Central Perk Coffee Co. trades for $0.85 per share and had 100M shares outstanding. It announces that it will execute a reverse-split on a 1-for-4 basis. What price will the stock trade for after the split? A) $0.15 B) $0.85 C) $1.06 D) $2.40 E) $3.40 ANSWER E
Date: September 19th, 2020
In the short run, relative purchasing power parity does not explain changes in exchange rates well. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
At least how much of a typical manufacturing firms assets are tied up in inventory? A) 15% B) 25% C) 10% D) 30% E) 35% ANSWER A
Date: September 19th, 2020
If net income after tax was $10,000, interest expense was $4,000, and taxes were $1,000, what is the net profit margin if sales were $50,000? A) 10% B) 30% C) 22% D) 28% E) 20% ANSWER E
Date: September 19th, 2020
According to the theory of purchasing power parity, if the price of haircuts in the United States is lower than those in Mexico, A) U.S. exports should increase. B) there would be little effect in both currency and services markets. C) the value of the peso should fall by a large amount. D) the value […]
Date: September 19th, 2020
Ewing Oil has $5B of excess cash and has announced an open market stock repurchase. Prior to the announcement, the stock was trading for $25 per share and there are 2.5B shares outstanding. Assume that the stock repurchase is executed at the pre-repurchase price. Sue Ellen has 100 shares of Ewing Oil. She bought the […]
Date: September 19th, 2020
Sales for a firm are $500,000, cost of goods sold are $400,000, and interest expenses are $20,000. What is the gross profit margin? A) 16.0% B) 20.0% C) 4.0% D) 25.0% E) 30.0% ANSWER B
Date: September 19th, 2020
Two homogeneous products from Germany and Brazil are being purchased by an American trader. The product from Germany is cheaper than the product from Brazil. According to ________, the trader will purchase the products from Germany until the increased demand for the German product equalizes the price. A) Arbitrage B) Purchasing power parity C) Law […]
Date: September 19th, 2020
As long as the flow of currencies is ________, the exchange rate can remain ________. A) out of balance; constant B) equal; in flux C) there is no relationship between the two D) equal; constant ANSWER D
Date: September 19th, 2020
By using a forward transaction, ________ has been transferred from the firm to a speculator in the exchange rate market. A) exchange rate risk B) political risk C) foreign risk D) market risk ANSWER A
Date: September 19th, 2020
