Which one of the following forms of business organization offers liability protection to
some of its owners but not to all of its owners?
A. Sole proprietorship
B. General partnership
C. Limited partnership
D. Limited liability company
E. Corporation
Charliess writes 135 checks a day for an average amount of $480 each. These checks
generally clear the bank in 3 days. In addition, the firm generally receives an average of
$159,000 a day in checks that are deposited immediately. Deposited funds are available
in 1.5 days. What is the firms net float?
A. Net disbursement float of $94,200
B. Net disbursement float of $44,100
C. Net disbursement float of $34,750
D. Net collection float of $44,100
E. Net collection float of $94,200
Cox Footwear pays a constant annual dividend. Last year, the dividend yield was 2.5
percent when the stock was selling for $26 a share. What is the current price of the
stock if the current dividend yield is 3.1 percent?
A. $18.92
B. $20.97
C. $25.20
D. $26.87
E. $27.40
At the end of this month, Les will start saving $150 a month for retirement through his
companys retirement plan. His employer will contribute an additional $0.50 for every
$1.00 that he saves. If he is employed by this firm for 30 more years and earns an
average of 10.5 percent on his retirement savings, how much will Les have in his
retirement account 30 years from now?
A. $389,406.19
B. $401,005.25
C. $540,311.67
D. $566,190.22
E. $603,289.01
The Monster Truck operates several specialty vehicles that provide hot food and
beverages for firms that have workers employed in outlying regions. The company has
annual sales of $350,500. Cost of goods sold average 48 percent of sales and the profit
margin is 5.2 percent. The average accounts receivable balance is $44,700. On average,
how long does it take The Hot Truck to collect payment for its services?
A. 7.84 days
B. 24.17 days
C. 46.55 days
D. 48.33 days
E. 51.90 days
The Dairy Delight wants to raise $1.0 million by selling some coupon bonds at par.
Comparable bonds in the market have a 6.5 percent annual coupon, 15 years to
maturity, and are selling at 98 percent of par. What coupon rate should The Dairy
Delight set on its bonds?
A. 6.25 percent
B. 6.48 percent
C. 6.50 percent
D. 6.67 percent
E. 6.72 percent
Which one of the following terms applies to a junk bond that was originally issued with
a bond rating of AA?
A. Debenture
B. Covenant
C. Fallen angel
D. Sinking
E. Triple B
Sue needs to invest $3,626 today in order for her savings account to be worth $5,000
six years from now. Which one of the following terms refers to the $3,626?
A. Present value
B. Compound value
C. Future value
D. Complex value
E. Factor value
You are analyzing a project and have developed the following estimates. The
depreciation is $3,200 a year and the tax rate is 34 percent. What is the best-case
operating cash flow?
A. $13,473
B. $14,196
C. $15,280
D. $16,701
E. $17,423
Today, you are purchasing a 20-year, 6 percent annuity at a cost of $120,000. The
annuity will pay annual payments starting 1 year from today. What is the amount of
each payment?
A. $9,511.08
B. $10,462.15
C. $10,754.40
D. $11,013.20
E. $12,208.19
A DMM is a(n):
A. employee who executes orders to buy and sell for clients of his or her brokerage
firm.
B. individual who trades on the floor of an exchange for his or her personal account.
C. NYSE member who functions as a dealer for a limited number of securities.
D. broker who buys and sells securities from a market maker.
E. trader who deals only with primary offerings.
A bond has a yield to maturity of 9.38 percent, a 7.5 percent annual coupon, a $1,000
face value, and a maturity date 21 years from today. What is the current yield?
A. 7.91 percent
B. 8.47 percent
C. 9.04 percent
D. 9.38 percent
E. 9.46 percent
LOG, Inc. currently has 300,000 shares of stock outstanding that sell for $73 per share.
Assuming no market imperfections or tax effects exist, what will the share price be after
LOG has a 5-for-3 stock split?
A. $43.80
B. $45.60
C. $73.00
D. $109.18
E. $121.67