Author Question: The liquidity preference theory suggests that for any given issuer, long-term interest rates tend to ... (Read 34 times)

luminitza · **on:** Jul 11, 2018

The liquidity preference theory suggests that for any given issuer, long-term interest rates tend to be higher than short-term rates due to the lower liquidity and higher responsiveness to general interest rate movements of longer-term securities;

this causes the yield curve to be upward-sloping.
Indicate whether the statement is true or false

Question 2

Candy Corporation had pretax profits of 1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of 50,000. There were 100,000 shares outstanding and no interest expense.

What was Candy Corporation's earnings per share?
A) 3.91
B) 4.52
C) 7.42
D) 7.59