On adjustable-rate loans, the lender is required to provide an example of how the monthly payment might change. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Swiss Cheeses, Inc. has paid annual dividends of $1.00, $1.04, $1.09, and $1.15 per share over the last four years, respectively. The stock is currently selling for $42 a share. What is this firm’s cost of equity? A) 7.45 percent B) 7.64 percent C) 7.83 percent D) 7.87 percent E) 8.02 percent ANSWER […]
Date: September 19th, 2020
What is the IRR for a project with a current cost of $7,000 that is expected to produce cash inflows of $1,000 at the end of each of the next 10 years? Round answer to the nearest whole percent. A) 10% B) 8% C) 7% D) 11% E) 6% ANSWER C
Date: September 19th, 2020
A decline in used car prices may increase end-of-lease payments under a closed-end lease. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
If EBIT increases 15%, EPS increases by 30%, debt increases by 45%, and the tax rate declines by 5%, what is the degree of financial leverage? A) 2 B) 1 C) 9 D) 3 E) 6 ANSWER A
Date: September 19th, 2020
A financial analyst is the same as a financial planner. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Comparing net present value and internal rate of return analysis: A) always result in the same ranking of projects. B) always result in the same accept/reject decision. C) may give different accept/reject decisions. D) is only necessary on mutually exclusive projects. ANSWER B
Date: September 19th, 2020
What is the after-tax cost of preferred stock if its price is $25 per share and it pays a $1 per share dividend? Assume the firm’s marginal tax rate is 25% and there are no flotation costs. A) 5% B) 9% C) 3% D) 4% E) 1% ANSWER D
Date: September 19th, 2020
In comparing the internal rate of return and net present value methods of evaluation, A) Internal Rate of Return is theoretically superior, but financial managers prefer Net Present Value. B) Financial managers prefer net present value, because it measures benefits relative to the costs. C) Financial mangers prefer net present value, because it is presented […]
Date: September 19th, 2020
Both open-end and closed-end leases have fixed monthly payments. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
