Name:
BADM 3501: Midterm 3
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Multiple Choice
Identify the choice that best completes the statement or answers the question.
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2.
12:
A firm is considering a new project whose risk is greater
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mnaneial Nlanagement: Nlidterm l (:1 (1111:1810 Y\SKX
Multiple Choice
Identify the choice that best completes the statement or answers the question.
A 1. Which of the following factors could explain why Michigan Energy's gaggbalance in
Chapter 3 SelfTest
Definitional Questions
1. Of all its communications with shareholders, a firms _ report is generally the
most important.
2. The income statement reports the results of operations during the past year, the
most important item being _ pe
Dubin
Booknotes
Chap 1 An overview of financial management
Figure 1.1 pg 5
Finance grew from economics and accounting
Sarbanes Oxley act a law passed by congress tat requires te CWO and CFO to
certify that thiere frims financial statements are accurat
Chapter 4 SelfTest
Definitional Questions
1. _ ratios are the category of ratios used to measure a firms ability to meet its current
obligations as they come due.
2. The _ ratio measures the extent to which current liabilities are covered by current asse
Chapter 12 SelfTest
Definitional Questions
1. An increase in net operating working capital would show up as a cash _ at
Time 0 and then again as a cash _ at the _ of the projects life.
2. A(n) _ cost is a cash outlay that has already been incurred and th
Chapter 7 Homework Solutions
73
The problem asks you to find the price of a bond, given the following facts: N = 2 8 = 16;
I/YR = 8.5/2 = 4.25; PMT = (0.09/2) 1,000 = 45; FV = 1000.
With a financial calculator, solve for PV = $1,028.60.
75
a. 1. 5%: Bon
Chapter 5 Homework Solutions
55
0
1


PV = 42,180.535,000
2

5,000
N2

5,000
N1

5,000
N

FV = 250,000
Using your financial calculator, enter the following data: I/YR = 12; PV = 42180.53; PMT
= 5000; FV = 250000; N = ? Solve for N = 11. It will tak
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BADM 3501: Midterm 2 Christo Pirinsky
Multiple Choice
Identil the choice that best completes the statement or answers the question.
1. Which of the following statements is CORRECT?
TEST 2, BADM 3501 FINANCE FALL 2012 D
3
1. Which approach estimates NPV by changing the value of several assumptions at once to represent possible
outcomes of the project?
a. Forecasting Simulation
in. Monte Carlo simulation
c. Sensitivity analysis
14. Super Computer Company's stock is selling for 100 per share
today. It is expected that this stock will pay a dividend of 5 dollars
per share, and then be sold for $120 per share at the end of one year.
Calculate the expected rate of return for the s
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BADM 3501, Fall 2012
YOURNAME UM 9W
All interest rates are annual unless otherwise stated, all payments are at the end of
the period unless otherwise stated.
1. What is the present value of a perpetuity with an ann
Chapter 12 Homework Solutions
121
a. Equipment purchase
NOWC investment
Initial investment outlay
($ 9,000,000)
(3,000,000)
($12,000,000)
b. No, last years $50,000 expenditure is considered a sunk cost and does not represent
an incremental cash flow. Hen
Chapter 1 Self Test
Definitional Questions
1. Proprietorships are easily formed, but often have difficulty raising _, they
subject proprietors to unlimited _, and they have a limited _.
2. A partnership is dissolved upon the withdrawal or _ of any one of
Chapter 11 SelfTest
Definitional Questions
1. A firms _ budget outlines its planned expenditures on fixed assets.
2. The number of years necessary to return the original investment in a project is
known as the _ period.
3. The shorter the payback period,
DIV POLICY
DIV THEORIES
RESID DIV MODEL
DRIPs
STK DIV & SPLT
STK REPURCH
Chapter 14
Distributions to Shareholders
Dividend Policy
Dividend Theories
Residual Dividend Model
Dividend Reinvestment Plans (DRIPs)
Stock Dividends and Stock Splits
Stock Repurcha
BUSINESS RISK
OPER LEVERAGE
FINANCIAL RISK
OPT CAP STRUCT
CAP STRUCT THEORY
Chapter 13
Capital Structure and Leverage
Business Risk
Operating Leverage
Financial Risk
Optimal Capital Structure
Capital Structure Theory
131
Capital Structure
Capital refers