Corporate Finance Essay

768 Words Dec 7th, 2012 4 Pages
1. Which one of the following is a means by which shareholders can replace company management?
A. stock options
B. promotion
C. Sarbanes-Oxley Act
D. agency play
E. proxy fight
2. Decisions made by financial managers should primarily focus on increasing which one of the following?
A. size of the firm
B. growth rate of the firm
C. gross profit per unit produced
D. market value per share of outstanding stock
E. total sales
3. Which one of the following is the financial statement that shows the accounting value of a firm's equity as of a particular date?
A. income statement
B. creditor's statement
C. balance sheet
D. statement of cash flows
E. dividend statement
4. Which one of the following is the financial statement
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D. maximum growth rate achievable excluding any external equity financing while maintaining a constant debt-equity ratio.
E. maximum growth rate achievable with unlimited debt financing.
10. The internal growth rate of a firm is best described as the:
A. minimum growth rate achievable assuming a 100 percent retention ratio.
B. minimum growth rate achievable if the firm maintains a constant equity multiplier.
C. maximum growth rate achievable excluding external financing of any kind.
D. maximum growth rate achievable excluding any external equity financing while maintaining a constant debt-equity ratio.
E. maximum growth rate achievable with unlimited debt financing.
DEDDC
11. What is the present value of $1,100 per year, at a discount rate of 10 percent if the first payment is received 6 years from now and the last payment is received 28 years from now?
A. $6,067.36
B. $6,138.87
C. $6,333.33
D. $6,420.12
E. $6,511.08
12. The current yield is defined as the annual interest on a bond divided by which one of the following?
A. coupon
B. face value
C. market price
D. call price
E. dirty price
13. Currently, the bond market requires a return of 11.6 percent on the 10-year bonds issued by Winston Industries. The 11.6 percent is referred to as which one of the following?
A. coupon rate
B. face rate
C. call rate
D. yield to maturity
E. interest rate
14. Big Falls Tours just paid a dividend of $1.55 per share. The

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