Page 501 - Introduction to Business

CHAPTER 13 Financial Management of the Firm and Investment Management 475

interest payments on debt. If it has $200 of 9. Which of the following assists investors
net income before interest and taxes, the purchasing and selling financial securities?
firm’s net income after taxes is a. Investment bankers
a. $30. b. Underwriters
b. $40. c. Brokers
c. $70. d. Dealers
d. $100. e. Institutional investors
e. $140. 10. You buy a share of stock of a firm for $10.
8. In the voting process, shareholders have One year later you sell the share of stock for
the right to transfer their votes to another $12. Also you received a dividend during the
shareholder by means of a(n) year of $1. The rate of return on the stock is
a. proxy. a. 10 percent.
b. preemptive right. b. 20 percent.
c. capital gain. c. 25 percent.
d. dividend. d. 30 percent.
e. agency cost. e. 40 percent.

self-test
ACE Want more questions? Visit the student website at http://college.hmco.com/business/student/ (select Gaspar,
Introduction to Business) and take the ACE quizzes for more practice.

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