Which of the following is a source of short-term financing?

• A.Retaining profits
• B.Factoring of accounts receivable
• C.Issuance of common stock
• D.Bond issuance

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Refer to the following information about a company at the end of its fiscal year.

The before-tax cost of long-term debt is 10% and the cost of equity is 12%. The marginal
tax rate is 35%.
What is the company's long-term debt to total capitalization ratio?

• A.0.67
• B.0.44
• C.0.78
• D.0.73

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What must be measured and monitored to ensure that a company has adequate liquidity?

• A.Stock price
• B.Short-term borrowing obligations
• C.Net working capital
• D.Net receivables

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Which of the following is a PRIMARY responsibility of a company's risk management function?

• A.Leasing
• B.Auditing
• C.Insurance
• D.Liquidity monitoring

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Company ABC has recently started to experience a significant reduction in funds availability. Which of the following is MOST LIKELY to reduce funds availability?

• A.Deposits are arriving at bank later, but prior to cutoff time.
• B.Ledger balances have increased.
• C.Company negotiated a later availability schedule.
• D.Company no longer pre-encodes its checks for deposit.

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