1 - JustAnswer
| | | | | | | | |
| |a. |$205.83 | | | | | |
| |b. |$216.67 | | | | | |
| |c. |$228.07 | | | | | |
| |d. |$240.08 | | | | | |
| |e. |$252.08 | | | | | |
| | | | | | | | |
3.
| | | |
| |a. |5.86 |
| |b. |6.52 |
| |c. |7.24 |
| |d. |8.04 |
| |e. |8.85 |
4.
| | | |
| |a. |$18,368.66 |
| |b. |$19,287.09 |
| |c. |$20,251.44 |
| |d. |$21,264.02 |
| |e. |$22,327.22 |
| | | |
| | | |
| |a. |$13,956.42 |
| |b. |$14,654.24 |
| |c. |$15,386.95 |
| |d. |$16,156.30 |
| |e. |$14,202.21 |
| |a. |$411.57 |
| |b. |$433.23 |
| |c. |$456.03 |
| |d. |$480.03 |
| |e. |$505.30 |
| |a. |$238,176 |
| |b. |$250,712 |
| |c. |$263,907 |
| |d. |$277,797 |
| |e. |$291,687 |
| | | |
| |a. |$4,271.67 |
| |b. |$4,496.49 |
| |c. |$4,733.15 |
| |d. |$4,969.81 |
| |e. |$5,218.30 |
| | | | | | | | |
| | | | | | | | |
12.
| | | | | | | | |
| | |
|13. |Walter Industries’ current ratio is 0.5. Considered alone, |
| |which of the following actions would increase the company’s |
| |current ratio? |
| | | | | | | | | | |
| |b. |Use cash to reduce accruals. |
| |c. |Use cash to reduce accounts payable. |
| |d. |Use cash to reduce short-term notes |
| | |payable. |
| |e. |Use cash to reduce long-term bonds |
| | |outstanding. |
| | | |
| | | |
| | | |
|14. |Companies HD and LD have the same total assets, sales, |
| |operating costs, and tax rates, and they pay the same interest |
| |rate on their debt. However, company HD has a higher debt |
| |ratio. Which of the following statements is CORRECT? |
| | | | | | | | | | |
| |b. |Company LD has a higher basic earning |
| | |power ratio (BEP). |
| |c. |Company HD has a higher basic earning |
| | |power ratio (BEP). |
| |d. |If the interest rate the companies pay on |
| | |their debt is more than their basic |
| | |earning power (BEP), then Company HD will |
| | |have the higher ROE. |
| |e. |If the interest rate the companies pay on |
| | |their debt is less than their basic |
| | |earning power (BEP), then Company HD will |
| | |have the higher ROE. |
|15. |Companies HD and LD have the same sales, tax rate, interest |
| |rate on their debt, total assets, and basic earning power. |
| |Both companies have positive net incomes. Company HD has a |
| |higher debt ratio and, therefore, a higher interest expense. |
| |Which of the following statements is CORRECT? |
| | | | | | | | | | |
| |b. |Company HD has a lower equity multiplier. |
| |c. |Company HD has a higher ROA. |
| |d. |Company HD has a higher times interest |
| | |earned (TIE) ratio. |
| |e. |Company HD has more net income. |
| |a. |If two bonds have the same maturity, the |
| | |same yield to maturity, and the same level|
| | |of risk, the bonds should sell for the |
| | |same price regardless of the bond’s coupon|
| | |rates. |
| |b. |All else equal, an increase in interest |
| | |rates will have a greater effect on the |
| | |prices of short-term than long-term bonds.|
| |c. |All else equal, an increase in interest |
| | |rates will have a greater effect on |
| | |higher-coupon bonds than it will have on |
| | |lower-coupon bonds. |
| |d. |If a bond’s yield to maturity exceeds its |
| | |coupon rate, the bond’s price must be less|
| | |than its maturity value. |
| |e. |If a bond’s yield to maturity exceeds its |
| | |coupon rate, the bond’s current yield must|
| | |be less than its coupon rate. |
| |a. |A 20-year zero coupon bond has more |
| | |reinvestment rate risk than a 20-year |
| | |coupon bond. |
| |b. |For any given maturity, a 1.0 percentage |
| | |point decrease in the market interest rate|
| | |would cause a smaller dollar capital gain |
| | |than the capital loss stemming from a 1.0 |
| | |percentage point increase in the interest |
| | |rate. |
| |c. |From a corporate borrower’s point of view,|
| | |interest paid on bonds is not |
| | |tax-deductible. |
| |d. |Price sensitivity as measured by the |
| | |percentage change in price due to a given |
| | |change in the required rate of return |
| | |decreases as a bond’s maturity increases. |
| |e. |For a bond of any maturity, a 1.0 |
| | |percentage point increase in the market |
| | |interest rate (rd) causes a larger dollar |
| | |capital loss than the capital gain |
| | |stemming from a 1.0 percentage point |
| | |decrease in the interest rate. |
All are incorrect.
| |a. |If inflation is expected to increase in |
| | |the future, and if the maturity risk |
| | |premium (MRP) is greater than zero, then |
| | |the yield curve will have an upward slope.|
| |b. |If the maturity risk premium (MRP) is |
| | |greater than zero, then the yield curve |
| | |must have an upward slope. |
| |c. |Because long-term bonds are riskier than |
| | |short-term bonds, yields on long-term |
| | |Treasury bonds will always be higher than |
| | |yields on short-term T-bonds. |
| |d. |If the maturity risk premium (MRP) equals |
| | |zero, the yield curve must be flat. |
| |e. |The yield curve can never be downward |
| | |sloping. |
| | | |
| |a. |7.39% |
| |b. |7.76% |
| |c. |8.15% |
| |d. |8.56% |
| |e. |8.98% |
| | | |
| |a. |1,063.09 |
| |b. |1,090.35 |
| |c. |1,118.31 |
| |d. |1,146.27 |
| |e. |1,174.93 |
| | | | | | | | | | |a.
|b. |All common stocks, regardless of class, must have the same |
| |voting rights. |
|c. |All firms have several classes of common stock. |
|d. |All common stock, regardless of class, must pay the same |
| |dividend. |
|e. |Some class or classes of common stock may be entitled to more |
| |votes per share than other classes. |
| | |
|22. |Stocks A and B have the same required return and the same |
| |price, $25. Stock A’s dividend is expected to grow at a |
| |constant rate of 10% per year, while Stock B’s dividend is |
| |expected to grow at a constant rate of 5% per year. Which of |
| |the following statements is CORRECT? |
| | | | | | | | | | |a.
| | | |
|a. |$90.37 | |
|b. |$92.69 | |
|c. |$95.06 | |
|d. |$97.50 | |
|e. |$100.00 | |
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