Question details

FIN534 Final Exam Part 2 | A+ work
$ 15.00

 

 

•             Question 1

2 out of 2 points

               

                Which of the following is NOT normally regarded as being a good reason to establish an ESOP?

Answer                                               

                               

               

                                               

•             Question 2

2 out of 2 points

               

                Which of the following is NOT normally regarded as being a barrier to hostile takeovers?

Answer                                               

                                                               

•             Question 3

2 out of 2 points

               

                If a firm adheres strictly to the residual dividend policy, the issuance of new common stock would suggest that

Answer                                               

                                                               

•             Question 4

0 out of 2 points

               

                Which of the following statements is correct?

Answer                                               

                                                               

•             Question 5

2 out of 2 points

               

                Which of the following statements is NOT correct?

Answer                                               

                                                               

•             Question 6

2 out of 2 points

               

                Which of the following actions will best enable a company to raise additional equity capital?

Answer                                               

                                                               

•             Question 7

2 out of 2 points

               

                Which of the following statements is correct?

Answer                                               

                                                               

•             Question 8

2 out of 2 points

               

                Which of the following statements is CORRECT?

Answer                                               

                                                               

•             Question 9

2 out of 2 points

               

                Which of the following statements is correct?

Answer                                               

                                                               

•             Question 10

2 out of 2 points

               

                Which of the following statements is CORRECT?

Answer                                               

                                                               

•             Question 11

2 out of 2 points

               

                Which of these items will not generally be affected by an increase in the debt ratio?

Answer                                               

                                                               

•             Question 12

2 out of 2 points

               

                Based on the information below for Benson Corporation, what is the optimal capital structure?

Answer                                               

                                                               

•             Question 13

0 out of 2 points

               

                Blueline Publishers is considering a recapitalization plan. It is currently 100% equity financed but under the plan it would issue long-term debt with a yield of 9% and use the proceeds to repurchase common stock. The recapitalization would not change the company's total assets, nor would it affect the firm's basic earning power, which is currently 15%. The CFO believes that this recapitalization would reduce the WACC and increase stock price. Which of the following would also be likely to occur if the company goes ahead with the recapitalization plan?

Answer                                               

                                                               

•             Question 14

2 out of 2 points

               

                Which of the following statements is CORRECT?

Answer                                               

                                                               

•             Question 15

2 out of 2 points

               

                Two operationally similar companies, HD and LD, have the same total assets, operating income (EBIT), tax rate, and business risk. Company HD, however, has a much higher debt ratio than LD. Also HD's basic earning power (BEP) exceeds its cost of debt (rd). Which of the following statements is CORRECT?

Answer                                               

                                                               

•             Question 16

2 out of 2 points

               

                Which of the following events is likely to encourage a company to raise its target debt ratio, other things held constant?

Answer                                               

                                                               

•             Question 17

2 out of 2 points

               

                A lockbox plan is

Answer                                               

                                                               

•             Question 18

2 out of 2 points

               

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

Answer                                               

                                                               

•             Question 19

2 out of 2 points

               

                Firms generally choose to finance temporary current operating assets with short-term debt because

Answer                                               

                                                               

•             Question 20

2 out of 2 points

               

                Which of the following statements is most consistent with efficient inventory management? The firm has a

Answer                                               

                                                               

•             Question 21

2 out of 2 points

               

                Other things held constant, which of the following would tend to reduce the cash conversion cycle?

Answer                                               

                                                               

•             Question 22

0 out of 2 points

               

                Which of the following is NOT directly reflected in the cash budget of a firm that is in the zero tax bracket?

Answer                                               

                                                               

•             Question 23

0 out of 2 points

               

                Suppose that 1 British pound currently equals 1.62 U.S. dollars and 1 U.S. dollar equals 1.62 Swiss francs. What is the cross exchange rate between the pound and the franc?

Answer                                               

                                                               

•             Question 24

2 out of 2 points

               

                Suppose it takes 1.82 U.S. dollars today to purchase one British pound in the foreign exchange market, and currency forecasters predict that the U.S. dollar will depreciate by 12.0% against the pound over the next 30 days. How many dollars will a pound buy in 30 days?

Answer                                               

                                                               

•             Question 25

2 out of 2 points

               

                Suppose a foreign investor who holds tax-exempt Eurobonds paying 9% is considering investing in an equivalent-risk domestic bond in a country with a 28% withholding tax on interest paid to foreigners. If 9% after-tax is the investor's required return, what before-tax rate would the domestic bond need to pay to provide the required after-tax return?

Answer                                               

                                                               

•             Question 26

2 out of 2 points

               

                Suppose 1 U.S. dollar equals 1.60 Canadian dollars in the spot market. 6-month Canadian securities have an annualized return of 6% (and thus a 6-month periodic return of 3%). 6-month U.S. securities have an annualized return of 6.5% and a periodic return of 3.25%. If interest rate parity holds, what is the U.S. dollar-Canadian dollar exchange rate in the 180-day forward market?

Answer                                               

                                                               

•             Question 27

2 out of 2 points

               

                Suppose a carton of hockey pucks sell in Canada for 105 Canadian dollars, and 1 Canadian dollar equals 0.71 U.S. dollars. If purchasing power parity (PPP) holds, what is the price of hockey pucks in the United States?

Answer                                               

                                                               

•             Question 28

2 out of 2 points

               

                Suppose Yates Inc., a U.S. exporter, sold a consignment of antique American muscle-cars to a Japanese customer at a price of 143.5 million yen, when the exchange rate was 140 yen per dollar. In order to close the sale, Yates agreed to make the bill payable in yen, thus agreeing to take some exchange rate risk for the transaction. The terms were net 6 months. If the yen fell against the dollar such that one dollar would buy 154.4 yen when the invoice was paid, what dollar amount would Yates actually receive after it exchanged yen for U.S. dollars?

Answer                                               

                                                               

•             Question 29

2 out of 2 points

               

                Suppose 90-day investments in Britain have a 6% annualized return and a 1.5% quarterly (90-day) return. In the U.S., 90-day investments of similar risk have a 4% annualized return and a 1% quarterly (90-day) return. In the 90-day forward market, 1 British pound equals $1.65. If interest rate parity holds, what is the spot exchange rate?

Answer                                               

                                                               

•             Question 30

2 out of 2 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?

Answer                                               

                                                               

 

 

Available solutions