Exam3 FIN370 Winter 2009 - B Key

# Exam3 FIN370 Winter 2009 - B Key - Exam3 FIN370 Winter 2009...

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Exam3 FIN370 Winter 2009 Key Version B 1. One year ago, you purchased 200 shares of stock for \$29 a share. The stock pays \$.60 a share in dividends each year. Today, you sold your shares for \$31.60 a share. What is your total dollar return on this investment? a. \$480 b. \$670 c. \$610 D. \$640 e. \$520 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 010 #44 SECTION: 10.1 TOPIC: DOLLAR RETURN TYPE: PROBLEMS 2. The amount of systematic risk present in a particular risky asset relative to that in an average risky asset is called the: a. mean. B. beta coefficient. c. risk premium. d. standard deviation. e. variance. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 3 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 011 #8 SECTION: 11.6 TOPIC: BETA COEFFICIENT TYPE: DEFINITIONS

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3. Huckster's is reviewing its current accounts to determine how a proposed project might affect the account balances. The firm estimates the project will initially require \$86,000 in current assets and \$69,000 in additional current liabilities. The firm also estimates the project will require an additional \$9,000 a year in current assets for each one of the five years of the project. How much net working capital will the firm recoup at the end of the project assuming that all net working capital can be recaptured? a. \$62,000 b. \$17,000 C. \$62,000 d. \$28,000 e. \$17,000 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 2 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 009 #55 SECTION: 9.2 TOPIC: NET WORKING CAPITAL TYPE: PROBLEMS 4. The return on a risky asset that is anticipated in the future is called the: a. real return. b. risk premium. c. systematic return. D. expected return. e. beta. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 011 #1 SECTION: 11.1 TOPIC: EXPECTED RETURN TYPE: DEFINITIONS
5. Which of the following will increase the sustainable growth rate of a firm? I. eliminating all dividends II. increasing the target debt-equity ratio III. increasing the profit margin IV. increasing the total asset turnover rate a. I, III, and IV only B. I, II, III, and IV c. I, II, and III only d. I and II only e. II, III, and IV only BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 3 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 003 #32 SECTION: 3.4 TOPIC: SUSTAINABLE GROWTH RATE TYPE: CONCEPTS 6. Truman Florists pays a constant annual dividend of \$2.20 per share on its stock. Last year at this time, the market rate of return on this stock was 12.6 percent. Today, the market rate has fallen to 9.7 percent. What would your capital gains yield have been if you had purchased this stock one year ago and then sold the stock today? A.

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Exam3 FIN370 Winter 2009 - B Key - Exam3 FIN370 Winter 2009...

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