Exam1-A FIN470 Winter 2008 Key

Exam1-A FIN470 Winter 2008 Key - Exam1-A FIN470 Winter 2008...

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Exam1-A FIN470 Winter 2008 Key 1. A partnership: a. agreement defines whether the business income will be taxed like a partnership or a corporation. B. terminates at the death of any general partner. c. can consist solely of limited partners. d. is taxed the same as a corporation. e. has less of an ability to raise capital than a sole proprietorship. Ross - Chapter 001 #34 SECTION: 1.2 TOPIC: PARTNERSHIP TYPE: CONCEPTS 2. The annual coupon payment divided by the market price of a bond is called the: A. current yield. b. capital gains yield. c. bid-ask spread. d. yield to maturity. e. coupon rate. Ross - Chapter 007 #6 SECTION: 7.1 TOPIC: CURRENT YIELD TYPE: DEFINITIONS 3. An unsecured debt of a firm with a maturity of 10 years or more is called a(n): Ross - Chapter 007 #10 SECTION: 7.2 TOPIC: DEBENTURE TYPE: DEFINITIONS
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4. The mix of debt and equity capital for a firm is referred to as the firm's: Ross - Chapter 001 #4 SECTION: 1.1 TOPIC: CAPITAL STRUCTURE TYPE: DEFINITIONS 5. Thirty years ago, your father invested $11,000. Today, that investment is worth $287,047. What is the average annual rate of return your father earned on his investment? $287,047 = $11,000 (1 + r) 30 ; r = 11.49 percent AACSB TOPIC: ANALYTIC Ross - Chapter 005 #28 SECTION: 5.3 TOPIC: INTEREST RATE FOR MULTIPLE PERIODS TYPE: PROBLEMS 6. Which one of the following is a source of cash? a. a decrease in common stock b. a decrease in accounts payable c. an increase in accounts receivable d. a dividend distribution E. an increase in long-term debt Ross - Chapter 003 #38 SECTION: 3.1 TOPIC: SOURCES OF CASH TYPE: CONCEPTS
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7. The secondary market is the market in which: Ross - Chapter 001 #18 SECTION: 1.5 TOPIC: SECONDARY MARKET TYPE: DEFINITIONS 8. The discount rate that makes the net present value of an investment exactly equal to zero is called the: Ross - Chapter 009 #6 SECTION: 9.5 TOPIC: INTERNAL RATE OF RETURN TYPE: DEFINITIONS
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