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1) according to the mckinsey study the percentage of merger synergies that meet
incremental revenue expectations.
a.less than 25%
b.25-50%
c.50-75%
d.more than 75%
2) which country has been the largest recipient of vc financing as a percentage of gdp?
a.china
b.australia
c.south africa
d.israel
3) which of the following statements is false?
a.a firm should set its growth target equal to its sustainable growth rate
b.generating a higher profit margin provides fuel for a higher sustainable growth rate,
holding everything else equal
c.the sustainable growth concept can highlight tensions associated with "competing"
objectives within the firm
d.the primary advantage of the sustainable growth model is its simplicity
4) which of the following would affect the premium of a call option?
a.interest rates
b.dividend yield
c.stock price volatility
d.all of the above
5) you find that the yield on a 4-year bond is 10% while that of a 2-year bond is 8%.
what should be the yield on a 2-year bond beginning two years from now as predicted
by the expectations theory?
a.2.00%
b.12.04%
c.25.25%
d.none of the above
6) roxy international recently conducted an ipo, roxyr eceived $32 per share and the
offer price was $34 per share and the stock price rose to $35 per share. what was the
total percentage cost of the ipo?
a.3.13%
b.8.82%
c.2.94%
d.9.38%
7) narrbegin: exhibit 6-2
exhibit 6-2
you purchased a bond last year that pays an 8% annual coupon with a face value of
$1,000. at the time of purchase, the bond had a yield to maturity of 10% and had 10
years until maturity. today, the bond trades at a yield to maturity of 9%.
narrend
refer to exhibit 6-2. what was the percentage return of this investment over the last
year?
a.8.00%
b.9.00%
c.15.21%
d.16.30%
8) examples of contractual covenants used to help control agency problems between
venture capitalists (vc) and investors include:
a.limiting the vcs ability to establish new funds without granting existing investors
equal access
b.mandating that existing investors be included in any equity sale contracts the vc
negotiates
c.restricting the vcs freedom to invest in foreign and in publicly traded securities
d.all of the above
e.(a) and (c) only
9) what is considered a primary market transaction?
a.corporations sell securities to investors in exchange for cash
b.investor a buys stock from investor b
c.a company declares a dividend
d.a company makes a bank deposit
10) al bert seeks $15 million from a vc fund. al and the vc agree that the company
should be ready to go public in 6 years. at that time the company should have a market
capitalization of $161.1 million. if the vc requires a 45% return on their investment,
what is the vcs stake at the time of the ipo?
a.$139.41 million
b.$21.75 million
c.$112.67 million
d.$156.23 million
11) the type of risk primarily concerned with converting revenues and costs
denominated in foreign currencies into a firms domestic currency is
a.economic exposure
b.transaction exposure
c.translation exposure
d.none of the above
12) narrbegin: exhibit 7-4
exhibit 7-4
narrend
given exhibit 7-4, what is the weight of security 1?
a.25%
b.35%
c.45%
d.55%
13) wuzzy, inc. is evaluating the acquisition of a new car for deliveries. automobile
leases are
a.typically operating leases
b.typically financial (capital) leases
c.either operating or financial, depending on the firm
d.not covered by these categories
