54. The empirical evidence strongly indicates that the stockholders of the target firm realize large
wealth gains as a result of a takeover bid but the stockholders in the acquiring firm gain little,
17.
Standard deviation measures _ risk.
A. total
B. nondiversifiable
C. unsystematic risk
D. systematic risk
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Learning Objective: 11-02 Expected Ret
44. Jake's Sound Systems has 210,000 shares of common stock outstanding at a market price of
$36 a share. Last month, Jake's paid an annual dividend in the amount of $1.593 per share. The
dividend gro
12.
Excelsior shares are currently selling for $25.00 each. You bought 200 shares one year ago at
$24 and received dividend payments of $1.50 per share. What was your percentage capital
gain this yea
40.
Owers Divestiture Corporation, a firm speculating in corporate reorganizations, has bonds
outstanding that were originally issued at par but are now selling, on September 19, 2012, for
$1,050 per
15.
The Mini-Max Company has the following cost information on their new prospective project.
Fixed costs are $200/year. (Initial investment is $700).
Variable costs: $3/unit.
Depreciation: $140/year
68. If you invest $100,000 today at 12% per year over the next 15 years, what is the most you can
spend in equal amounts out of the fund each year over that time.
69. What is meant by "amortizing a lo
15. You have plotted the data for two securities over time on the same graph, ie., the month return of
each security for the last 5 years. If the pattern of the movements of the two securities rose an
50. The Nantucket Nugget is unlevered and is valued at $640,000. Nantucket is currently deciding
whether including debt in their capital structure would increase their value. Under consideration is
is
35.
The separation theorem in financial markets is fundamental to allowing managers to maximize
all shareholders wealth. Explain the separation theorem and how the financial markets provide
for all d
21.
Ronnie's Coffee House is considering a project which will produce sales of $6,000 and
increase cash expenses by $2,500. If the project is implemented, taxes will increase by
$1,300. The additiona
24. An industry is likely to have a low beta if the:
A. stream of revenues is unstable than the market.
B. economy is in an expansion.
C. market for its goods is affected by the market cycle.
D. strea
23.
What is the conversion value of the bond?
A. $25
B. $770
C. $40
D. $1000
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Learning Objective: 25-05 The Value of Convertible Bonds
Ross - Chap
41.
A firm is all equity with 5,000 shares outstanding worth $7 each. They are planning on issuing
$10,000 of new perpetual debt at the 8% market rate of interest. The effective tax rate is 25%.
What
39.
Firm A is paying $750,000 in interest payments a year while Firm B is paying LIBOR plus 75
basis points on $10,000,000 loans. The current LIBOR rate is 6.5%. Firm A and B have
agreed to swap inte
Chapter 7 Key
1.
A $25 investment produces $27.50 at the end of the year with no risk. Which of the following is
not true?
A. NPV is positive if the interest rate is less than 10%.
B. NPV is negative
26.
Using the internal rate of return rule, a conventional project should be accepted if the internal
rate of return is:
A. only equal to the current weighted average cost of capital.
B. greater than
2. Accepting positive NPV projects benefits the stockholders because:
A. it most easily understood valuation process.
B. the value of the expected cashflows are equal to the cost.
C. the value of the
47.
The common stock of Eddie's Engines Corp. sells for $25.71 a share. The stock is expected to
pay $1.80 per share next month when the annual dividend is distributed. Eddie's has
established a patt
43.
Bruno's, Inc. is analyzing two machines to determine which one it should purchase. The
company requires a 14% rate of return and uses straight-line depreciation to a zero book
value. Machine A ha
39.
Alabaster Incorporated has a beta of 1.05, a cost of debt of 8% and a debt to value ratio of .7.
The current risk free rate is 3% and the market rate of return is 12.5%. What is the company's
cos
9.
You can realize the same value as that derived from stock ownership if you:
A. sell a put option and invest at the risk-free rate of return.
B. buy a call option and write a put option on a stock
27.
When making financial decisions related to assets, you should:
A. always consider market values.
B. place more emphasis on book values than on market values.
C. rely primarily on the value of ass
29.
A firm has a debt-to-equity ratio of 1.20. If it had no debt, its cost of equity would be 15%. Its
cost of debt is 10%. What is its cost of equity if there are no taxes or other imperfections?
A.
27. The Tip-Top Paving Co. has a beta of 1.11, a cost of debt of 11% and a debt to value ratio of .6.
The current risk free rate is 9% and the market rate of return is 16.18%. What is the company's
co
23. The two fatal flaws of the internal rate of return rule are:
A. arbitrary determination of a discount rate and failure to consider initial expenditures.
B. arbitrary determination of a discount ra
60. Eyes of the World Corporation has traditionally employed a firm wide discount rate for capital
budgeting purposes. However, its two divisions - publishing and entertainment - have different
degree
23. Including the option to expand in your project analysis will tend to:
A. extend the duration of a project but not affect the project's net present value.
B. increase the net present value of a pro
47.
A stock has returns of 3%, 18%, -24%, and 16% for the past four years. Based on this
information, what is the 95% probability range for any one given year?
-35.4 to 41.9%
Average return = (.03 +
49.
What is the present value of 10 payments of $500 each received every 24 months at a
discount rate of 12%?
A. $1,840.93
B. $1,332.60
C. $2,825.11.
D. $1,761.66
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EL MISTERIO DE
LISTERDALE
Agatha Christie
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CAPITULO PRIMERO
La seora Saint Vincent estaba sumando. De
El cuarto Hombre
Agatha Christie
El cannigo Parfitt jadeaba. El correr para alcanzar el tren no era cosa que conviniera a
un hombre de sus aos. Su figura ya no era lo que fue y con la prdida de su esb
La muchacha del tren
Agatha Christie
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Eso es! observ Jorge Rowland con rencor contemplando la
imponent
EL TESTIGO MUDO
Agatha Christie
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GUA DEL LECTOR
En un orden alfabtico convencional r