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Certified Treasury Professional Questions and Answers

Question 29

The board of directors announces an increase in its dividend from $0.11/share to $0.15/share. Over the next two quarters, management notices that its investor base has shifted to include a large percentage of pension funds and endowment funds. This is the result of:

Options:

the clientele effect.

the ex-dividend date.

the dividend reinvestment plan.

dividend capture.

Question 30

Based on the above information,

if the company uses the trade-off theory in considering its WACC, how will it finance its growth?

Options:

By using long-term debt

By issuing Class A stock

By using retained earnings

By issuing Class B stock

Question 31

DGB Inc.’s CEO and founder retired shortly after the company went public two years ago. DGB Inc. has recently struggled, and the founder has agreed to return as an independent director. What violation, if any, has occurred?

Options:

The cooling-off period has not been met.

Section 404 of the Sarbanes-Oxley Act has been violated.

ERISA disclosure requirements have not been met.

No violation has occurred.

Question 32

Which of the following is NOT true for both bankers’ acceptances and trade acceptances?

Options:

They are both used to finance the shipment of goods.

They both may be sold to an investor at a discount prior to maturity.

They are both less expensive forms of financing than loans.

They both transfer the buyer’s credit risk to a third party.

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Certified Treasury Professional Questions and Answers

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CompTIA

Fortinet

Microsoft

Salesforce