1. An increase in current liabilites will have which one of the following effects, all else held constant? Assume all ratios have postitive values.
a. increase in the cash ratio
b. increase in the net working capital to total asset ratio
c. decrease in the quick ratio
d. decrease in the cash coverage ratio
e. increase in the current ratio
2. A firm has an interval measure of 48. This means that the firm has sufficient liquid assets to do which one of the following?
a. pay all of its debts that are due within the next 48 hours
b. pay all of its debts that are due within the next 48 days
c. cover its operating costs for the next 48 hours
d. cover its operating costs for the next 48 days
e. meet the demands if its customers for the next 48 hours
3. Which one of the following ratios identifies the amount of assets a firm needs in order to generate $1 in sales?
a. current ratio
b. equity multiplier
c. retention ratio
d. capital intensity ratio
e. payout ratio
4. The cost of preffered stock:
a. is equal to the divident yeild
b. is equal to the yeild to maturirty
c. is highly dependent on the dividend growth rate
d. is independent of the stock's price
e. decreases when tax rates increase