QUESTION Financial Statement Analysis provides information that indicates how a company is performing. By comparing financial statements of different years, a manager can make informed decisions about investments, expenditures, and activities that impact revenues. Directions: Read the chapter in the text titled Financial Statement Analysis. Using the comparative financial statements for Baby Cakes International Inc. […]
QUESTION The Impact of Management Decisions and Other Topics When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20:Select the best answer to each question. Note […]
QUESTION TABLE 14.1: Balance Sheets for Walgreens ($ millions) 2012 2011 2010 2009 Cash & Cash Equivalents 1,297 1,556 1,880 2,087 Short-Term Investments 0 0 0 500 Accounts Receivable 2,167 2,497 2,450 2,496 Inventories 7,036 8,044 7,378 6,789 Other Current Assets 260 225 214 177 Total Current Assets 10,760 12,322 11,922 12,049 Net Fixed Assets […]
QUESTION A six-year government bond makes annual coupon payments of 5% and offers a yield of3% annually compounded. Suppose that one year later the bond still yields 3%. Whatreturn has the bondholder earned over the 12-month period? Now suppose that the bondyields 2% at the end of the year. What return would the bondholder earn […]
QUESTION Calculate the price of the following bonds, where F is the face value, c is the coupon rate, N is the number of years to maturity, and i is the interest rate (or discount rate, or yield): a. F = $1,000, c = 8%, N = 3, i = 3% b. F = $5,000, […]
QUESTION Risk Premiums Refer to Table 10.1 in the text and look at the period from 1973 through 1978. 1. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. 2. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. 3. Calculate the observed risk premium […]
QUESTION CathFoods will release a new range of candies which contain antioxidants. New equipment to manufacture the candy will cost $2 million, which will be depreciated by straight-line depreciation over five years. In addition, there will be $5 million spent on promoting the new candy line, which will be listed as an expense on the […]
QUESTION Consider a bond with a 10% coupon and with yield to maturity 8%. If the bonds yield to maturity remains constant, then in one year, will the bond price be higher, lower, or unchanged? Why? The price of the bond initially is more than the face value as the YTM is less than the […]
QUESTION Hudson Corporation needs a machine that costs $60,000 and is expected to run for 5 years. Hudson will depreciate it completely in 4 years on a straight-line basis. The tax rate of the company is 33%, and the proper discount rate is 13%. Find the minimum annual earnings before taxes that this machine should […]
QUESTION Which one of the following would provide evidence against the semi strong form of the efficient market theory? a. About 50% of pension funds outperform the market in any year. b. All investors have learned to exploit signals about future performance. c. Trend analysis is worthless in determining stock prices. d. Low P/E stocks […]
