Agricultural policies UE Past Papers Questions.

The amount of earnings per share

1. May have to be computed in two different ways if a firm has outstanding some securities or obligationsthat represent potential for dilution of the firm`s earnings
2. Is confidential information , release of which by a firm`s management would bring action by government regulatory agencies
3. Is likely to be very high for old established firms
4. Is likely to be high for firms that have high price-earning ratios.

Answer / Solution

UNSOLVED

If a company has a high payout ratio:

1. It may have had a particularly large drop in profit that year
2. It is probably a growth company
3. It is probably a high price-earning -ratio
4. It probably has few shares of stock outstanding.

Answer / Solution

UNSOLVED

Which of the following statements about solvency is true

1. A firm`s solvency is of special concern to its long-term creditors
2. A firm that is solvent would have no liquidity problems
3. A firm`s solvency relates to the firm`s debts and is little concerned to the firm`s stockholders
4. A firm`s solvency is unrelated to the extent of its financing leverage

Answer / Solution

UNSOLVED

Which of the following analytical ratios would not normally be classified as related to solvency?

1. Return on equity
2. Cash-flow to total debt
3. Times interest earned
4. Debt ratio

Answer / Solution

UNSOLVED

Which of the following is true

1. The current ratio of an electricity or water utility company would probably be lower than that of a tractor and power tiller manufacturer
2. Because it is desirable to be liquid, a firm should keep as much cash as possible
3. Because leverage is advantageous to the stockholders, a firm should try to attain a high debt ratio
4. Just prior to Christmas season, a department store would probably have higher than average current and quick assets ratios.

Answer / Solution

UNSOLVED