Fin 370 Final Exams 2 Essay Example
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1. One year ago, you purchased 200 shares of stock for $29 a share. The stock pays $.60 a share in dividends each year. Today, you sold your shares for $31.60 a share. What is your total dollar return on this investment?
a. $480
b. $670
c. $610
d. $640
e. $520
2. The amount of systematic risk present in a particular risky asset relative to that in an average risky asset is called the:
a. mean.
b. beta coefficient.
c. risk premium.
d. standard deviation.
e. variance.
3. Huckster's is reviewing its current accounts to determine how a proposed project might affect the account balances. The firm estimates the project will initially require $86,000 in current assets and $69,000 in additional current liabilities. The firm also estimates the project will require an additional $9,000 a year in current assets for each one of the five years of the project. How much net working capital will the firm recoup at the end of the project assuming that all net working capital can be recaptured?
a. $62,000
b. $17,000
c. $62,000
d. $28,000
e. $17,000
4. The return on a risky asset that is anticipated in the future is called the:
a. real return.
b. risk premium.
c. systematic return.
d. expected return.
e. beta.
5. Which of the following will increase the sustainable growth rate of a firm?
I. eliminating all dividends
II. Increasing the target debt-equity ratio
III. Increasing the profit margin
IV. Increasing the total asset turnover rate
6. Truman Florists pays a constant annual dividend of $2.20 per share on its stock. Last year at this time, the market rate of return on this stock was 12.6 percent. Today, the market rate has fallen to 9.7 percent. What would your capital gains yield have been if you had purchased this stock one year ago and then sold the stock today?
7. A premium bond has a:
I. market price
1. One year ago, you purchased 200 shares of stock for $29 a share. The stock pays $.60 a share in dividends each year. Today, you sold your shares for $31.60 a share. What is your total dollar return on this investment?
a. $480
b. $670
c. $610
d. $640
e. $520
2. The amount of systematic risk present in a particular risky asset relative to that in an average risky asset is called the:
a. mean.
b. beta coefficient.
c. risk premium.
d. standard deviation.
e. variance.
3. Huckster's is reviewing its current accounts to determine how a proposed project might affect the account balances. The firm estimates the project will initially require $86,000 in current assets and $69,000 in additional current liabilities. The firm also estimates the project will require an additional $9,000 a year in current assets for each one of the five years of the project. How much net working capital will the firm recoup at the end of the project assuming that all net working capital can be recaptured?
a. $62,000
b. $17,000
c. $62,000
d. $28,000
e. $17,000
4. The return on a risky asset that is anticipated in the future is called the:
a. real return.
b. risk premium.
c. systematic return.
d. expected return.
e. beta.
5. Which of the following will increase the sustainable growth rate of a firm?
I. eliminating all dividends
II. Increasing the target debt-equity ratio
III. Increasing the profit margin
IV. Increasing the total asset turnover rate
6. Truman Florists pays a constant annual dividend of $2.20 per share on its stock. Last year at this time, the market rate of return on this stock was 12.6 percent. Today, the market rate has fallen to 9.7 percent. What would your capital gains yield have been if you had purchased this stock one year ago and then sold the stock today?
7. A premium bond has a:
I. market price