Finance Exam - 1676 Words

FINAL EXAM 1. The accounting measure of a firms equity value generated by applying accounting principles to asset and liability acquisitions is called ________. A. book value 2. New-economy companies generally have higher _______ than old-economy companies. B. P/E multiples 3. Earnings yields tend to _______ when Treasury yields fall. A. fall 4. A firm that has an ROE of 12% is considering cutting its dividend payout. The stockholders of the firm desire a dividend yield of 4% and a capital gain yield of 9%. Given this information which of the following statement(s) is/are correct? I. All else equal the firms growth rate will accelerate after the payout change II. All else equal the firms stock price will go up after the†¦show more content†¦The stocks required return is 14%. What is the intrinsic value of a share today? C. $19.24 22. You purchase one IBM July 120 put contract for a premium of $3. You hold the option until the expiration date when IBM stock sells for $123 per share. You will realize a ______ on the investment. B. $300 loss 23. You sell one Hewlett Packard August 50 call contract and sell one Hewlett Packard August 50 put contract. The call premium is $1.25 and the put premium is $4.50. Your strategy will pay off __________ in August. B. only if the stock price is between $44.25 and $55.75 24. The current stock price of Alcoa is $70 and the stock does not pay dividends. The instantaneous risk free rate of return is 6%. The instantaneous standard deviation of Alcoas stock is 40%. A put option on this stock with an exercise price of $75 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold __________ shares of stock per 100 put options to hedge your risk. C. 69 25. A(n) ______ option can only be exercised on the expiration date. D. European 26. At contract maturity the value of a call option is ___________ where X equals the options strike price and ST is the stock price at contract expiration. A. Max(0, ST - X) 27. An Asian call option gives its holder the right to ____________. B. buy the underlying asset at a price determined by the average stock price during some specified portion of the options life 28. AShow MoreRelatedInternational Finance Exam4417 Words   |  18 PagesInternational finance FIN 412 Exam #2 MC:  Examples of single-currency interest rate swap and cross-currency interest rate swap are:   A.  fixed-for-floating rate interest rate swap, where one counterparty exchanges the interest payments of a floating- rate debt obligations for fixed-rate interest payments of the other counter party B.  fixed-for-fixed rate debt service (currency swap), where one counterparty exchanges the debt service obligations of a bond denominated in one currency forRead MoreFinance 455 exam Essay1544 Words   |  7 PagesName:__________________________________________________________________ Class:______________________________________ Date:____________________ Finance 455 (9:40 class) Examination 2 Monday, November 4, 2013 9:40 a.m. - 10:55 p.m. 20 Questions 100 points Form (A) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Use a pencil. The proctor is leaving at 10:55 sharp. 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(TCO A) One of our lectures discusses the budget execution stage of the budget cycle. Please identify and explain each of the major steps in the budget execution process. (Points : 25) 2. (TCO D) Property taxes receive a number of complaints from some taxpayers and many politicians. Please identify at least three ofRead MoreIntro to Finance Final Exam1002 Words   |  5 PagesMBA 600 FINAL EXAM 1. (20 POINTS) The accounting staff at Moonbeam Enterprises prepares monthly financial statements. At the end of April 2004 the company had the following account balances: Land $45,000 Notes payable $33,000 Merchandise inventory $12,480 Buildings $50,000 Cash $10,360 Capital Stock $38,770 Retained earnings, April 30 $46,070 Salary expense $15,050 Sales revenue $26,000 Supplies expense $Read MoreFinance Exam 1 Essay2487 Words   |  10 PagesBottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form 1. Which of the following is the fundamental accounting equation? Assets = Liabilities + Owners equity 2. On December 31, 2004, Track Record Inc.s salesRead MoreFinance 320 Final Exam2599 Words   |  11 PagesSampleFinal Finance 320 Finance Department Name___________________________________ Chapters: 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, and 13 1) A C corporation earns $4.50 per share before taxes. The corporate tax rate is 35%, the personal tax rate on dividends is 20%, and the personal tax rate on non-dividend income is 39%. What is the total amount of taxes paid if the company pays a $2.00 dividend? A) $2.48 B) $1.98 C) $0.90 D) $1.58 2) Why in general do financial managers make financialRead MoreFinance 486 Final Exam Essay1460 Words   |  6 Pagesï » ¿ Finance 486 Final Exam 1. EFN Calculation – 25 points The most recent Financial Information for Golf Pro Inc. are shown here: Income Statement Balance Sheet Sales $3,400 Current Assets $4,400 Current Liabilities $880 Costs 2,800 Fixed Assets 5,700 Long Term Debt 3,580 Taxable Income 600 Read MoreExam 2 Finance 470 Key3075 Words   |  13 PagesExam 2 Finance 470 1. When is EAC analysis appropriate for comparing two or more projects? Why is this method used? Are there any implicit assumptions required by this method that you find troubling? Explain. The EAC approach is appropriate when comparing mutually exclusive projects with different lives that will be replaced when they wear out. This type of analysis is necessary so that the projects have a common life span over which they can be compared; in effect, each project is assumedRead MoreEssay on Managerial Finance Final Exam1361 Words   |  6 PagesWhich of the following is  NOT  normally regarded as being a barrier to hostile takeovers?  (Points : 5) |   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Abnormally high executive compensation   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Targeted share repurchases   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Shareholder rights provisions   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Restricted voting rights   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Poison pills | 2.  (TCO F) Which of the following statements is correct?  (Points : 5) |   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  The MIRR and NPV decision criteria can never conflict.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  The IRR method can never be subject to the multiple IRR problem, while