Why do Companies list on the stock market?
Listing provides a company with some "free" advertising, and it may enhance the firm's prestige and help it do more business. c. Listing reduces the reporting requirements for firms, because listed firms file reports with the exchange rather than with the SEC. d.
Can any firm be listed on the New York Stock Exchange?
Any firm can be listed on the NYSE as long as it pays the listing fee. b. Listing provides a company with some "free" advertising, and it may enhance the firm's prestige and help it do more business. c. Listing reduces the reporting requirements for firms, because listed firms file reports with the exchange rather than with the SEC.
What is it called when a manager buys all shares?
If managers make a tender offer and buy all shares that were not held by the management team, this is called a private placement. Which of the following statements is most CORRECT? a. Private placements occur most frequently with stocks, but bonds can also be sold in a private placement
What are the advantages of listing a large firm's stock?
Listing a large firm's stock is often considered to be beneficial to stockholders because the increases in liquidity and reputation probably outweigh the additional costs to the firm. c. Stockholders have the right to elect the firm's directors, who in turn select the officers who manage the business.
What happens if a lease has a negative residual value?
If a leased asset has a negative residual value, for example, as a result of a statutory requirement to dispose of an asset in an environmentally sound manner, the lessee of the asset could reasonably expect to pay a lower lease rate because the asset does not have a positive residual value. False.
What does capitalizing a lease mean?
Capitalizing a lease means that the firm issues equity capital in proportion to its current capital structure, in an. amount sufficient to support the lease payment obligation. b. The fixed charges associated with a lease can be as high as, but never greater than, the fixed payments associated with a loan.
What is synthetic lease?
A synthetic lease is a combination of derivative securities and asset purchases that mimic the cash flows of an operating lease. False. In a synthetic lease a special purpose entity (SPE) is set up by a corporation that wants to acquire the use of an asset.
Why is leasing less risky?
Make a company appear less risky than it actually is because its stated debt ratio will appear lower. Leasing is typically a financing decision and not a capital budgeting decision. Thus, the availability of lease financing. cannot affect the size of the capital budget.
What does it mean to leave money on the table?
The term "leaving money on the table" refers to the situation where an investment banking house makes a very low bid for the right to underwrite a firm's new stock offering. The banker is, in effect, "buying the job" with the low bid and thus not getting all the money his firm would normally earn on the job.
What does preferred stock mean?
The "preferred" feature of preferred stock means that it normally will provide a higher expected return than will. common stock. False. Unlike bonds, the cost of preferred stock to the issuing firm is the same on a before-tax and after-tax basis.
Can a convertible debenture sell for more than its conversion value?
A convertible debenture can never sell for more than its conversion value or less than its bond value. for common stock at the option of the holder.