In 2012 Advantage Cable Inc. had $250,000 in invested capital, a WACC of 9.35%, EBIT of $75,000, and a tax rate of 30%. With this information please estimate the economic value added (EVA) for the firm. A) $29,125 B) $23,375 C) $52,500 D) There is not enough information to answer this question. ANSWER […]
Date: September 19th, 2020
The Social Security system provides for reduced benefits at an early retirement age. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
With adjustable life insurance both the premiums and the face amount are adjustable. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Social Security provides disability income to A) everyone who is a citizen of the United States. B) only covered workers. C) only retired workers who once were covered workers and their families. D) covered workers and their families. ANSWER D
Date: September 19th, 2020
The higher a stock’s beta, the A) higher its expected return. B) higher its market risk. C) lower its random risk. D) lower its required return. ANSWER B
Date: September 19th, 2020
Conglomicorp Inc has 10.5 million shares of stock outstanding with a book value of $25 per share and a market value of $93 per share. The firm also has $40 million in retained earnings and a required rate of return of 8%. What is the current market capitalization for the firm? A) $904,166,667 B) $976,500,000 […]
Date: September 19th, 2020
The future viability of the Social Security system will depend upon how wisely the government invests our Social Security tax revenues. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Assume that you are considering investing in Xerox common stock. You have found that its beta is +1.2 and you think a market risk premium should be 8%. If you could earn 12% on risk-free Treasury securities, Xerox has a required return of ________%. A) 24.0 B) 14.4 C) 21.6 D) 22.4 ANSWER […]
Date: September 19th, 2020
Disability income insurance typically provides the insured with A) medical payments coverage. B) protection against loss of income (typically at no more than 60-70% of current income). C) protection against loss of income and complete medical insurance coverage. D) protection against loss of income (typically at about 100% of current income). ANSWER B
Date: September 19th, 2020
Net operating profit after taxes (NOPAT) is equal to: A) EBITDA * (1 – tax rate). B) EBITDA * (1 + tax rate). C) EBIT * (1 – tax rate). D) EBIT * (1 + tax rate). ANSWER C
Date: September 19th, 2020
