Volga Publishing Is Considering a Proposed Increase in Its Debt

question 31

Multiple Choice

Volga Publishing is considering a proposed increase in its debt ratio, which would also increase the company's interest expense. The plan would involve issuing new bonds and using the proceeds to buy back shares of its common stock. The company's CFO thinks the plan will not change total assets or operating income, but that it will increase earnings per share (EPS) . Assuming the CFO's estimates are correct, which of the following statements is CORRECT?

• A) Since the proposed plan increases Volga's financial risk, the company's stock price still might fall even if EPS increases.
• B) If the plan reduces the WACC, the stock price is also likely to
• Decline.
• C) Since the plan is expected to increase EPS, this implies that net
• Income is also expected to increase.
• D) If the plan does increase the EPS, the stock price will
• Automatically increase at the same rate.
• E) Under the plan there will be more bonds outstanding, and that will increase their liquidity and thus lower the interest rate on the
• Currently outstanding bonds.

Understand the various steps and components of the nursing process.

Identify and apply critical-thinking skills in nursing practice.

Recognize appropriate types of databases for patient assessment in various settings.

Describe the principles and importance of evidence-based practice in nursing.

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Definitions:

Assessment Centers

A method used by organizations to evaluate candidates' abilities by subjecting them to a variety of exercises, simulations, and activities designed to simulate real-life job scenarios.

Ability Tests

Assessments designed to evaluate a person's competence in specific skills or areas of knowledge, often used in academic evaluations or employment selection processes.

Work Simulation

A training or assessment tool that replicates actual job tasks and conditions for the purpose of teaching or evaluating job performance.

Plant Recognition

The identification and classification of plant species using various methods, including visual observation and digital tools.