By definition, the market portfolio has a ________ and the risk free rate has a ________. A) beta equal to 1.0; beta equal to 0.0. B) beta equal 0.0; beta equal to 1.0. C) standard deviation equal to 1.0; beta equal to 0.0. D) standard deviation equal to 0.0; beta equal to 1.0. […]
Date: September 19th, 2020
The cost of giving up a cash discount on a credit purchase is ________. A) added on to the price of the goods in order to make payment quickly B) deducted from the price of the goods in order to make payment quickly C) the implied interest rate paid in order to delay payment for […]
Date: September 19th, 2020
The motive to pay stock dividend to retain cash to satisfy past-due bills, may result in a decline in market value. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A firm with a beta of 2.0 should: A) be forced to stop trading until the market perceives less risk. B) require twice the return on the market portfolio. C) require twice the market risk premium. D) require twice the risk-free rate of return. ANSWER C
Date: September 19th, 2020
Which of the following capital budgeting evaluation techniques does NOT have an available Excel function? A) NPV B) IRR C) MIRR D) Excel contains each of these functions. ANSWER D
Date: September 19th, 2020
To determine the cash flow from operating activities, certain adjustments must be made which include A) Add back depreciation, amortization, and stock-based compensation expenses. B) Adjust for any changes in operating assets and liabilities. C) Add or subtract any changes in deferred income taxes. D) All of the above. ANSWER D
Date: September 19th, 2020
The shareholder receiving a stock dividend receives a share of common stock of equal value to their existing shares of common stock. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A firm purchased goods with a purchase price of $1,000 and credit terms of 1/10 net 30. The firm paid for these goods on the 5th day after the date of sale. The firm must pay ________ for the goods. A) $990 B) $900 C) $1,000 D) $1,100 ANSWER A
Date: September 19th, 2020
Which of the following is NOT a use of cash from financing activities? A) Repayment of long-term debt B) Proceeds from issuance of common stock C) Proceeds for long-term borrowing D) Both B and C ANSWER D
Date: September 19th, 2020
A firm with a beta of 1.0 and when held in a well-diversified portfolio should be considered to have ________ risk than the market portfolio. A) less B) neither more nor less C) more D) There is not enough information to answer this question. ANSWER B
Date: September 19th, 2020
