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(TCO 2) The purpose of the required rate of return is intended to provide investors: (Points : 3) compensation for expected inflation. a premium for...

(TCO 2) The purpose of the required rate of return is intended to provide investors: (Points : 3)
compensation for expected inflation.
a premium for risk assumed.
a minimum real rate of return.
all of the above


(TCO 2) Which of the following would most likely affect the P/E ratio of the market in general? (Points : 3)
A significant change in government fiscal policy
Declining earnings of the S&P 500 companies
Investors' expectations about inflation changes and becomes either more positive or more negative.
All of the above could have a significant impact.


(TCO 2) The ________ does not represent continuing operations in any way but is simply a snapshot of the total worth of a firm at a given point in time. (Points : 3)
income statement
balance sheet
source and use of funds statement
statement of cash flows


(TCO 2) Asset-utilization ratios measure: (Points : 3)
productivity of fixed assets in terms of sales.
the relationship of sales on the income statement to various assets on the balance sheet.
the firm's ability to pay off short-term obligations as they come due.
all of the above


(TCO 2) A high payout ratio indicates that: (Points : 3)
a firm is investing heavily in plant and equipment.
a firm has high current obligations.
the firm is probably in the mature phase of its life cycle and does not have many growth opportunities available.
the firm is probably in Stage II of its life cycle.

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Finance-8228840.doc

(TCO 2) The purpose of the required rate of return is intended to provide investors:
(Points : 3)
Compensation for expected inflation
A premium for risk assumed
A minimum real rate of return
All of...

Sign up to view the full answer

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