Chapter 17 - Dividends and Dividend Policy
54. Plyler Cabinets declared a dividend of $1.20 a share on May 15 to holders of record on
Monday, June 1. The dividend is payable on June 15. Sara purchased 500 shares of Plyler
Cabinets stock on Friday, May 29.
Chapter 16: Financial Leverage and Capital Structure Policy
1. Question ID#: 96376
Evidence that a firm has high business risk would be provided by its volatile:
A) operating profit.
B) fixed costs.
The correct answer was A.
Exercises on equity valuation
1. The _ is the fraction of earnings reinvested in the firm.
A) dividend payout ratio
B) retention rate
C) plowback ratio
D) A and C
E) B and C
Answer: E Difficulty: Easy
Rationale: Retention rate, or plowback ratio, represen
Capital Asset Pricing
Capital Asset Pricing Model (CAPM)
The capital asset pricing model, or CAPM, was developed
by Treynor, Sharpe, Lintner, and Mossin in the early 1960s,
and further refined later.
The model predicts the relationship between
Multiple Choice Questions
1. The current yield on a bond is equal to _.
A) Annual interest divided by the current market price
Rationale: A is current yield and is quoted as such in the financial press.
2. If a 7% coupon bond is trading for $975.00, it ha
Chapter 08 - Stock Valuation
57. Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today,
the company announced that future dividends will be increasing by 2.6 percent annually. If
you require a 12 percent rate of return, how
Second Semester 2003/2004
The University of Hong Kong
Second Semester 2003/2004
Office Phone :
Prof. Eric C. CHANG
Chapter 09 - Net Present Value and Other Investment Criteria
57. What is the net present value of a project with the following cash flows if the required rate
of return is 12 percent?
Chapter 10 - Making Capital Investment Decisions
47. Kelly's Corner Bakery purchased a lot in Oil City 6 years ago at a cost of $280,000.
Today, that lot has a market value of $340,000. At the time of the purchase, the company
spent $15,000 to level the l
1) 81. The Square Box is considering two projects, both of which have an initial cost of
$35,000 and total cash inflows of $50,000. The cash inflows of project A are $5,000,
$10,000, $15,000, and $20,000 over the next four years, respectively. The cash in
9. Capital Budgeting Example.
Brower, Inc. just constructed a manufacturing plant in Ghana. The construction cost 9 billion Ghanian cedi.
Brower intends to leave the plant open for three years. During the three years of operation, cedi cash flows
Chapter 16 - Financial Leverage and Capital Structure Policy
54. Kelso Electric is debating between a leveraged and an unleveraged capital structure. The
all equity capital structure would consist of 40,000 shares of stock. The debt and equity option
Chapter 11: Project Analysis and Evaluation
1. Question ID#: 98114
The Chief Financial Officer of Large Closeouts Inc. (LCI) determines that the firm must engage in capital
rationing for its capital budgeting projects. Which of the follo
Chapter 14 - Cost of Capital
40. Chelsea Fashions is expected to pay an annual dividend of $0.80 a share next year. The
market price of the stock is $22.40 and the growth rate is 5 percent. What is the firm's cost of
A. 7.58 percent
B. 7.91 percen
Foreign Currency Futures and Options
A major difference between foreign currency futures contracts and forward contracts is
that forward contracts are _.
sold by government agencies
created by banks
Chapter 15 - Raising Capital
53. Aaron's Sailboats has decided to take the company public by offering a total of 120,000
shares of common stock to the public. The firm has hired an underwriter who arranges a full
commitment underwriting and suggests an in
Chapter 17: Dividends and Payout Policy
1. Question ID#: 94899
stock split CF stmt
How would a stock split be reported on the statement of cash flows? A stock split would:
A) not be reported on the statement of cash flows because it is a non-cash event.
Chapter 11 - Project Analysis and Evaluation
Chapter 11 Project Analysis and Evaluation Answer Key
59. Precise Machinery is analyzing a proposed project. The company expects to sell 2,100
units, give or take 5 percent. The expected variable cost per unit
The Foreign Exchange Market
Which of the following markets is comprises the worlds major banks and other financial
The organization of th
29 November 2007
Balance of Payments
Economics | Egypt
Reacting to Growth and Global Turmoil
The Central Bank of Egypt (CBE) released Balance of Payments figures for the first
quarter of FY2007/2008 (July September 2007). The current account registered a
Masters Thesis in Finance
Faculty of Business Administration
- And the Change of Investor Behavior
during and After the Speculative Bubble
At the End of the 1990s
International Flow of Funds
1. Recently, the U.S. experienced an annual balance of trade representing a _.
A) large surplus (exceeding $100 billion)
B) small surplus
C) level of zero
2. A high home inflation rate relative to other cou