Interested in a PLAGIARISM-FREE paper based on these particular instructions?...with 100% confidentiality?

Order Now

Which of the following statements is CORRECT? Question 2 8 out of 8 points Which of the following statements is most CORRECT? Question 3 8 out of 8 points Stock X has a required return of 10%, while Stock Y has a required return of 12%. Which of the following statements is CORRECT? Question 4 8 out of 8 points Which of the following statements is CORRECT? CorrectB. Using MACRS depreciation rather than straight line normally has the effect of speeding up cash flows and thus increasing a project’s forecasted NPV. Question 5 8 out of 8 points Deeble Construction Co.’s stock is trading at $30 a share. Call options on the company’s stock are also available, some with a strike price of $25 and some with a strike price of $35. Both options expire in three months. Which of the following best describes the value of these options? Question 6 8 out of 8 points You are on the staff of Camden Inc. The CFO believes project acceptance should be based on the NPV, but Steve Camden, the president, insists that no project can be accepted unless its IRR exceeds the project’s risk-adjusted WACC. Now you must make a recommendation on a project that has a cost of $15,000 and two cash flows: $110,000 at the end of Year 1 and -$100,000 at the end of Year 2. The president and the CFO both agree that the appropriate WACC for this project is 10%. At 10%, the NPV is $2,355.37, but you find two IRRs, one at 6.33% and one at 527%, and a MIRR of 11.32%. Which of the following statements best describes your optimal recommendation, i.e., the analysis and recommendation that is best for the company and least likely to get you in trouble with either the CFO or the president? Question 7 8 out of 8 points 1. Based on the corporate valuation model, Hunsader’s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. The company has 10 million shares of stock outstanding. What is the best estimate of the stock’s price per share? Question 8 8 out of 8 points When working with the CAPM, which of the following factors can be determined with the most precision? Question 9 8 out of 8 points Volga Publishing is considering a proposed increase in its debt ratio, which would also increase the company’s interest expense. The plan would involve issuing new bonds and using the proceeds to buy back shares of its common stock. The company’s CFO thinks the plan will not change total assets or operating income, but that it will increase earnings per share (EPS). Assuming the CFO’s estimates are correct, which of the following statements is CORRECT? Question 10 8 out of 8 points If two firms have the same current dividend and the same expected dividend growth rate, their stocks must sell at the same current price or else the market will not be in equilibrium. Question 11 8 out of 8 points A highly risk-averse investor is considering adding one additional stock to a 3-stock portfolio, to form a 4-stock portfolio. The three stocks currently held all have b = 1.0 and a perfect positive correlation with the market. Potential new Stocks A and B both have expected returns of 15%, and both are equally correlated with the market, with r = 0.75. However, Stock A’s standard deviation of returns is 12% versus 8% for Stock B. Which stock should this investor add to his or her portfolio, or does the choice matter? Question 12 8 out of 8 points Which of the following statements is CORRECT? Question 13 8 out of 8 points You are negotiating to make a 7-year loan of $25,000 to Breck Inc. To repay you, Breck will pay $2,500 at the end of Year 1, $5,000 at the end of Year 2, and $7,500 at the end of Year 3, plus a fixed but currently unspecified cash flow, X, at the end of Years 4 through 7. Breck is essentially riskless, so you are confident the payments will be made, and you regard 8% as an appropriate rate of return on low risk 7-year loans. What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X? Question 14 8 out of 8 points Below is the common equity section (in millions) of Teweles Technology’s last two year-end balance sheets: 2007 2006 Common Stock $2000 $1000 Retained Earnings 2000 2340 Total Common Equity $4000 $3340 Teweles has never paid a dividend to its common stockholders. Which of the following statements is CORRECT? Question 15 8 out of 8 points Which of the following statements is NOT CORRECT? Question 16 8 out of 8 points In 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200. If the car still sold for the same amount of yen today but the current exchange rate is 144 yen per dollar, what would the car be selling for today in U.S. dollars? Question 17 8 out of 8 points Edmondson Electric Systems is considering a project that has the following cash flow and WACC data. What is the project’s NPV? Note that if a project’s projected NPV is negative, it should be rejected. WACC: 10.00% Year: 0 1 2 3 Cash flows: -$1000 $500 $500 $500 Question 18 8 out of 8 points Suppose firms follow similar financing policies, face similar risks, have equal access to capital, and operate in competitive product and capital markets. Under these conditions, then firms that have Question 19 8 out of 8 points Companies E and P each reported the same earnings per share (EPS), but Company E’s stock trades at a higher price. Which of the following statements is CORRECT? Question 20 8 out of 8 points Which of the following statements is CORRECT? Question 21 8 out of 8 points Other things held constant, which of the following will cause an increase in net working capital? Question 22 8 out of 8 points Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC)? = Question 23 8 out of 8 points Which of the following statements is CORRECT? Question 24 8 out of 8 points Which of the following does NOT always increase a company’s market value? Question 25 8 out of 8 points Firm A has a higher degree of business risk than Firm B. Firm A can offset this by using less financial leverage. Therefore, the variability of both firms’ expected EBITs could actually be identical.

Which of the following statements is CORRECT?

Question 2

8 out of 8 points

Which of the following statements is most CORRECT?

Question 3

8 out of 8 points

Stock X has a required return of 10%, while Stock Y has a required return of 12%. Which of the following statements is CORRECT?

Question 4

8 out of 8 points

Which of the following statements is CORRECT?

CorrectB.

Using MACRS depreciation rather than straight line normally has the effect of speeding up cash flows and thus increasing a project’s forecasted NPV.

Question 5

8 out of 8 points

Deeble Construction Co.’s stock is trading at $30 a share. Call options on

the company’s stock are also available, some with a strike price of $25 and

some with a strike price of $35. Both options expire in three months. Which

of the following best describes the value of these options?

Question 6

8 out of 8 points

You are on the staff of Camden Inc. The CFO believes project acceptance should be based on the NPV, but Steve Camden, the president, insists that no project can be accepted unless its IRR exceeds the project’s risk-adjusted WACC. Now you must make a recommendation on a project that has a cost of $15,000 and two cash flows: $110,000 at the end of Year 1 and -$100,000 at the end of Year 2. The president and the CFO both agree that the appropriate WACC for this project is 10%. At 10%, the NPV is $2,355.37, but you find two IRRs, one at 6.33% and one at 527%, and a MIRR of 11.32%. Which of the following statements best describes your optimal recommendation, i.e., the analysis and recommendation that is best for the company and least likely to get you in trouble with either the CFO or the president?

Question 7

8 out of 8 points

1. Based on the corporate valuation model, Hunsader’s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. The company has 10 million shares of stock outstanding. What is the best estimate of the stock’s price per share?

Question 8

8 out of 8 points

When working with the CAPM, which of the following factors can be determined with the most precision?

Question 9

8 out of 8 points

Volga Publishing is considering a proposed increase in its debt ratio, which would also increase the company’s interest expense. The plan would involve issuing new bonds and using the proceeds to buy back shares of its common stock. The company’s CFO thinks the plan will not change total assets or operating income, but that it will increase earnings per share (EPS). Assuming the CFO’s estimates are correct, which of the following statements is CORRECT?

Question 10

8 out of 8 points

If two firms have the same current dividend and the same expected dividend growth rate, their stocks must sell at the same current price or else the market will not be in equilibrium.

Question 11

8 out of 8 points

A highly risk-averse investor is considering adding one additional stock to a 3-stock portfolio, to form a 4-stock portfolio. The three stocks currently held all have b = 1.0 and a perfect positive correlation with the market. Potential new Stocks A and B both have expected returns of 15%, and both are equally correlated with the market, with r = 0.75. However, Stock A’s standard deviation of returns is 12% versus 8% for Stock B. Which stock should this investor add to his or her portfolio, or does the choice matter?

Question 12

8 out of 8 points

Which of the following statements is CORRECT?

Question 13

8 out of 8 points

You are negotiating to make a 7-year loan of $25,000 to Breck Inc. To repay you, Breck will pay $2,500 at the end of Year 1, $5,000 at the end of Year 2, and $7,500 at the end of Year 3, plus a fixed but currently unspecified cash flow, X, at the end of Years 4 through 7. Breck is essentially riskless, so you are confident the payments will be made, and you regard 8% as an appropriate rate of return on low risk 7-year loans. What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X?

Question 14

8 out of 8 points

Below is the common equity section (in millions) of Teweles Technology’s last two year-end balance sheets:

2007 2006

Common Stock $2000 $1000

Retained Earnings 2000 2340

Total Common Equity $4000 $3340

Teweles has never paid a dividend to its common stockholders. Which of the following statements is CORRECT?

Question 15

8 out of 8 points

Which of the following statements is NOT CORRECT?

Question 16

8 out of 8 points

In 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200. If the car still sold for the same amount of yen today but the current exchange rate is 144 yen per dollar, what would the car be selling for today in U.S. dollars?

Question 17

8 out of 8 points

Edmondson Electric Systems is considering a project that has the following cash flow and WACC data. What is the project’s NPV? Note that if a project’s projected NPV is negative, it should be rejected.

WACC: 10.00%

Year: 0 1 2 3

Cash flows: -$1000 $500 $500 $500

Question 18

8 out of 8 points

Suppose firms follow similar financing policies, face similar risks, have equal access to capital, and operate in competitive product and capital markets. Under these conditions, then firms that have

Question 19

8 out of 8 points

Companies E and P each reported the same earnings per share (EPS), but Company E’s stock trades at a higher price. Which of the following statements is CORRECT?

Question 20

8 out of 8 points

Which of the following statements is CORRECT?

Question 21

8 out of 8 points

Other things held constant, which of the following will cause an increase in net working capital?

Question 22

8 out of 8 points

Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC)?

=

Question 23

8 out of 8 points

Which of the following statements is CORRECT?

Question 24

8 out of 8 points

Which of the following does NOT always increase a company’s market value?

Question 25

8 out of 8 points

Firm A has a higher degree of business risk than Firm B. Firm A can offset this by using less financial leverage. Therefore, the variability of both firms’ expected EBITs could actually be identical.

 

Interested in a PLAGIARISM-FREE paper based on these particular instructions?...with 100% confidentiality?

Order Now