Sonia,through fraudulent representations,induced Gracie to execute a negotiable note payable to Sonia.Sonia is a holder in due course.

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Sheehan Corp.is forecasting an EPS of $3.00 for the coming year on its 500,000 outstanding shares of stock.Its capital budget is forecasted at $800,000,and it is committed to maintaining a $2.00 dividend per share.It finances with debt and common equity,but it wants to avoid issuing any new common stock during the coming year.Given these constraints,what percentage of the capital budget must be financed with debt?

A) 32.15%
B) 33.84%
C) 35.63%
D) 37.50%

Beverly works for a large publicly traded company and regularly receives incentive stock options as bonuses.In the current year,Beverly exercises options to purchase 1,000 shares at $48 per share when the market value is $72 per share.What is Beverly's AMT adjustment from the exercise of the options?

A) $24,000.
B) $48,000.
C) $72,000.
D) None of these.

In the investor's choice problem, the budget line describes:

A) the trade-off between risk and expected return.
B) combinations of risk and return that leave the investor equally satisfied.
C) combinations of risk associated with combinations of stocks and riskless assets.
D) the quantity of stocks that can be purchased with a limited budget constraint.