Archives: Quiz

1) a zero coupon bond has a yield to maturity of 5%; what is the bonds taxable capital gain in last year of the bonds existence? a.$ 47.61 b.$ 1,000.00 c.$ 0.00 d.$ 45.26 2) roxy botanicals forecasts the following […]

1) narrbegin: bavarian credit terms bavarian brew credit terms bavarian brew is producing and selling brewery equipment to microbreweries nationwide. bavarian is charging $15,000 per unit and all of their sales are on credit. under the current credit policy bavarian […]

1) which of the following statements is true? a.accountants measure cash flows on a cash basis rather than an accrual basis b.financial analysts focus solely on accrual basis values rather than cash flows when evaluating potential investments c.incremental cash flows […]

1) narrbegin: needsalift aprs needsalift, inc. aprs needsalift, inc. has $10 million in funds to distribute to its unsecured creditors. two sets of possible claims are presented below. narrend for case ii, what settlement will the accounts payable holders receive? […]

1) a firms dividend policy refers to all of the following except to its choice of a.whether to pay shareholders a cash dividend b.how large the cash dividend should be c.how frequently a cash dividend should be distributed d.who should […]

1) what type of corporation allows shareholders to be taxed as partners while retaining their limited liability status? a.j corporation b.llp corporation c.s corporation d.series 6 corporation 2) a firm that tends to finance permanent assets with long-term debt and […]

1) kimball johnson has just purchased a put option on reut corporation which currently trades at $58 per share. the put option has a strike price of $50, 6 months until expiration, and trades at a premium of $3. what […]

1) the fico score: a.was developed by fair isaac & company b.is based on a person’s income and overall indebtedness, the type of debt outstanding and the monthly payment amounts c.can have a large impact on the interest rate a […]

1) narrbegin: bavarian brew eps bavarian brew eps bavarian brew, an unlevered firm, has a perpetual ebit of $500,000. the required return on assets for the firms assets is 10%. the company has 250,000 shares outstanding, trading at $20 per […]

1) the amount of time that it takes for a check to clear through the banking system is called a.mail float b.processing float c.clearing float d.delivery float 2) emma bonds have 14 years to maturity, with a coupon rate of […]

1) what is the market capitalization of a company? a.the market value of all outstanding debt b.the book value of the companys debt c.the market value of all outstanding shares d.the book value of the companys total equity 2) narrbegin: […]

1) which type of bond has the highest daily trading volume in our economy? a.treasury bonds b.agency bonds c.corporate bonds d.municipal bonds 2) if a company strictly adheres to a constant payout ratio policy, its dividend amount will a.remain constant […]

1) which type of venture capital fund has the ability to borrow from the u.s. treasury? a.financial venture capital funds b.corporate venture capital funds c.small business investment companies d.venture capital limited partnerships 2) which of the following is not a […]

1) what is the present value of an operating lease that involves payments of $25,000 per year (the end of the year) for 10 years with no possibility of purchase at the end of the lease term. assume that the […]

1) narrbegin: efn 1 narrend if smith pays out 75% of net income as dividends and sales are expected to grow by 25%, what are the external funds required? a.$133.06 b.$66.88 c.$121.88 d.$225.58 2) if company x intends to distribute […]

1) narrbegin: bavarian credit terms bavarian brew credit terms bavarian brew is producing and selling brewery equipment to microbreweries nationwide. bavarian is charging $15,000 per unit and all of their sales are on credit. under the current credit policy bavarian […]

1) what recent act has attempted to reduce the possibility of more accounting scandals in our economy? a.tax relief act of 2003 b.internal accounting standards act of 2002 c.mccain-feingold act of 2003 d.sarbanes-oxley act of 2002 2) narrbegin: gamma electronics […]

1) what is the money market yield for a one-year treasury bill that is priced at a 4% discount? a.3.83% b.4% c.4.17% d.4.22% 2) capital budgeting: a.is the area in which managers have the greatest scope to create (or destroy) […]

1) when evaluating a potential capital budgeting decision, fixed asset expenditures a.should be ignored b.often appear as the initial cash outflow for a project c.can be significantly increased due to the costs of installing the equipment d.all of the above […]

1) what percentage of publically held firms in the u.s after experiencing financial distress delist? a.100% b.57% c.19% d.24% 2) roxy is buying a house and the mortgage terms are 30 years, monthly payments. if the interest rate is 7% […]

1) big deal, inc. wants to grow 30% next year. if it maintains its 40% dividend payout ratio, liabilities to equity ratio of 1, and total asset turnover of 2, what must its profit margin be to achieve this growth? […]

1) a voluntary reorganization of debts whereby a firms debt obligations are reorganized according to a creditors pro-rata share of the debting firms total debt, is called a.a composition b.an extension c.creditor control d.none of the above 2) narrbegin: exhibit […]

1) which of the following statements is true? a.generally the ipo market collectively raises about half as much external capital as very large corporations in the u.s b.ipos generally represent less than 10% of all new common equity raised yearly […]

1) financial leverage: a.results when a firm finances a portion of its assets with debt b.can enhance a firm’s earnings if sales increase c.can impact the beta of the firm’s stock d.all of the above e.only (a) and (b) are […]

1) the exim company has entered into a 3 month, $250 million notional principal forward rate agreement (fra) with what-a-bank. the terms are such that exim will pay what-a-bank if libor is above 2%, but what-a-bank will pay exim if […]

1) a bond issued by an international borrower and sold to investors in countries with currencies other than the currency in which the bond is denominated is called a.a eurobond b.an alien bond c.a cross-currency bond d.none of the above […]

1) today, the price of an october oil futures contract closed at $49.50 per barrel. yesterday, the contract closed at $50. when margin accounts are marked to market, a.long positions will have $0.75 per barrel added b.long positions will have […]

1) if the board of directors of a target seeks an alternative, friendly, acquirer, then it is said to be using which takeover defense? a.just say no b.standstill c.white squire d.white knight 2) the risk that a firms value will […]

1) the transformation of a public corporation into a private company by the employees of the corporation itself is called a(n) a.management buyout b.employee stock ownership plan c.reverse lbo d.reverse merger 2) the chief difference(s) between european and american venture […]

1) bavarian sausage is expected to pay a $1.57 dividend next year and investors expect that dividend to grow by 5% each year forever. if the required return on the stock investment is 14%, what should be the price of […]

1) narrbegin: dsss corporation dsss corporation dsss corporation is considering a new project to manufacture widgets. the cost of the manufacturing equipment is $125,000. the cost of shipping and installation is an additional $10,000. the asset will fall into the […]

1) bill henricksen, purchased a put option on cycle inc. for $4. the put option has a strike price of $40 and currently cycle inc. shares trade for $44. the expiration date of the option is 6 months from today. […]

1) which type of institution is in a unique position to bear exchange rate risk by creating a natural hedge? a.national banks b.multinational corporations c.large corporations d.international banks 2) the irr is analogous to: a.a bonds current yield b.a stocks […]

1) a contractual clause that requires a borrower to pay taxes and other liabilities when due is an example of a a.positive covenant b.negative covenant c.lien d.term loan 2) if you were to invest $120 for two years, while earning […]

1) backward integration is a type of a.horizontal merger b.vertical merger c.market power merger d.none of the above 2) roxy international needs $200 million in new equity capital; currently shares are trading at $50 per share. morgan steely (the investment […]

1) harder points one has just paid a dividend of $1.50, has a required return of 17% and a current stock price of $50.65. what is the expected growth rate? a.13.63% b.14.04% c.14.44% d.cannot be determined 2) a firm has […]

1) narrbegin: bavarian merger bavarian merger bavarian brew is planning on acquiring bavarian sausage in a pure exchange merger. bavarian brews stock is currently trading at $35 and they set the exchange ratio at 0.80. bavarian sausage has 75 million […]

1) narrbegin: stock returns narrend what is the average return of a portfolio that has 30% invested in stock a, 30% invested in stock b and 40% invested in stock c? a.9.92% b.12.6% c.7.59% d.13.8% 2) what was the key […]

1) suppose you bought 10 smith enterprise put options with a strike price of $52 at $2.75 per option. if the price of smith stock is $56, what is your net profit (or loss)? ignore transaction costs. a.$40 b.$0 c.-$27.50 […]

1) monte corporation just paid a dividend of $4.25 and has an expected growth rate of 15% for the foreseeable future, if the discount rate is 18% what is the appropriate stock price today? a.$141.67 b.$162.92 c.$162.74 d.$146.07 2) narrbegin: […]

1) narrbegin: big diesel incorporated big diesel incorporated consider the following historical returns for big diesel incorporated: yearreturn 19995% 20009% 2001-8% 20025% 200320% narrend refer to big diesel incorporated. what is the standard deviation of the returns over the five […]

1) emma bonds will mature in 8 years, the coupon rate of the bond is 6% paid semiannually, if bonds currently sell for $820 what is the bonds yield to maturity? a.9.23% b.6.00% c.4.61% d.3.00% 2) you found your dream […]

1) narrbegin: running shoes, inc. running shoes, inc. running shoes, inc. has 2 million shares of stock outstanding. the stock currently sells for $12.50 per share. the firms debt is publicly traded and was recently quoted at 90% of face […]

1) bavarian sausage just issued a 10-year 12% coupon bond. the face value of the bond is $1,000 and the bond makes annual coupon payments. if the bond is trading at $967.25, what is the bonds yield to maturity? a.12.00% […]

1) in which situation below would a lock-box system likely produce greater benefits? a.when interest rates are very low b.when interest rates are very high c.when the firms customers are concentrated locally d.when the firm collects with ach transfers 2) […]

1) narrbegin: millers drugstore millers drugstore millers drugstore has an ebit of $15,000, debt with a market value of $25,000 and a required return on assets of 12%. narrend assuming a corporate tax rate of 35%, what is millers drugstores […]

1) narrbegin: coyote valley coyote valley products coyote valley products has daily cash collections of $500,000. the cash management staff has determined (1) customers payments are in the mail an average of 3 days; (2) processing after receipt averages 1 […]

1) which of the following characteristics would disqualify a firm from being an s corporation? a.a firm with 51 different individual shareholders b.the controlling majority shareholder is a fortune 500 corporation c.one of the shareholders of the proposed s corporation […]

1) what is a key provision regarding ceos in the sarbanes-oxley act of 2002? a.ceos cannot hold options in the firms they direct b.ceos total compensation cannot exceed a limit set by the sec c.ceos are personally liable for any […]

1) narrbegin: panama city panama city beach company panama city beach company needs to raise $60 million of new equity capital. its common stock is currently selling for $70 per share. the investment bankers require an underwriting spread of 5 […]