This topic contains a solution. Click here to go to the answer

Author Question: AFB, Inc purchases a new delivery van which is expected to increase cash flows for the next 10 ... (Read 19 times)

neverstopbelieb

  • Hero Member
  • *****
  • Posts: 534
AFB, Inc purchases a new delivery van which is expected to increase cash flows for the next 10
  years. AFB can finance the purchase with a standard 48-month vehicle loan, or by getting a 10-year
  loan from the bank.
 
  According to the hedging principle, AFB should
  A) use the 10-year financing in order to match the cash flow stream from the asset with the
  financing repayments.
  B) use the 48-month loan since it matches the type of asset with the type of loan.
  C) avoid using either loan and finance the truck with current cash reserves to avoid interest
  expense.
  D) use either type of financing, but hedge the risk in the options market.

Question 2

Which of the following is true if dividend policy is irrelevant?
 
  A) The information effect exists. B) Tax deferral on capital gains exists.
  C) The clientele effect exists. D) Perfect capital markets exist.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

nanny

  • Sr. Member
  • ****
  • Posts: 313
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 25% of students answer this correctly




neverstopbelieb

  • Member
  • Posts: 534
Reply 2 on: Jul 10, 2018
Excellent


scikid

  • Member
  • Posts: 300
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

The average older adult in the United States takes five prescription drugs per day. Half of these drugs contain a sedative. Alcohol should therefore be avoided by most senior citizens because of the dangerous interactions between alcohol and sedatives.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

People about to have surgery must tell their health care providers about all supplements they take.

Did you know?

There are 60,000 miles of blood vessels in every adult human.

For a complete list of videos, visit our video library