Essay about Finance 320 Final Exam

2597 Words Dec 10th, 2013 11 Pages
Finance 320
Finance Department


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 financial decisions in a corporation, rather than the owners making these decisions themselves?
A) The interests of the various owners may conflict with each other.
B) It is best for the control of the finances of a corporation to be in the hands of
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Luther's operating margin for the year ending December 31, 2005 is closest to:
A) 1.8%
B) 2.7%
C) 5.4%
D) 16.7%
11) Allen Company bought a new copy machine to be depreciated straight line for three years for use by sales personnel. Where would this purchase be reflected on the Statement of Cash Flows?
A) It would be an addition to property, plant and equipment, so it would be an investing activity.
B) It would be an addition to cash, so would be reflected in the change in cash.
C) It would be an expense on the income statement, so it would be reflected in operating cash flows.
D) None of the above answers is correct.
12) If the risk-free rate of interest (rf ) is 6%, then you should be

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