公司理财复习题

1、精选优质文档-倾情为你奉上精选优质文档-倾情为你奉上专心-专注-专业专心-专注-专业精选优质文档-倾情为你奉上专心-专注-专业Which one of the following is a means by which shareholders can replace company management?A.stock optionsB.promotionC.Sarbanes-Oxley ActD.agency playE.proxy fightDecisions made by financial managers should primarily focus on increasing

2、which one of the following?A.size of the firmB.growth rate of the firmC.gross profit per unit producedD.market value per share of outstanding stockE.total salesWhich one of the following is the financial statement that shows the accounting value of a firms equity as of a particular date?A.income sta

3、tementB.creditors statementC.balance sheetD.statement of cash flowsE.dividend statementWhich one of the following is the financial statement that summarizes a firms revenue and expenses over a period of time?A.income statementB.balance sheetC.statement of cash flowsD.tax reconciliation statementE.ma

4、rket value reportThe percentage of the next dollar you earn that must be paid in taxes is referred to as the _ tax rate.A.meanB.residualC.totalD.averageE.marginalEDCAEThe cash flow of a firm which is available for distribution to the firms creditors and stockholders is called the:A.operating cash fl

5、ow.B.net capital spending.C.net working capital.D.cash flow from assets.E.cash flow to stockholders.Canine Supply has sales of $2,200, total assets of $1,400, and a debt-equity ratio of 0.3. Its return on equity is 15 percent. What is the net income?A.$138.16B.$141.41C.$152.09D.$156.67E.$161.54Beach

6、 Wear has current liabilities of $350,000, a quick ratio of 1.65, inventory turnover of 3.2, and a current ratio of 2.9. What is the cost of goods sold?A.$980,000B.$1,060,000C.$1,200,000D.$1,400,000E.$1,560,000The sustainable growth rate of a firm is best described as the:A.minimum growth rate achie

7、vable assuming a 100 percent retention ratio.B.minimum growth rate achievable if the firm maintains a constant equity multiplier.C.maximum growth rate achievable excluding external financing of any kind.D.maximum growth rate achievable excluding any external equity financing while maintaining a cons

8、tant debt-equity ratio.E.maximum growth rate achievable with unlimited debt financing.The internal growth rate of a firm is best described as the:A.minimum growth rate achievable assuming a 100 percent retention ratio.B.minimum growth rate achievable if the firm maintains a constant equity multiplie

9、r.C.maximum growth rate achievable excluding external financing of any kind.D.maximum growth rate achievable excluding any external equity financing while maintaining a constant debt-equity ratio.E.maximum growth rate achievable with unlimited debt financing.DEDDCWhat is the present value of $1,100

10、per year, at a discount rate of 10 percent if the first payment is received 6 years from now and the last payment is received 28 years from now?A.$6,067.36B.$6,138.87C.$6,333.33D.$6,420.12E.$6,511.08The current yield is defined as the annual interest on a bond divided by which one of the following?A

11、.couponB.face valueC.market priceD.call priceE.dirty priceCurrently, the bond market requires a return of 11.6 percent on the 10-year bonds issued by Winston Industries. The 11.6 percent is referred to as which one of the following?A.coupon rateB.face rateC.call rateD.yield to maturityE.interest rat

12、eBig Falls Tours just paid a dividend of $1.55 per share. The dividends are expected to grow at 30 percent for the next 8 years and then level off to a 7 percent growth rate indefinitely. What is the price of this stock today given a required return of 15 percent?A.$67.54B.$69.90C.$72.47D.$77.67E.$7

13、8.19Hardwoods, Inc. is a mature manufacturing firm. The company just paid a $10 dividend, but management expects to reduce the payout by 9 percent each year, indefinitely. How much are you willing to pay today per share to buy this stock if you require a 15 percent rate of return?A.$34.79B.$37.92C.$

14、38.27D.$41.33E.$42.09ACDDBYou are considering the following two mutually exclusive projects. The required rate of return is 14.6 percent for project A and 13.8 percent for project B. Which project should you accept and why? A.project A; because it has the higher required rate of returnB.project A; b

15、ecause its NPV is about $4,900 more than the NPV of project BC.project B; because it has the largest total cash inflowD.project B; because it has the largest cash inflow in year oneE.project B; because it has the lower required returnWhich of the following are correct according to pecking-order theo

16、ry?I. Firms stockpile internally-generated cash.II. There is an inverse relationship between a firms profit level and its debt level.III. Firms avoid external debt at all costs.IV. A firms capital structure is dictated by its need for external financing.A.I and III onlyB.II and IV onlyC.I, III, and

17、IV onlyD.I, II, and IV onlyE.I, II, III, and IVThe optimal capital structure:A.will be the same for all firms in the same industry.B.will remain constant over time unless the firm changes its primary operations.C.will vary over time as taxes and market conditions change.D.places more emphasis on ope

18、rations than on financing.E.is unaffected by changes in the financial markets.Which one of the following statements related to stock repurchases is correct?A.U.S. industrial firms have increased their stock repurchases every year for each of the past twenty years.B.A stock repurchase can be used as

19、a means for incumbent officers to retain control of a firm.C.A tender offer indicates that a firm is willing and able to purchase how ever many shares the current shareholders wish to sell.D.All stock repurchases must be identified as such to the selling party.E.Stock repurchases can be a relatively

20、 tax-efficient method of distributing cash to shareholders.Which of the following tend to keep dividends low?I. shareholders desiring current incomeII. terms contained in bond indenture agreementsIII. the desire to maintain constant dividends over timeIV. flotation costsA.II and III onlyB.I and IV o

21、nlyC.II, III, and IV onlyD.I, II, and III onlyE.I, II, III, and IVBDCECWhich of the following will increase the expected rate of return on an individual security as computed by the Capital Asset Pricing Model (CAPM)? Assume that the securitys beta, the risk-free rate of return, and the market rate o

22、f return are all positive. I.a decrease in the securitys betaII.an increase in the securitys betaIII.a decrease in the risk premiumIV.an increase in the market rate of returnA.I and III onlyB.II and IV onlyC.I and IV onlyD.II and III onlyE.II, III, and IV only A stakeholder is: A.a person who owns s

23、hares of stock.B.any person who has voting rights based on stock ownership of a corporation.C.a person who initially founded a firm and currently has management control over that firm.D.a creditor to whom a firm currently owes money.E.any person or entity other than a stockholder or creditor who pot

24、entially has a claim on the cash flows of a firm.A business created as a distinct legal entity and treated as a legal person is called a:A.corporation.B.sole proprietorship.C.general partnership.D.limited partnership.E.unlimited liability company.Which of the following accounts are included in worki

25、ng capital management?I. accounts payableII. accounts receivableIII. fixed assetsIV. inventoryA.I and II onlyB.I and III onlyC.II and IV onlyD.I, II, and IV onlyE.II, III, and IV onlyWhich one of the following best states the primary goal of financial management?A.maximize current dividends per shar

26、eB.maximize the current value per shareC.increase cash flow and avoid financial distressD.minimize operational costs while maximizing firm efficiencyE.maintain steady growth while increasing current profitsBEADBNoncash items refer to:A.accrued expenses.B.inventory items purchased using credit.C.the

27、ownership of intangible assets such as patents.D.expenses which do not directly affect cash flows.E.sales which are made using store credit.Which of the following are current assets?I. patentII. InventoryIII. accounts payableIV. cashA.I and III onlyB.II and IV onlyC.I, II, and IV onlyD.I, II and III

28、 onlyE.II, III, and IV onlyWhich one of the following is a type of equity security that has a fixed dividend and a priority status over other equity securities? A. Senior bondB. DebentureC. WarrantD. Common stockE. Preferred stockAn investment is acceptable if its IRR: A.is exactly equal to its net

29、present value (NPV).B.is exactly equal to zero.C.is less than the required return.D.exceeds the required return.E.is exactly equal to 100 percent.The higher the degree of financial leverage employed by a firm, the:A.higher the probability that the firm will encounter financial distress.B.lower the a

30、mount of debt incurred.C.less debt a firm has per dollar of total assets.D.higher the number of outstanding shares of stock.E.lower the balance in accounts payable.DBEDAThe accounting manager of Gateway Inns has noted that every time the inns average occupancy rate increases by 2 percent, the operat

31、ing cash flow increases by 5.3 percent. What is the degree of operating leverage if the contribution margin per unit is $47?A.0.38B.0.57C.1.75D.2.10E.2.65 The value of a firm is maximized when the:A.cost of equity is maximized.B.tax rate is zero.C.levered cost of capital is maximized.D.weighted aver

32、age cost of capital is minimized.E.debt-equity ratio is minimized.Under credit terms of 1/5, net 15, customers should:A.always pay on the 15th day.B.take the 5 percent discount and pay immediately.C.take the discount and pay on the day following the day of sale.D.either take the discount or pay on t

33、he 15th day.E.both take the discount and pay on the 15th day.The EOQ model is designed to minimize:A.production costs.B.inventory obsolescence.C.the carrying costs of inventory.D.the costs of replenishing inventory.E.the total costs of holding inventory.You are considering a project that you believe

34、 is quite risky. To reduce any potentially harmful results from accepting this project, you could:A.lower the degree of operating leverage.B.lower the contribution margin per unit.C.increase the initial cash outlay.D.increase the fixed costs per unit while lowering the contribution margin per unit.E

35、.lower the operating cash flow of the project.EDDEAWhich of the following ratios are measures of a firms liquidity?I. cash coverage ratioII. interval measureIII. debt-equity ratioIV. quick ratioA.I and III onlyB.II and IV onlyC.I, III, and IV onlyD.I, II, and III onlyE.I, II, III, and IVThis is cash

36、 flow available for payments to stockholders and debtholders of a firm after the firm has made investments in assets necessary to sustain the ongoing operations of the firm. A.Net income available to common stockholdersB.Cash flow from OperationsC.Net cash flowD.Cash flow from asset18. If a firm has

37、 a debt-equity ratio of 1.0, then its total debt ratio must be which one of the following?A.0.0B.0.5C.1.0D.1.5E.2.0You are doing some comparison shopping. Five stores offer the product you want at basically the same price. Which one of the following stores offers the best credit terms if you plan on

38、 taking the discount? A.store AB.store BC.store CD.store DE.store EWhat will be the approximate population of the United States, if its current population of 280 million grows at a compound rate of 2% annually for 25 years? 413 millionB.430 millionC.460 millionD.488 millionBDBECA business owned by a

39、 solitary individual who has unlimited liability for its debt is called a:A.corporation.B.sole proprietorship.C.general partnership.D.limited partnership.E.limited liability company. Which of the following statements concerning the standard deviation are correct? I. The greater the standard deviatio

40、n, the lower the risk.II. The standard deviation is a measure of volatility.III. The higher the standard deviation, the less certain the rate of return in any one given year.IV. The higher the standard deviation, the higher the expected return.A. I and III onlyB. II, III, and IV onlyC. I, III, and I

41、V onlyD. I, II, and III onlyE. I, II, III, and IVA 6 percent, annual coupon bond is currently selling at a premium and matures in 7 years. The bond was originally issued 3 years ago at par. Which one of the following statements is accurate in respect to this bond today?A.The face value of the bond t

42、oday is greater than it was when the bond was issued.B.The bond is worth less today than when it was issued.C.The yield-to-maturity is less than the coupon rate.D.The coupon rate is greater than the current yield.E.The yield-to-maturity equals the current yield.Which one of the following is a risk t

43、hat applies to most securities?CA.unsystematicB.diversifiableC.systematicD.asset-specificE.totalWhich one of the following terms is defined as the mixture of a firms debt and equity financing?A.working capital managementB.cash managementC.cost analysisD.capital budgetingE.capital structureBBCCEWhich

44、 one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?A.articles of incorporationB.corporate breakdownC.agency problemD.bylawsE.legal liabilityNet working capital is defined as:A.total liabilities minus shareholders equity.B.cu

45、rrent liabilities minus shareholders equity.C.fixed assets minus long-term liabilities.D.total assets minus total liabilities.E.current assets minus current liabilities.The cash flow of a firm which is available for distribution to the firms creditors and stockholders is called the:A.operating cash

46、flow.B.net capital spending.C.net working capital.D.cash flow from assets.E.cash flow to stockholders.A firm has a debt-total asset ratio of 74 percent and a return on total assets of 13 percent. What is the return on equity?A.26 percentB.50 percentC.65 percentD.84 percentE.135 percentShareholders e

47、quity:A.increases in value anytime total assets increases.B.is equal to total assets plus total liabilities.C.decreases whenever new shares of stock are issued.D.includes long-term debt, preferred stock, and common stock.E.represents the residual value of a firm.CEDBEA project has a net present valu

48、e of zero. Which one of the following best describes this project? A. The project has a zero percent rate of return.B. The project requires no initial cash investmentC. The project has no cash flows.D. The summation of all of the projects cash flows is zero.E. The projects cash inflows equal its cas

49、h outflows in current dollar terms.Which one of the following represents the level of output where a project produces a rate of return just equal to its requirement?A.capital break-evenB.cash break-evenC.accounting break-evenD.financial break-evenE.internal break-evenEight months ago, you purchased

50、400 shares of Winston, Inc. stock at a price of $54.90 a share. The company pays dividends of $1 a share. Today, you sold all of your shares for $49.30 a share. What is your total percentage return on this investment? A. -10.2 percentB. -9.3 percentC. -8.4 percentD. 12.0 percentE. 13.4 percentWhich

51、of the following actions help reduce unsystematic risk in a portfolio? I. spreading the retail industry portion of a portfolio over five separate stocksII. combining stocks with bonds in a portfolioIII. adding some international securities into a portfolio of U.S. stocksIV. adding some U.S. Treasury

52、 bills to a risky portfolioA.I and III onlyB.I, II, and IV onlyC.I, III, and IV onlyD.II, III, and IV onlyE.I, II, III, and IVSteele Insulators is analyzing a new type of insulation for interior walls. Management has compiled the following information to determine whether or not this new insulation

53、should be manufactured. The insulation project has an initial fixed asset requirement of $1.3 million, which would be depreciated straight-line to zero over the 12-year life of the project. Projected fixed costs are $742,000 and the anticipated annual operating cash flow is $241,000. What is the deg

54、ree of operating leverage for this project?A.3.78B.3.92C.4.08D.4.27E.4.53 EDCDCRatios that measure a firms financial leverage are known as _ ratios.A.asset managementB.long-term solvencyC.short-term solvencyD.profitabilityE.book valueHigh Mountain Foods has an equity multiplier of 1.55, a total asse

55、t turnover of 1.3, and a profit margin of 7.5 percent. What is the return on equity?A.8.94 percentB.10.87 percentC.12.69 percentD.14.38 percentE.15.11 percentMartin invested $1,000 six years ago and expected to have $1,500 today. He has not added or withdrawn any money from this account since his in

56、itial investment. All interest was reinvested in the account. As it turns out, Martin only has $1,420 in his account today. Which one of the following must be true?A.Martin earned simple interest rather than compound interest.B.Martin earned a lower interest rate than he expected.C.Martin did not ea

57、rn any interest on interest as he expected.D.Martin ignored the Rule of 72 which caused his account to decrease in value.E.The future value interest factor turned out to be higher than Martin expected.A newly issued bond has a 7 percent coupon with semiannual interest payments. The bonds are current

58、ly priced at par value. The effective annual rate provided by these bonds must be:A.3.5 percent.B.greater than 3.5 percent but less than 7 percent.C.7 percent.D.greater than 7 percent.E.Answer cannot be determined from the information provided.Which of the following relationships apply to a par valu

59、e bond?I. coupon rate yield-to-maturityII. current yield = yield-to-maturityIII. market price = call priceIV. market price = face valueA.I and II onlyB.I and III onlyC.II and IV onlyD.I, II, and III onlyE.II, III, and IV onlyBEBDCControl of a firm ultimately rests with the stockholders. TIf a firm has cash flow from assets of $12,000, dividends p