Citibank Has One Group of Loan Officers Who Handle Consumer

question 54

Multiple Choice

Citibank has one group of loan officers who handle consumer loans and another group who work in the commercial loan area. Grouping work units this way is known as departmentalization by

• A) function.
• B) customer.
• C) product.
• D) specialty.
• E) location.

Estimate the company's cost of equity.

Determine the weights of common stock, preferred stock, and debt in capital structure.

Understand the implications of dividend growth rate on cost of equity.

Analyze the impact of flotation costs on financing decisions.

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Definitions:

Bond B

A reference to a specific bond investment, often denoted for classification or tracking purposes.

Current Yield

The annual income (interest or dividends) divided by the current price of the security, often used in assessing bonds and other fixed-income investments.

5 ½% Bond

A bond that pays a 5.5% interest rate to its holders, typically annually or semi-annually.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, including all interest payments and the repayment of principal.