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 […]
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
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 […]
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
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
365 / Receivables Turnover = A) Payment Period B) Collection Period C) Operating Period D) Receivables Period E) Payables Period ANSWER B
Pearson Hardman Inc. currently has 2 million shares outstanding and earnings per share (EPS) of $6. After a 3-for-2 split, the shares outstanding and EPS will be: A) 1.33 M Shares outstanding, $9 EPS B) 1.50 M Shares outstanding, $6 EPS C) 2.00 M Shares outstanding, $6 EPS D) 3.00 M Shares outstanding, $4 EPS […]
________ ratios measure the efficiency with which assets are converted to sales or cash. A) Liquidity B) Activity C) Profitability D) Market E) Financing ANSWER B
All of the following will increase the cash conversion cycle EXCEPT: A) An increase in accounts receivable B) An increase in inventory C) An increase in costs of goods sold D) An increase in accounts payable ANSWER D
If the dollar appreciates against the Irish punt, A) the U.S. price of Irish goods will rise. B) the U.S. exports to Ireland will fall. C) then the punt also appreciates against the U.S. dollar. D) the U.S. inflation rate will have a tendency to rise. E) the Irish exports to the U.S. should decline. […]
