Which of the following is used to analyze a firm’s financial performance over different years? A) time-series analysis B) break-even analysis C) gap analysis D) marginal analysis ANSWER A
Date: September 19th, 2020
Which of the following explains the general shape of the yield curve of a bond? A) Expectations theory B) Perfect market theory C) Capital asset pricing theory D) Securities market theory ANSWER A
Date: September 19th, 2020
Holding risk constant, the implementation of projects with a rate of return above the cost of capital will decrease the value of a firm, and vice versa. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Ratios provide a ________ measure of a company’s performance and condition. A) definitive B) gross C) relative D) absolute ANSWER C
Date: September 19th, 2020
Assume the following returns and yields: U.S. T-bill = 8%, 5-year U.S. T-note = 7%, IBM common stock = 15%, IBM AAA Corporate Bond = 12% and 10-year U.S. T-bond = 6%. Based on this information, the shape of the yield curve is ________. A) upward sloping B) downward sloping C) flat D) normal […]
Date: September 19th, 2020
The cost of common stock equity refers to the cost of the next dollar of financing necessary to finance a new investment opportunity. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Present and prospective shareholders are mainly concerned with a firm’s ________. A) risk and return B) profitability C) leverage D) liquidity ANSWER A
Date: September 19th, 2020
________ mainly explains the tendency for the yield curve to be upward sloping. A) Expectations theory B) Liquidity preference theory C) Market segmentation theory D) Investor perception theory ANSWER B
Date: September 19th, 2020
Which of the following affects the slope of yield curve? A) tax rates B) dividend policy C) selection of accounting standards D) liquidity preferences ANSWER D
Date: September 19th, 2020
The cost of capital is described as the rate of return required by the market suppliers of capital in order to attract their funds to the firm. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
