Homework help multiple choice questions

Your firm has preferred stock outstanding that pays a current dividend of

$3.00 per year and has a current price of $39.50. You anticipate that the

economy will grow steadily at a rate of 3.00% per year for the foreseeable

future. What is the market requir

ed rate of return on your firm's preferred

stock?

A. 10.82%

B. 10.59%

C. 7.59%

D. There is not enough information to answer this question

Ready

Tees,

an

on

line

retailer

of

t

-

shirts,

orders

100,000

t

-

shirts

per

year

from

its

manufacturer.

Ready

plans

on

ordering

t

-

shirts

12

times

over

the

next

year.

Ready

receives

the

same

number

of

t

-

shirts

each

time

it

orders.

The

carrying

cost

is

$0.10

per

shirt

per

year.

The

order

cost

is

$500

per

order.

What

is

the

annual

ordering

cost

of

the

t

-

shirt

inventory

(rounded

to

the

nearest

dollar)?

_____

_

A.

5.000

B.

$6,0

00

C.

$10,000

D.

$12,000

Lipscomb

is

set

to

establish

a

reorder

policy

for

his

remote

snack

bar

locate

d

on

Vacation

Island.

He

sells

10

cases

of

soda

per

day

and

has

a

lead

-

time

for

delivery

of

one

week.

Occasionally,

bad

weather

or

mechanical

difficulty

can

delay

his

delivery

by

up

to

three

days.

At

what

point

should

Lipscomb

reorder

(how

many

cases

on

ha

nd)

if

he

wants

to

also

compensate

for

unexpected

order

delays?

A.

30

cases

B.

70

cases

C.

100

cases

D.

There

is

not

enough

information

to

answer

this

question

Your firm has preferred stock outstanding that pays a current dividend of

$3.00 per year and has a current price of $39.50. You anticipate that the

economy will grow steadily at a rate of 3.00% per year for the foreseeable

future. What is the market required rate of return on your firm's preferred

stock?

A. 10.82%

B. 10.59%

C. 7.59%

D. There is not enough information to answer this question

Ready Tees, an on line retailer of t-shirts, orders 100,000 t-shirts per year from its

manufacturer. Ready plans on ordering t-shirts 12 times over the next year. Ready

receives the same number of t-shirts each time it orders. The carrying cost is $0.10 per

shirt per year. The order cost is $500 per order. What is the annual ordering cost of the

t-shirt inventory (rounded to the nearest dollar)? ______

A. 5.000

B. $6,000

C. $10,000

D. $12,000

Lipscomb is set to establish a reorder policy for his remote snack bar located on Vacation Island.

He sells 10 cases of soda per day and has a lead-time for delivery of one week. Occasionally, bad

weather or mechanical difficulty can delay his delivery by up to three days. At what point should

Lipscomb reorder (how many cases on hand) if he wants to also compensate for unexpected

order delays?

A. 30 cases

B. 70 cases

C. 100 cases

D. There is not enough information to answer this question