FIN 515 Final Exam
- TCO A) In the United States, which of the following types of organization has the greatest revenue in total?
- TCO A) A sole proprietorship is owned by
- TCO B) Which of the following would cause the present value of an annuity to increase?
- TCO B) Which of the following is an annuity due?
- TCO G) If you were a manager of a company, which of the three right side components of the DuPont Identity would you want to increase and which would you want to decrease, other things being equal? Give a specific example for how to do that for each of the three.
- TCO D) A stock has just paid a dividend and will pay a dividend of $3.00 in a year. The dividend will stay constant for the rest of time. The return on equity for similar stocks is 14%. What is P0?
- TCO D) A stock has just paid a dividend and has declared an annual dividend of $2.00 to be paid one year from today. Dividend expected to grow 5 percent annual. The return on equity for similar stocks is 12%. What is P0?
- (TCO D) A particular bond has 8 years to maturity. It has a face value of $1,000. Has a YTM of 7% & the coupons are paid semiannually at a 10% annual rate. What does the bond currently sell for?
- (TCO D) A bond currently sells for $1,000 and has a par of $1,000. Issued two years ago and had a maturity of 10 years. The coupon rate is 7%. The interest payments are made semi-annually. What is its YTM?
- (TCO D) What is β and why is it important to investors and issuers of stock? Describe the behavior of stocks with βs of greater than one, less than one, and less than zero.
- TCO E) A company has 100 million shares outstanding trading for $8 per share. It also has $900 million in outstanding debt. If its equity cost of capital is 15%, and its debt cost of capital is 12%, and its effective corporate tax rate is 40%, what is its weighted average cost of capital?
- TCO A) What is the difference between capital structure and capital budgeting? Explain and give an example of a capital structure decision and an example of a capital budgeting decision.
- TCO H) What is the difference between the cash cycle and the operating cycle? Under what condition would they be the same?
- (TCO F) A company has the opportunity to do any of the projects for which the net cash flows per year are… The company has a cost of capital of 12%. Which should the company do and why? You must use at least two capital budgeting methods. Show your work.
FIN 515 Final Exam 1 = 10 Questions and Answers
FIN 515 Final Exam 2 = 10 Questions and Answers
FIN 515 Final Exam 3 = 10 Questions and Answers
FIN 515 Final Exam 4 = 10 Questions and Answers