Which of the following is correct   a. In a leveraged recapitalization, a firm uses its excess cash to buyback shares    b. In an LBO, a firm borrows and repurchases its shares thereby reducng the number of shares outstanding.     c. In a leveraged recapitalization, a change of ownership occurs as the firm is sold   d. In an LBO, debt is a major component of the financing and a change of control occurs.     e. In an LBO, managers use excess cash to repurchase shares

Please answer this in short-way is okay. thank you

98) Which of the following is an example of an action done by a firm to conduct financial structuring? a) Stock buy-back b) Leveraged buy-out c) Either A and B d) Neither A nor b

When a firm conducts a seasoned equity offering and uses the proceeds to purchase a portion of the firm's outstanding debt, then the firm's Group of answer choices business risk increases. financial risk decreases. financial risk increases. business risk increases.

The term Capital forbearance refers to: a. Capital injected by the shareholders of a FI for expansion. b. Freezing of the undistributed capital of an FI by the regulators. c. Regulators’ policy of allowing an FI to continue operating even when its capital funds are fully depleted. d. Mandatory actions that have to be taken by regulators as a DI’s capital ratio falls

Stock repurchases occur when a company buys its outstanding stock which is often referred to as treasury stock and is reported as a negative value on the company’s balance sheet. In a share repurchase, firms use excess cash to buy shares back from investors. These shares are to be held in the corporate treasury and resold if the company needs money. There are several approaches to conducting share repurchases. Consider the following situation: The firm announces its intention to buy shares of its own stock, like an ordinary investor, and proceeds to do so.   What method is described in the preceding situation? Auction   Tender offer   Open-market transaction   Direct negotiation     In a taxless world with no brokerage costs, repurchases and dividends have the same effect on shareholder wealth. In the real world, however, repurchases provide more preferable tax treatment than dividends to ordinary investors. Does this mean that firms should always use…

Which of the following statements about payout policy is FALSE? a.  Share repurchases concentrate ownership in the hands of the remaining shareholders, making their shares worth more than they were before the repurchase.   b.  Firms should generally pay out no more than their free cash flow to equity, unless they are in the process of paying out a large cash balance.   c.  Dividends typically increase at a slower rate than earnings.   d.  Firms today return more cash to shareholders through repurchases than through dividends.   e.  Dividends are lower for firms that have higher growth rates.

Which of the following would reduce a firm's WACC after tax? a. A firm invests in an average-risk project using equity, rather than debt financing. b. A supermarket chain decides to establish hardware stores which increases its systematic risk. c. A firm issues shares and uses the proceeds to pay off a bank loan. d. A firm issues bonds and uses the proceeds to repurchase stock. e. A firm significantly improves its operating cost control to boost profits.