Financial Management: Core Concepts, Third Edition

Prepping for Exams

1. Which of the following would you classify as debt lenders for a firm?

   1. Preferred shareholders, banks, and nonbank lenders

   2. Nonbank lenders, common shareholders, and commercial banks

   3. Preferred shareholders, common shareholders, and suppliers

   4. Suppliers, nonbank lenders, and commercial banks

2.            refers to the way a company finances itself through some combination of loans, bond sales, preferred stock sales, common stock sales, and retention of earnings.

   1. Capital structure

   2. Cost of capital

   3. Working capital management

   4. NPV

3. The cost of debt could be which of the following?

   1. The required return on money borrowed as a long-term loan from a bank

   2. The required return on money borrowed from a venture capitalist