Beginning in 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act
requires corporations with a market value over ________ to allow a nonbinding
shareholder vote on executive pay.
A. $25,000,000
B. $50,000,000
C. $75,000,000
D. $100,000
E. $750,000
Tanner Tavern writes four checks a day for an average amount of $5,400 each. These
checks generally clear the bank four days after they are written. In addition, the firm
generally receives and deposits checks amounting to $18,700 each day. All deposits are
available on the next day. What is the firms net float?
A. Net collection float of $13,200
B. Net collection float of $18,700
C. Net collection float of $22,300
D. Net disbursement float of $67,700
E. Net disbursement float of $86,400
Taylors, Inc. stock has plummeted in value and is currently priced at $4 a share. The
exchange on which the stock trades requires that the minimum stock price be $10 a
share. Taylors has decided to do a reverse stock split to avoid delisting. However, when
it does this, the firm wants the stock price increased to at least twice the minimum
exchange required price. Which one of the following stock split ratios is most
appropriate for this situation?
A. 1-for-3
B. 1-for-5
C. 2-for-9
D. 3-for-1
E. 5-for-1
Which one of the following dates is the date on which the board of directors votes to
pay a dividend?
A. Record date
B. Declaration date
C. Ex-dividend date
D. Payment date
E. Settlement date
The aftertax cost of which of the following is affected by a change in a firms tax rate?I.
Preferred stockII. DebtIII. EquityIV. Capital
A. I and III only
B. II and IV only
C. I, II, and IV only
D. II, III, and IV only
E. I, II, III, and IV
Which one of the following statements concerning annuities is correct?
A. The present value of an annuity is equal to the cash flow amount divided by the
discount rate.
B. An annuity due has payments that occur at the beginning of each time period.
C. The future value of an annuity decreases as the interest rate increases.
D. If unspecified, you should assume an annuity is an annuity due.
E. An annuity is an unending stream of equal payments occurring at equal intervals of
time.
Downtown Merchants has paid a quarterly dividend of $0.60 per share for the past two
years. This quarter, the firm plans to pay $0.60 plus an additional $0.05. The firm has
stated that it uncertain whether it will pay $0.60 or $0.65 per share next quarter. Which
one of the following is the best description of the additional $0.05 that is being paid this
quarter?
A. Liquidating dividend
B. Special dividend
C. Extra dividend
D. Stock dividend
E. Normal dividend
The Corner Market has decided to expand its retail store by building on a vacant lot it
currently owns. This lot was purchased four years ago at a cost of $299,000, which the
firm paid in cash. To date, the firm has spent another $38,000 on land improvements, all
of which was also paid in cash. Today, the lot has a market value of $329,000. What
value should be included in the analysis of the expansion project for the cost of the
land?
A. The sum of the cash paid to date for both the lot and the improvements
B. The original purchase price only
C. The current market value of the land plus the cash paid for the improvements
D. The current market value of the land
E. Zero because the land and the improvements were purchased with cash
A $1,000 face value bond is currently quoted at 101.2. The bond pays semiannual
payments of $28.50 each and matures in six years. What is the coupon rate?
A. 2.72 percent
B. 2.85 percent
C. 5.00 percent
D. 5.63 percent
E. 5.70 percent
Which one of the following is an ordinary annuity, but not a perpetuity?
A. $75 paid at the beginning of each monthly period for 50 years
B. $15 paid at the end of each monthly period for an infinite period of time
C. $40 paid quarterly for 5 years, starting today
D. $50 paid every year for ten years, starting today
E. $25 paid weekly for 1 year, starting one week from today