样题公司财务

1、True-Falsei .Recently. Hale Corporation announced the sale of 2.5 million newly issued shares of itsstock at a price of $21 per share. Hale sold the stock to in vestme nt ban kers, who in tur n sold it to in dividual and in stituti onal in vestors.A tran sacti on such as this is said to be aprimary

2、market tran sacti on.a. Trueb. Falseii . The effective annual rate is always greater than the nominal rate as a result ofcompo unding effects.a. Trueb. Falseiii .The coefficie nt of variatio n is a better measure of risk tha n the sta ndard deviati on if theexpected retur ns of the securities being

3、compared differ sig ni fica ntly.a. Trueb. Falseiv . The prices of high-coup on bonds tend to be less sen sitive to a give n cha nge in in terestrates tha n low-coup on bon ds, other things equal and held con sta nt.a. Trueb. Falsev. If two firms have the same curre nt divide nd and the same expecte

4、d growth rate, their stocksmust sell at the same curre nt price or else the market will not be in equilibrium.a. Trueb. Falsevi . It is not possible for a firms use of debt to in crease but its after-tax cost of debt to decli ne.a. Trueb. Falsevii . The main reas on that the NPV method is regarded a

5、s being con ceptually superior to the IRRmethod for evaluating mutually exclusive investments is that multiple IRRs may exist.a. Trueb. Falseviii . Any cash flow that can be classified as in creme ntal is releva nt in a capital budgeti ng projectan alysis.a. Trueb. Falseix . Suppose two firms have t

6、he same amount of assets, pay the same interest rate on their debt,have the same basic earning power (BEP), and have the same tax rate. However, one firm has a higher debt ratio. If BEP is greater than the interest rate on debt, the firm with the higher debt ratio will also have a higher rate of ret

7、urn on com mon equity.a. Trueb. FalseMultiple Choice: Conceptualx. Which of the follow ing acti ons will cause an in crease in the quick ratio in the short run?a. $1,000 worth of inven tory is sold, and an accou nt receivable is created. The receivable exceeds the inventory by the amount of profit o

8、n the sale, which is added to retained ear nin gs.b. A small subsidiary which was acquired for $100,000 two years ago and which was gen erat ing profits at the rate of 10 perce nt is sold for $100,000 cash. (Average compa ny profits are 15 perce nt of assets.)c. Marketable securities are sold at cos

9、t.d. All of the an swers above.e. An swers a and b above.xi. Other things held con sta nt, which of the follow ing would in crease the NPV of a project being con sidered?a. A shift from MACRS to straight-li ne depreciati on.b. Making the initial investment in the first year rather than spreading it

10、over the first 3 years.c. A decrease in the discou nt rate associated with the project.d. The sale of the old mach ine in a replaceme nt decisi on at a capital loss rather tha n at book value.e. An in crease in required work ing capital.xiiWhich of the followi ng stateme nts is most correct?a. The b

11、efore-tax cost of preferred stock may be lower tha n the before-tax cost of debt, eve n though preferred stock is riskier tha n debt.b. If a compa nys stock price in creases, this in creases its cost of com mon stock.c. If the cost of equity capital in creases, it must be due to an in crease in the

12、firms beta.d. Stateme nts a and b are correct.e. An swers a, b, and c are correct.xiii . Projects A and B have the same expected lives and initial cash outflows. However, one projects cash flows are larger in the early years, while the other project has larger cash flows in the later years. The two

13、NPV profiles are give n below:Which of the followi ng stateme nts is most correct?a. Project A has the smaller cash flows in the later years.b. Project A has the larger cash flows in the later years.c. We require information on the cost of capital in order to determine which project has larger early

14、 cash flows.d. The NPV profile graph is inconsistent with the statement made in the problem.e. None of the stateme nts above is correct.xiv . Which of the following statements is false?a. Whe n a corporati ons shares are owned by a few in dividuals who are associated with orare the firms management,

15、 we say that the firm is closely held.b. A publicly owned corporati on is simply a compa ny whose shares are held by the in vest ing public, which may in clude other corporati ons and in stituti ons as well as in dividuals.c. Going public establishes a true market value for the firm and en sures tha

16、t a liquid market will always exist for the firms shares.d. When stock in a closely held corporation is offered to the public for the first time the tran sacti on is called go ing public and the market for such stock is called the new issue market.e. It is possible for a firm to go public, and yet n

17、ot raise any additional new capital.xv . Assume interest rates on Iong-term government and corporate bonds were as follows:T-bo nd = 7.72%A =9.64%AAA = 8.72%BBB = 10.18%The differe nces in rates among these issues were caused primarily bya. Tax effects.b. Default risk differe nces.c. Maturity risk d

18、iffere nces.d. In flati on differe nces.e. An swers b and d are correct.xvi . Suppose some one offered you the choice of two equally risky ann uities, each pay ing$10,000 per year for five years. One is an ordinary (or deferred) annu ity, the other is an annuity due. Which of the followi ng stateme

19、nts is most correct?a. The present value of the ordinary annuity must exceed the present value of the annu ity due, but the future value of an ordinary annu ity may be less tha n the future value of the annuity due.b. The present value of the annuity due exceeds the present value of the ordinary ann

20、u ity, while the future value of the annu ity due is less tha n the future value of the ordinary ann uity.c. The present value of the annuity due exceeds the present value of the ordinary annu ity, and the future value of the annu ity due also exceeds the future value of the ordinary ann uity.d. If

21、in terest rates in crease, the differe nce betwee n the prese nt value of the ordi nary annu ity and the prese nt value of the ann uity due rema ins the same.e. An swers a and d are correct.xvii . Stock A has a beta of 1.5 and Stock B has a beta of 0.5. Which of the followingstatements must be true

22、about these securities? (Assume the market is in equilibrium.)a. When held in isolation, Stock A has greater risk than Stock B.b. Stock B would be a more desirable addition to a portfolio than Stock A.c. Stock A would be a more desirable addition to a portfolio than Stock B .d. The expected return o

23、n Stock A will be greater tha n that on Stock B.e. The expected return on Stock B will be greater tha n that on Stock A.xviii . Which of the followi ng stateme nts is most correct?a. If a bond s yield to maturity exceeds its annual coup on, the n the bond will bteadi ngat a premium.b. If interest ra

24、tes increase, the relative price change of a 10-year coupon bond will be greater than the relative price change of a 10-year zero coupon bond.c. If a coupon bond is selling at par, its current yield equals its yield to maturity.d. Both a and c are correct.e. None of the answers above is correct.Mult

25、iple Choice: Problemsxix . Dean Brothers Inc. recently reported net income of $1,500,000.The company has 300,000shares of common stock. The stock currently trades at $60 a share. The company continues to expand and anticipates that one year from now its net income will be $2,500,000. Over the next y

26、ear the company also anticipates issuing an additional 100,000 shares of stock, so that one year from now the company will have 400,000 shares of common stock. Assuming the companys price/earnings ratio remains at its current level, what will be the companys stock price one year from now?a.$55b.$60c

27、.$65d.$70e.$75xx .Assume that r* = 2.0%; the maturity risk premium is found as MRP = 0.1%(t - 1) where t= years to maturity; the default risk premium for corporate bonds is found as DRP = 0.05%(t - 1); the liquidity premium is 1.0 percent for corporate bonds only; and inflation is expected to be 3 p

28、ercent, 4 percent, and 5 percent during the next three years and then 6 percent thereafter. What is the difference in interest rates between 10-year corporate and Treasury bonds?a. 0.45%b. 1.45%c. 2.20%d. 2.75%e. 3.25%xxi . Due to a number of lawsuits related to toxic wastes, a major chemical manufa

29、cturer has recently experienced a market reevaluation. The firm has a bond issue outstanding with 15 years to maturity and a coupon rate of 8 percent, with interest paid semiannually. The required nominal rate on this debt has now risen to 16 percent. What is the current value of this bond?a. $1,273

30、b. $1,000c. $7,783d. $ 550e. $ 450xxii . A project with a 3-year life has the followingprobability distributions for possibleen d-of-year cash flows in each of the n ext three years:Year 1Year 2Year 3ProbCash FlowProbCash FlowProbCash Flow0.30$3000.15$1000.25$2000.405000.352000.758000.307000.356000.

31、15900Using an in terest rate of 8 perce nt, find the expected prese nt value of these un certa in cash flows. (Hint: Find the expected cash flow in each year, the n evaluate those cash flows.)a. $1,204.95b. $835.42c. $1,519.21d. $1,580.00e. $1,347.61xxiii . Assume that a new law is passed which rest

32、ricts in vestors to holdi ng only one asset. A risk-averse investor is considering two possible assets as the asset to be held in isolation. The assets possible returns and related probabilities (i.e., the probability distributions) are as follows:Asset XAsset YPrPr0.10-3%0.05-3%0.1020.1020.2550.305

33、0.2580.3080.30100.2510Which asset should be preferred?a. Asset X, since its expected retur n is higher.b. Asset Y, since its beta is probably lower.c. Either one, since the expected returns are the same.d. Asset X, since its sta ndard deviati on is lower.e. Asset Y, since its coefficie nt of variati

34、o n is lower and its expected retur n is higher.xxiv . Ceejay Corporation s stock is currently selling at an equilibrium price of $30 per share. Thefirm has been experiencing a 6 percent annual growth rate. Last year s earnings per share, Ewere $4.00 and the divide nd payout ratio is 40 perce nt. Th

35、e risk-free rate is 8 perce nt, and themarket risk premium is 5 perce nt. If market risk (beta) in creases by 50 perce nt, and all otherfactors remain constant, what will be the new stock price? (Use 4 decimal places in your calculati on s.)a. $16.59b. $18.25c. $21.39d. $22.69e. $53.48xxv . Grateway

36、 Inc. has a weighted average cost of capital of 11.5 percent. Its target capitalstructure is 55 percent equity and 45 percent debt. The company has sufficient retainedearnings to fund the equity portion of its capital budget. The before-tax cost of debt is 9perce nt, and the compa ny s tax rate is 3

37、0 perce nt. Ifexpscted divide nd n ext period (D 1)and current stock price are $5 and $45, respectively, what is the company s growth rate?a. 2.68%b. 3.44%c. 4.64%d. 6.75%e. 8.16%xxvi . Shannon In dustries is con sideri ng a project which has the follow ing cash flows:Year01234Cash Flow ?$2,0003,000

38、3,0001,500The project has a payback of 2.5 years. project s net present value NPV?The firm s cost of capital is 12 percent.What is thea. $577.68b. $765.91c. $1,049.80d. $2,761.32e. $3,765.91i.Stock market tra nsacti onsAn swer: a Diff: Eii.Effective and nominal ratesAn swer: b Diff: Miii.Risk compar

39、is onsAn swer:Diff: Eiv.Prices and in terest ratesAn swer:Diff: Mv.Stock priceAn swer:Diff: Mvi.After-tax cost of debtAn swer:Diff: Mvii.NPV versus IRRAn swer:Diff: Mviii. Releva nt cash flowsAn swer:Diff: Eix.BEP and ROEAn swer:Diff: Mx.Quick ratioAn swer:Diff: Mxi.NPV and depreciati onAn swer:Diff

40、: Exii.Miscella neous con ceptsAn swer:Diff: MStateme nta is correct.Most preferredstockisownedbycorporati ons which receive a 70 perce nt exclusi on of divide nds.Con seque ntly.the before-taxcoupons on preferredstockare ofte nlower tha n the before-tax coup ons on debt, despite the fact thatpreferredstock is riskierthan debt. Allthe otherstateme ntsarefalse.xiii.NPV profilesAn swer: bDiff: Exiv.Own ership and going publicAn swer: cDiff: Mxv.In terest ratesAn swer: bDiff: Mxvi.Ann uitiesAn swer: cDiff: MBy defi niti on, an ann uity due is recei