White Company stock has a beta of 2 and a required return of 23%, while Black Company stock has a beta of 1.0 and a required return of 14%. The standard deviation of returns for White Company is 10% more than the standard deviation for Black Company. The risk-free rate of return according to the […]
Date: September 19th, 2020
You have two contracts available to you: ONE is a perpetuity with cash flows of $500 per year, with the first cash flow beginning today. TWO is a perpetuity with cash flows of $500 per year, with the first cash flow beginning one year from today. Which has a greater present value if the required […]
Date: September 19th, 2020
For the FCFF calculation: A) we must examine changes in net working capital. B) a firm that is not growing may be expected to have no changes in net working capital. C) it is important to consider only incremental or changing working capital needs. D) all of the above are true. ANSWER D
Date: September 19th, 2020
Surf and Spray Inc. has a beta equal to 1.8 and a required return of 15% based on the CAPM. If the risk-free rate of return is 4.2%, the expected return on the market portfolio is A) 10.2%. B) 21%. C) 19.2%. D) 13.4%. ANSWER A
Date: September 19th, 2020
Under the Fair Debt Collection Practices Act (FDCPA), a debt collector A) can continue collection efforts until you pay off your debts in total. B) must give you a written notice describing your debt in detail and what to do if you feel you do not owe the debt. C) cannot use abusive tactics to […]
Date: September 19th, 2020
The primary function of the monthly income and expense plan is to assure that each month’s income is not less than each month’s expenses. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Nic is a great basketball player with a long professional career in front of him. He plays for a European professional team that has made him a very interesting offer. If he will take a “below market” salary beginning one year from today, they will guarantee a 5% annual raise forever – even after he […]
Date: September 19th, 2020
An interest penalty is associated with a CD, but not with a money market deposit account. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Green Company stock has a beta of 2 and a required return of 23%, while Gold Company stock has a beta of 1.0 and a required return of 14%. The standard deviation of returns for Green Company is 10% more than the standard deviation for Gold Company. The expected return on the market portfolio according […]
Date: September 19th, 2020
What is the present value of a series of $5,000 end-of-the-year cash flows to be received forever if the required rate of return is 6.00% per year and the first cash flow is one year from today? A) $8,333.33 B) $83,333.33 C) $300.00 D) This question cannot be answered because there is no time period […]
Date: September 19th, 2020
