question archive Question One: State whether the following statements are true or false and justify the false : A) All forms of businesses sell stocks/shares in the stock market whether sole proprietorships, partnerships or corporations
Question One: State whether the following statements are true or false and justify the false : A) All forms of businesses sell stocks/shares in the stock market whether sole proprietorships, partnerships or corporations
Subject:FinancePrice: Bought3
Question One: State whether the following statements are true or false and justify the false :
A) All forms of businesses sell stocks/shares in the stock market whether sole proprietorships, partnerships or corporations. (T/F)
B) Corporations cannot sell shares/stocks without the help of an investment bank. (T/F)
C) Both the debt ratio and the Times Interest Earned (TIE) ratios calculate the efficiency of the company in turning its assets into sales. (T/F)
D) Systematic risk could always be eliminated by increasing the investment of different stocks from different companies (creation of portfolio) by shareholders. (T/F)
E) Corporate Governance is one of the tools that increases agency problems.(T/F)
Question 2
a) XYZ stock had a required rate of return of 11.75% last year, when the risk free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk free rate and the firm's beta remain unchanged. What is the company's new required rate of return?
