. The sale of the 10,000,000 shares will result in all of the following EXCEPT a(n)

XYZ Company has 100,000,000 authorized common shares. 25,000,000 shares have been issued and another 10,000,000 shares are currently in registration. The sale of the 10,000,000 shares will result in all of the following EXCEPT a(n)



A. decrease in earnings per share

B. increase in net worth

C. decrease in net working capital

D. increase in the number of shares outstanding



Answer: C. Decrease in net working capital

Subscribe to: Posts (Atom)