Study Guide - The par value of the common stock is $1 per share 1 What is the amount of the net cash from investment activity for 2007 A B C D E 2

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* The par value of the common stock is $1 per share.
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1. What is the amount of the net cash from investment activity for 2007? A. B. C. D. E. 2. A firm has total debt of $1,850 and a debt- equity ratio of .64. What is the value of the total assets? A. B. C. D. E. 3. A firm has net working capital of $2,580, net fixed assets of $13,120, sales of $22,580, and current liabilities of $1,610. How many dollars worth of sales are generated from every $1 in total assets? A. B. C. D. E. 4. The price-sales ratio is especially useful when analyzing firms that have: A. B. C. D. E.
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5. Steubenville Liquidators wants to raise $6.2 million to expand their business. To accomplish this, they plan to sell 20-year, $1,000 face value, zero-coupon bonds. The bonds will be priced to yield 9.5 percent. What is the minimum number of bonds they must sell to raise the $6.2 million they need? A. B. C. D. E. 6. The break-even tax rate between a taxable corporate bond yielding 6.5 percent and a comparable nontaxable municipal bond yielding 4 percent can be expressed as: A. B. C. D. E. 7. Atlas Movers is issuing $1,000 face value zero coupon bonds at a quoted price of 38.70. What is the amount you would pay to purchase one of these bonds? A. B. C. D. E.
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8. The current yield on Martin's Mills common stock is 3.6 percent. The company just paid a $1.80 dividend and plans to pay $1.86 next year. The dividend growth rate is expected to remain constant at the current level. What is the required rate of return on this stock? A. B. C. D. E. 9. The common stock of Ruby Janes pays a constant annual dividend. Thus, the market price of Ruby Janes stock will: A. B. C. D. E. 10. Berber Mills has a capital structure which includes bonds, preferred stock, and common stock. The firm's common stock shareholders are most to apt to have which of the following rights? I. right to all the corporate profits II. sole right to elect the corporate directors III. right to vote on proposed mergers IV. right to the residual assets in a liquidation A. B. C. D. E.
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11. Last week, Northern Railways paid an annual dividend of $2.44 per share. The company has been reducing the dividends by 15 percent each year. How much are you willing to pay to purchase stock in this company if your required rate of return is 16 percent? A.
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This note was uploaded on 12/05/2010 for the course FINANCE 1997 taught by Professor Chan during the Spring '10 term at HKU.

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Study Guide - The par value of the common stock is $1 per share 1 What is the amount of the net cash from investment activity for 2007 A B C D E 2

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