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# PracticeExam - Semester 1, 2010 SURNAME: _ Page 1 of 8...

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Semester 1, 2010 Page 1 of 8 SURNAME: ______________________ FIRST NAME/S: _______________________ SID NUMBER: ________________________ Discipline of Finance FINC 2011 CORPORATE FINANCE 1 Early Semester Quiz Semester one Thursday Exam 1 April 2010 Time Allowed: 40 minutes Format: A total of 20 multiple choice questions each worth one (1) mark This exam constitutes 20% of your overall grave Instructions : Fill in the circle for the most correct answer on the answer sheet provided. Use pencil only. Authorised Material: 1. Non-programmable calculator 2. Pencil 3. Eraser 4. Pencil Sharpener 5. Student ID Card NO PART OF THIS PAPER IS TO BE REMOVED FROM THE EXAMINATION ROOM

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Semester 1, 2010 Page 2 of 8 Corporate Finance 2011 Formula Sheet t n t t r X FV ) 1 ( 1 + = = e t r d P = n r FV PV ) 1 ( + = g r d P e t - = 1 Effective rate = 1 1 - + m nom m r ROE ratio payout g × - = ) 1 ( PV = t t n t r X ) 1 ( 1 + = FV = t n t t r X ) 1 ( 1 + = FV = - + r r A n 1 ) 1 ( PV = + - - r r A n ) 1 ( 1 PV = r A FV = rt PVe PV = rt FVe - V= D+E D = n d n t t d r B r F ) 1 ( ) 1 ( 1 + + + =
Page 3 of 8 1. What is the corporate objective? a) To minimise shareholder wealth b) To maximise shareholder wealth c) To minimise the cost of capital d) To maximise Profit e) None of the above 2. Over 2008-2009, companies across Australia undertook significant and dilutive capital raisings due to an inability to rollover debt. What type of decision does this relate to? a) Dividend b) Investment c) Financing d) Both B) and C) e) None of the above 3. On 3 March 2010 shares in book retailer Fictional Ltd closed at \$3.21, giving Fictional Ltd a market capitalisation of \$64.2m. Next day the same shares closed at \$3.05 and Fictional's market capitalisation was \$61.0m. The one day rate of return on Fictional shares may be correctly calculated as: a) (\$3.05 / \$3.21 ) - 1 b) (\$3.05 - \$3.21) / \$3.21 c) (\$61.0m / \$64.2m ) – 1 d) a) and b) e) All of the above 4. How much would you need to put in the bank today to have 50,000 in 45 years time if the interest rate is expected to be 10% p.a. compounded annually? a)

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## This note was uploaded on 05/29/2011 for the course FINC 2011 taught by Professor Craigmellare during the Three '10 term at University of Sydney.

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PracticeExam - Semester 1, 2010 SURNAME: _ Page 1 of 8...

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