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Name: Class: Date: 01: An Overview of Managerial Finance Copyright Cengage Learning. Powered by Cognero. Page 1 1. Which of the following statements is correct? Assume everything else equal. a. Riskier assets always have higher market values. b. Riskier assets […]

Name: Class: Date: 02: Analysis of Financial Statements Copyright Cengage Learning. Powered by Cognero. Page 1 1. Which of the following financial statements is included in the annual reports of a company? a. Statement of changes in long-term financing b. […]

Name: Class: Date: 03: The Financial Environment: Markets, Institutions, and Investment Banking Copyright Cengage Learning. Powered by Cognero. Page 1 1. Which form of informational efficiency states that current market prices of securities reflect all pertinent information? a. Strong-form b. […]

Name: Class: Date: 04: Time Value of Money Copyright Cengage Learning. Powered by Cognero. Page 1 1. When the payment for an annuity is made at the end of each period, such an annuity is referred to as a(n) _____. […]

Name: Class: Date: 05: The Cost of Money (Interest Rates) Copyright Cengage Learning. Powered by Cognero. Page 1 1. Everything else equal, which of the following actions would tend to increase interest rates in the financial markets? a. Investors’ time […]

Name: Class: Date: 06: Bonds (Debt)—Characteristics and Valuation Copyright Cengage Learning. Powered by Cognero. Page 1 1. Which of the following is generally considered an advantage of term loans over corporate bonds? a. Higher flotation costs b. Speed, or how […]

Name: Class: Date: 06: Bonds (Debt)—Characteristics and Valuation Copyright Cengage Learning. Powered by Cognero. Page 14 b. 2,596 c. 3,073 d. 5,282 e. 4,275 75. Cold Boxes Corporation has 100 bonds outstanding with a maturity value of $1,000. The required […]

Name: Class: Date: 07: Stocks (Equity)—Characteristics and Valuation Copyright Cengage Learning. Powered by Cognero. Page 1 1. If a firm wants to be able to redeem some of its preferred stock at some date after issue, it must _____. a. […]

Name: Class: Date: 08: Risk and Rates of Return Copyright Cengage Learning. Powered by Cognero. Page 1 1. Which of the following statements gives the best definition/description of the risk that is associated with an investment? a. The total risk […]

Name: Class: Date: 09: Capital Budgeting Techniques Copyright Cengage Learning. Powered by Cognero. Page 1 1. Which of the following statements best describes the post-audit function in the capital budgeting process? a. The post-audit should be performed before a purchase […]

Name: Class: Date: 10: Project Cash Flows and Risk Copyright Cengage Learning. Powered by Cognero. Page 1 1. The incremental cash flows associated with a capital budgeting project that occur only at the start of a project’s life are included […]

Name: Class: Date: 11. The Cost of Capital Copyright Cengage Learning. Powered by Cognero. Page 1 1. The before-tax cost of debt, rd, is the same as the: a. yield to maturity (YTM) associated with the firm’s bonds. b. dividend […]

Name: Class: Date: 12: Capital Structure Copyright Cengage Learning. Powered by Cognero. Page 1 1. A firm’s ______ is the combination of debt and equity it uses to finance its assets. a. capital budgeting plan b. business risk c. asset […]

Name: Class: Date: 13: Distribution of Retained Earnings: Dividends and Stock Repurchases Copyright Cengage Learning. Powered by Cognero. Page 1 1. The ______ effect is the tendency of a firm to attract the type of investor who prefers its dividend […]

Name: Class: Date: 14: Managing Short-Term Financing (Liabilities) Copyright Cengage Learning. Powered by Cognero. Page 1 1. Net working capital is equal to: a. current assets. b. current liabilities. c. current assets divided by current liabilities. d. current assets minus […]

Name: Class: Date: 15: Managing Short-Term Assets Copyright Cengage Learning. Powered by Cognero. Page 1 1. The _____ current asset investment policy calls for relatively large amounts of current assets to be carried by a company. a. relaxed b. restricted […]

Name: Class: Date: 16: Financial Planning and Control Copyright Cengage Learning. Powered by Cognero. Page 1 1. The ______ forecast is the most important ingredient of the financial forecasting process. If this forecast is inaccurate, the consequences to the forecasting […]

Chapter 10 Spreadsheet Problem Solutions (C10) 1. There are a number of instructions with which you should be familiar to use these computerized models. These instructions appear in a 2. The model is set up to deal with a situation […]

Chapter 11 CFIN6 Chapter 11 Solutions 11-1 a. Equation solution (set up):  −  + =+   +    10 10 1 11 (1 YTM) $1,077 $60 $1,000 YTM (1 YTM) PMT = 60 FV = […]

C12 Chapter 12 Spreadsheet Problem Solutions (C12) 1. There are a number of instructions with which you should be familiar to use these computerized models. These instructions appear in a 2. A graph that shows the expected EPS and standard […]

Variable cost ($5,833.33) ($5,833.33) Collection costs ($416.67) ($416.67) Required rate of return, r/360 0.0306% 0.0306% Chapter 15 Spreadsheet Problem Solutions (C15) INPUT DATA: Old New Annual Data: Sales $3,000,000 $3,000,000 Variable cost ratio 70.0% 70.0% Variable cost $2,100,000 $2,100,000 Collection […]

Current assets $225,000 $300,000 $450,000 Net fixed assets $300,000 $300,000 $300,000 Current liability 10.00% $300,000 $150,000 $75,000 Long-term debt 13.00% $0 $150,000 $300,000 Equity $225,000 $300,000 $375,000 Chapter 15 Spreadsheet-Related Problem Solution (C15B) INPUT DATA: Aggressive Moderate Conservative Sales $1,250,000 […]

C16 INPUT DATA: KEY OUTPUT: Debt costs: Profit margin 5.0% 4.9% 4.8% 4.6% 4.5% 4.4% Notes payable 8.0% TA turnover 1.1 1.1 1.1 1.1 1.1 1.1 Long-term bonds 11.0% ROA 5.6% 5.4% 5.3% 5.1% 5.0% 4.9% Tax rate 40.0% Debt […]

C03 Chapter 3 Spreadsheet Problem Solutions (C03) INPUT DATA: KEY OUTPUT: Amount needed by the firm: $170,000 Issue amount ($): $200,000 2. There are a number of instructions with which you should be familiar to use these computerized models. These […]

each of the next 20 years at an interest rate of 10 percent. What is the annual payment? c. Set up an amortization schedule for a $60,000 loan to be repaid in 20 equal annual installments at an interest rate […]

1 2 3 4 5 6 7 8 9 15 16 17 18 22 23 24 25 26 27 28 29 30 31 Real risk free rate 2.0% Expected inflation Year 16.0% 24.0% 33.5% 43.0% 52.5% 6 and beyond 2.0% […]

CFIN6 Spreadsheet Problem Solution Chapter 5 a. Years to Real risk-free Inflation Maturity Risk Treasury Maturity rate (r*) Premium (IP) Premium (MRP) Yield 1 2.50% 8.00% 0.10% 10.60% 2 2.50% 7.00% 0.20% 9.70% 3 2.50% 6.00% 0.30% 8.80% 4 2.50% […]

Chapter 5 CFIN6 Chapter 5 Solutions 5-1 1,000($29–$28)+1,000(4 0.10) $1.40 Return= = =0.05=5.0% 1,000($28) $28  5-2 40($9–$10)+40(0.50) –$0.50 Return= = =-0.05=-5.0% 40($10) $10 5-3 ($44–$42)+2(0.05) $2.10 Return= = =0.05=5.0% $42 $42 5-4 $156–$150+0 $6 Return= = =0.04=4.0% $150 $150 […]

e. Suppose that James just bought the same bond that Joan bought, but he bought it two years later for $1,034.55. If James plans to hold his bond for five years and its YTM does not change during that a. […]

Chapter 6 CFIN6 Chapter 6 Solutions 6-1 $1,000 Minimum $40 stock price 25 == b. $1,000 Minimum $25 stock price 40 == ; As long as the stock is selling for greater than $25 per share, it is worthwhile to […]

CFIN6 Spreadsheet Problem Solution Chapter 6 a. & b. INPUT DATA: KEY OUTPUTS: Years remaining to maturity 17 Current price (P0) $847.63 Coupon rate of interest 9% Capital gains yield this year 0.39% Interest payments per year 2 Current yield […]

it is generally set at the value of r on the day the bond is issued. To illustrate, the required rate of return on one of Tampa Electric’s bonds was 8% when they were issued, so the coupon rate was […]

C06 Chapter 6 Spreadsheet Problem Solutions (C06) PARTS a – c INPUT DATA: KEY OUTPUTS: 18 $1,584.48 10% Capital gains yield this year -1.31% 1Current yield this year 6.31% MODEL-GENERATED DATA: Years to Maturity Beginning of Year Value ($) End […]

Chapter 7 CFIN6 Chapter 7 Solutions 7-1 Total dollar return per share = ($19 – $20) + 4($0.20) = -$0.20 a. ($19 – $20)+ $0.80 -$0.20 Rate of = 0.01 1.0% return $20 $20 = = − = − b. […]

following two years (a total of three years). After the $2.50 dividend is paid at the end of Year 3 (i.e., beginning in Year 4), the company expects the dividend to grow at a 3 percent rate, and this growth […]

CFIN6 Spreadsheet Problem Solution Chapter 7 1. INPUT DATA: KEY OUTPUTS: Nonconstant growth 0.00% Current price (P0) $21.60 Normal (constant) growth 3.00% Price at the end of Year 3 $23.41 Req. rate of return 14.00% Dividend yield in Year 1 […]

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. stockholders cannot force bankruptcy when dividends are not paid. Preferred stockholders generally do not […]

C07 Chapter 7 Spreadsheet Problem Solutions (C07) INPUT DATA: KEY OUTPUTS: Nonconstant growth 25.00% Current price (P0)$29.57 3 2.44 3 1.79 4 3.05 4 2.01 5 5 Total return both yrs 11.00% MODEL-GENERATED DATA: Expected dividends: PV of dividends: Year […]

CFIN6 Chapter 8 Spreadsheet Problem Risk and Rates of Return Use the model in File C08 to work the problem. Stock A and Stock B produced the following returns during the past five years (Year -1 is one year ago, […]

CFIN6 Spreadsheet Problem Solution Chapter 8 1. a. – d. INPUT DATA: KEY OUTPUT: Year Stock A Stock B Stock C Portfolio -1 –18.00% –14.50% –16.25% -2 33.00% 21.80% 27.40% -3 15.00% 30.50% 22.75% -4 –0.50% –7.60% –4.05% -5 27.00% […]

5Chapter 8 CFIN6 Chapter 8 Solutions 8-1 a. r ˆ b. 2 2 2 = (0.2)(19 – 10.5 + (0.7)(9 – 10.5 + (0.1)(4 – 10.5 20.25 4.5% ) ) )  = = c. 4.5% = = 0.429 CV […]

© 2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. b. The expected rate of return, r ˆ , is expressed as follows: n […]

C08 Chapter 8 Spreadsheet Problem Solutions (C08) GRAPH at the bottom of this spreadsheet. To return to this worksheet, click on the worksheet labeled C08 at the bottom of the GRAPH worksheet. 1. There are a number of instructions with […]

general level of interest rates. This is called the project’s required rate of return, or cost of capital, in capital budgeting. (4) Find (a) the PV of the expected cash flows and/or (b) the asset’s actual rate of return. © […]

Chapter 9 CFIN6 Chapter 9 Solutions 9-1  Calculator solution: N = 6, I/Y = 10, PMT = 36,950, FV = 0; PV = ? = -160,926.88 6 1 1(1.10) Value PV of CFs 36,950 36,950(4.355261) 160,926.88 0.10  − […]

2 11,000 15,000 3 20,000 15,000 4 30,000 15,000 5 45,000 15,000 c. If the required rate of return for each project is 13 percent, which project should West Coast select? If the required rate of return is 9 percent, […]

C09 Chapter 9 Spreadsheet Problem Solutions (C09) the correct IRR for most capital budgeting problems encountered. However in some cases, the cash flow pattern may be such that Excel will not be able to solve for the IRR and the […]