Archives: Quiz
Banking Chapter 18 Given that Rose issues new debt of $50 million initially to fund the acquisition
15) Given that Rose issues new debt of $50 million initially to fund the acquisition, the total value of this acquisition using the APV method is closest to: A) $100 million B) $120 million C) $124 million D) $115 million […]
Banking Chapter 18 Which of the following is NOT one of the simplifying assumptions made for the
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 18 Capital Budgeting and Valuation with Leverage 18.1 Overview of Key Concepts 1) Which of the following is NOT one of the simplifying assumptions made for the three main methods of […]
Banking Chapter 17 Managers Are Much Less Committed Dividend Payments Than Share Repurchases Share Repurchases
21) The NPV of Iota’s expansion project is closest to: A) -$110 million B) -$137.5 million C) $0 D) $75 million Answer: A Explanation: A) NPV = -200 + = -$110 million Diff: 2 Section: 17.5 Payout Versus Retention of […]
Banking Chapter 17 Payout Versus Retention Cash Skill Analytical Net Ordinary Income Taxes The Amount
12) Consider the following equation: Pcum – Pex = Div × The term τd is: A) the price per share after a dividend is paid. B) the price per share before a dividend is paid. C) the personal tax rate […]
Banking Chapter 17 Omicrons Cumdividend Price Closest Answer Explanation Enterprise Value Pvfuture Fcf Million Market
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 17 Payout Policy 17.1 Distributions to Shareholders 1) The date on which the board authorizes the dividend is the: A) declaration date. B) distribution date. C) record date. D) ex-dividend date. […]
Banking Chapter 16 Rearden Has Million Debt Due One Year Then The Expected Value Reardens
Use the information for the question(s) below. You own your own firm and you need to raise $50 million to fund an expansion. Following the expansion, your firm will be worth $75 million in its unlevered form. You want to […]
Banking Chapter 16 When Firm Faces Financial Distress May Choose Not Finance New Positivenpv Projects
Use the information for the question(s) below. Big Blue Banana (BBB) is a clothing retailer with a current share price of $10.00 and with 25 million shares outstanding. Suppose that Big Blue Banana announces plans to lower its corporate taxes […]
Banking Chapter 16 The Costs Bankruptcy And Financial Distress Skill Conceptual Which
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 16 Financial Distress, Managerial Incentives, and Information 16.1 Default and Bankruptcy in a Perfect Market 1) Which of the following statements is FALSE? A) Equity holders expect to receive dividends and […]
Banking Chapter 15 Personal Taxes Skill Conceptual Which The Following Statements False Unlike
3) Assume that investors hold Google stock in retirement accounts that are free from personal taxes. If Google were to issue sufficient debt to reduce its taxes by $1 billion per year permanently, then the value that would be created […]
Banking Chapter 15 Flagstaff Enterprises expected to have free cash flow in the coming year
22) If Flagstaff currently maintains a .5 debt to equity ratio, then Flagstaff’s after-tax WACC is closest to: A) 10.00% B) 10.25% C) 9.50% D) 8.75% Answer: B Explanation: B) rwacc = rE + rD (1 – τc) rwacc = […]
Banking Chapter 15 Expense Section The Interest Tax Deduction
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 15 Debt and Taxes 15.1 The Interest Tax Deduction 1) Which of the following statements is FALSE? A) In general, the gain to investors from the tax deductibility of interest payments […]
Banking Chapter 14 Ebit Interest Expense Taxes Million Million Million Available Shareholders Eps Nishares Outstanding
23) Based upon the three comparable firms, what asset beta would you recommend using for your firm’s new project? Answer: Firm Name Equity Beta Debt Beta Debt to Equity Ratio Percent Equity Percent Debt Unlevered Beta Lincoln 1.25 0 0.25 […]
Banking Chapter 14 Levered Equity Unlevered Equity Pvequity Cash Flows Weak Economy Unlevered Debt Levered
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 14 Capital Structure in a Perfect Market 14.1 Equity Versus Debt Financing Use the following information to answer the question(s) below. Nielson Motors (NM) has no debt. Its assets will be […]
Banking Chapter 14 Diff Section Modiglianimiller Leverage Risk And The Cost Capital Skill Analytical Galts
Use the information for the question(s) below. Consider two firms: firm Without has no debt, and firm With has debt of $10,000 on which it pays interest of 5% per year. Both companies have identical projects that generate free cash […]
Banking Chapter 13 Npv Investment Opportunities The True Market Portfolio Contains Much More Than Just
10) Portfolio “C”: A) is less risky than the market portfolio. B) has a relatively lower expected return than predicted. C) is underpriced. D) has a negative alpha. Answer: A Diff: 2 Section: 13.6 Style-Based Techniques and the Market Efficiency […]
Banking Chapter 13 January Suppose That Currently The End March Which Stocks Are You Most
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 13 Investor Behavior and Capital Market Efficiency 13.1 Competition and Capital Markets Use the following information to answer the question(s) below. Assume that the CAPM is a good description of stock […]
Banking Chapter 12 Exploration Division Rrf Rrf Oil Refining Rrf Rrf Convenience Store Rrf Rrf
11) Your firm is planning to invest in a new power generation system. Galt Industries is an all equity firm that specializes in this business. Suppose Galt’s equity beta is 0.75, the risk-free rate is 3%, and the market risk […]
Banking Chapter 12 Section Beta Estimation Skill Conceptual The Debt Cost Capital
7) Using the average historical excess returns for both Wyatt Oil and the Market portfolio, your estimate of Wyatt Oil’s Beta is closest to: A) 0.75 B) 0.84 C) 1.00 D) 1.19 Answer: B Explanation: B) excess returnaverage = excess […]
Banking Chapter 12 Buy Approximately Shares Taggart Transcontinental Sell Approximately Shares Rearden Metal Sell Approximately
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 12 Estimating the Cost of Capital 12.1 The Equity Cost of Capital Use the following information to answer the question(s) below. Beta Volatility “Eenie” 0.45 20% “Meenie” 0.75 18% “Miney” 1.05 […]
Banking Chapter 11 Between Stocks Expected Return And Its Required Return According
16) Assuming that Tom wants to maintain the current expected return on his portfolio, then the amount that Tom should invest in the market portfolio to minimize his volatility is closest to: A) 100% B) 90% C) 125% D) 110% […]
Banking Chapter 11 When The Capm Assumptions Hold Choosing Optimal Portfolio Relatively Straightforward The Combination
9) Will adding the precious metals fund improve your portfolio? Answer: Yes = = = -0.3 ri = rf + × (E[Rp] – rf) = .04 + (-0.3)(.14 – .04) = .01 < .10 (the expected return on metals fund) […]
Banking Chapter 11 Short Sale Transaction Which You Sell Stock That You Not
21) Calculate the variance on a portfolio that is made up of equal investments in Stock Y and Stock Z stock. Answer: Year End Stock Y Realized Return Stock Z Realized Return Stock Y Deviation (RH – RH) Stock Z […]
Banking Chapter 11 Stock Weight Return Abt Low Bll Value Portfolio Value Bll
1 Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 11 Optimal Portfolio Choice and the Capital Asset Pricing Model 11.1 The Expected Return of a Portfolio 1) Which of the following statements is FALSE? A) Without trading, the portfolio […]
Banking Chapter 10 Sampp Efficient Then Changes The Value The Market Portfolio Represent Unsystematic Shocks
10.7 Measuring Systematic Risk Use the following information to answer the question(s) below. Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%. Security “X” goes up on average by 29% when the market […]
Banking Chapter 10 Common Versus Independent Risk Skill Definition Use The Following
25) Using the data provided in the table, calculate the average annual return, the variance of the annual returns, and the standard deviation of the average returns for the market from 2000 to 2009. Answer: Rannual = = = 10.93% […]
Banking Chapter 10 Common Measures Risk And Return Skill Analytical Suppose Investment Equally
1 Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 10 Capital Markets and the Pricing of Risk 10.1 Risk and Return: Insights from 89 Years of Investor History 1) Which of the following investments offered the lowest overall return […]
Banking Chapter 9 Enterprise Value Free Cash Flow Enterprise Value Ebitda Enterprise Value Ebit Price
Use the following information to answer the question(s) below. Company Ticker Price per Share Earnings per Share Book Value per Share Abbott Labs ABT 54.35 3.69 13.79 Bristol-Myers-Squibb BMY 25.45 1.93 7.33 GlaxoSmithKline GSK 41.3 3.15 6.03 Johnson & Johnson […]
Banking Chapter 9 Rufus Equity Cost Capital And Rufus Earnings Are Expected Grow Rate Per
8) Which of the following statements is FALSE? A) The firm’s weighted average cost of capital (WACC) denoted rwacc is the cost of capital that reflects the risk of the overall business, which is the combined risk of the firm’s […]
Banking Chapter 9 Two Steps Step Solve For Divp Step Solve For New
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 9 Valuing Stocks 9.1 The Dividend-Discount Model 1) Which of the following is NOT a way that a firm can increase its dividend? A) By increasing its retention rate B) By […]
Banking Chapter 8 Free Cash Flow Skill Analytical Use The Following Information Answer The Questions
11) If the Krusty Krab’s opportunity cost of capital is 12%, then the IRR for upgrading to the new grill is closest to: A) 3.25% B) 16.00% C) 18.25% D) 21.00% Answer: C Explanation: C) CF0 = -80,000 + 30,000 […]
Banking Chapter 8 Sales Are Estimated Grow Per Year Each Year Through Year Three The
24) The depreciation tax shield for the Shepard Industries project in year two is closest to: A) $84 B) $196 C) $72 D) $96 Answer: A Explanation: A) $280 × .30 = $84 Diff: 1 Section: 8.2 Determining Free Cash […]
Banking Chapter 8 Sunk Costs Have Been Will Paid Regardless The Decision Whether Not Proceed
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 8 Fundamentals of Capital Budgeting 8.1 Forecasting Earnings 1) Which of the following statements is FALSE? A) A capital budget lists the projects and investments that a company plans to undertake […]
Banking Chapter 7 Project Answer Explanation Profitability Project Investment Npv Index Rank
7.5 Project Selection with Resource Restraints 1) Which of the following statements is FALSE? A) If there is a fixed supply of a resource available, you should rank projects by the profitability index, selecting the project with the lowest profitability […]
Banking Chapter 7 The Payback Rule Skill Analytical The Payback Period For Project
22) The internal rate of return rule can result in the wrong decision if the projects being compared have: A) differences in scale. B) differences in timing. C) differences in NPV. D) A and B are correct. Answer: D Diff: […]
Banking Chapter 7 Sarah Palin reportedly was paid a $11 million advance to write her book Going Rogue
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 7 Investment Decision Rules 7.1 NPV and Stand-Alone Projects 1) Which of the following statements is FALSE? A) About 75% of firms surveyed used the NPV rule for making investment decisions. […]
Banking Chapter 6 The Following Table Summarizes The Ytm For Similar Tenyear Corporate Bonds Various
Use the following information to answer the question(s) below. Security Term (years) Yield (%) Treasury 20 5.5% AAA Corporate 20 7.0% BBB Corporate 20 8.0% B Corporate 20 9.6% 8) The credit spread on AAA-rated corporate bonds is: A) 1.0% […]
Banking Chapter 6 False The Yield Maturity Coupon Bond Weighted Average The Yields The Zerocoupon
25) Which of the four bonds is the least sensitive to a one percent increase in the YTM? A) Bond A B) Bond B C) Bond C D) Bond D Answer: A Explanation: A) Bond Years to maturity Coupon YTM […]
Banking Chapter 6 How Much Will Each Semiannual Coupon Payment Answer Explanation Coupon Coupon Rate
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 6 Valuing Bonds 6.1 Bond Cash Flows, Prices, and Yields 1) Which of the following statements is FALSE? A) Bonds are a securities sold by governments and corporations to raise money […]
Banking Chapter 5 Explanation Nominal Inflation Real Diff Section The Determinants Interest Rates Skill Analytical
3) The total amount of interest that Dagny will pay during the first month of her mortgage is closest to: A) $1110 B) $1785 C) $1800 D) $2245 Answer: C Explanation: C) PMT = = 2246.12 First Month’s Interest = […]
Banking Chapter 5 Given That His Account Offered Monthly Compounding Interest The Apr This Account
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 5 Interest Rates 5.1 Interest Rate Quotes and Adjustments 1) Which of the following statements is FALSE? A) Because interest rates may be quoted for different time intervals, it is often […]
Banking Chapter 4 The British government has a consol bond outstanding that pays
9) The British government has a consol bond outstanding that pays ₤100 in interest each year. Assuming that the current interest rate in Great Britain is 5% and that you will receive your first interest payment one year from now, […]
Banking Chapter 4 Timelines are an important first step in organizing and then solving a financial problem
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 4 The Time Value of Money 4.1 The Timeline Use the figure for the question(s) below. 1) Which of the following statements regarding timelines is FALSE? A) Timelines are an important […]
Banking Chapter 3 Suppose The Riskfree Rate Interest Without Issuing The New Security The Npv
3.4 Arbitrage and the Law of One Price 1) Which of the following statements regarding arbitrage is the most correct? A) Any situation in which it is possible to make a profit without taking any risk is known as an […]
Banking Chapter 3 Money Skill Analytical Suppose You Have Today And The Riskfree Rate Interest
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 3 Financial Decision Making and the Law of One Price 3.1 Valuing Decisions 1) Due to a pre-existing contract, Recycle America Inc. has the opportunity to acquire 10,000 pounds of scrap […]
Banking Chapter 2 Operating Income Other Income Earnings Before Interest And Taxes Ebit Interest Income
2.6 Financial Statement Analysis Use the information for the question(s) below. In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million […]
Banking Chapter 2 Introduction to Financial Statement Analysis
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 2 Introduction to Financial Statement Analysis 2.1 Firms’ Disclosure of Financial Information 1) U.S. public companies are required to file their annual financial statements with the U.S. Securities and Exchange Commission […]
Banking Chapter 1 The Effective Tax Rate Your Share The Corporations Earnings Closest Answer Explanation
Corporate Finance, 4e, Global Edition (Berk / DeMarzo) Chapter 1 The Corporation 1.1 The Four Types of Firms 1) A sole proprietorship is owned by: A) one person. B) two of more persons. C) shareholders. D) bankers. Answer: A Diff: […]
Counseling Chapter 15 Agency Fema National Counterterrorism Center Nctc Department Homeland Security Dhs What Federal
Name: Class: Date: chapter 15 Copyright Cengage Learning. Powered by Cognero. Page 1 Indicate whether the statement is true or false. 1. In a 2006 Harris Interactive poll, a majority of Americans reported that they were more concerned with individual […]
Counseling Chapter 14 Ncic Means National Crime Investigation Center National Criminal Information Center National Crime
Name: Class: Date: chapter 14 Copyright Cengage Learning. Powered by Cognero. Page 1 Indicate whether the statement is true or false. 1. The domestic use of drones, and even their consideration of use, has become the subject of national debate, […]
Counseling Chapter 13 Americans With Disability Act And Police Interrogations True False Berghuis Thompkins Determined
Name: Class: Date: chapter 13 Copyright Cengage Learning. Powered by Cognero. Page 1 Indicate whether the statement is true or false. 1. A police officer’s attempt to terminate a dangerous, high-speed car chase that threatens the lives of innocent bystanders […]