________ is the right but not the obligation to make a particular business decision. A) Net present value B) Real option analysis C) Internal rate of return D) Modified internal rate of return ANSWER B
Date: September 19th, 2020
Which of the following statements regarding net income transferred to retained earnings is correct? A) Net income = net income transferred to retained earnings – dividends B) Net income transferred to retained earnings = net income + dividends C) Net income = net income transferred to retain earnings + dividends D) Net income transferred to […]
Date: September 19th, 2020
A “qualified” opinion from an auditor is preferred to an “unqualified” opinion in a firm’s annual report. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
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 is likely to be a part of the firm’s annual report? A) The 10-K report B) A letter from senior management to the shareholders C) Footnotes to the financial statements D) All of the above ANSWER D
Date: September 19th, 2020
________ measures such as debt-to-capital along with coverage ratios focus on a firm’s ability to meet its long-term debt obligations, as well as its optimal use of debt. A) Liquidity B) Leverage C) Profitability D) Resource management ANSWER B
Date: September 19th, 2020
Freightway Trucking Inc uses the CAPM to help estimate their cost of equity. Given the following information, what is the firm’s estimated cost of equity? The risk-free return in the market is currently 3%, the market risk premium is 8%, the expected return on the market portfolio if 11% and the firm has a beta […]
Date: September 19th, 2020
