公司理财复习题.doc

1、11. Which one of the following is a means by which shareholders can replace company management? A. stock optionsB. promotionC. Sarbanes-Oxley ActD. agency playE. proxy fight2. Decisions made by financial managers should primarily focus on increasing which one of the following? A. size of the firmB.

2、growth rate of the firmC. gross profit per unit producedD. market value per share of outstanding stockE. total sales3. Which one of the following is the financial statement that shows the accounting value of a firms equity as of a particular date? A. income statementB. creditors statementC. balance

3、sheetD. statement of cash flowsE. dividend statement4. Which one of the following is the financial statement that summarizes a firms revenue and expenses over a period of time? A. income statementB. balance sheetC. statement of cash flowsD. tax reconciliation statementE. market value report5. The pe

4、rcentage of the next dollar you earn that must be paid in taxes is referred to as the _ tax rate. A. meanB. residualC. totalD. averageE. marginalEDCAE26. The cash flow of a firm which is available for distribution to the firms creditors and stockholders is called the: A. operating cash flow.B. net c

5、apital spending.C. net working capital.D. cash flow from assets.E. cash flow to stockholders.7. Canine Supply has sales of $2,200, total assets of $1,400, and a debt-equity ratio of 0.3. Its return on equity is 15 percent. What is the net income? A. $138.16B. $141.41C. $152.09D. $156.67E. $161.548.

6、Beach Wear has current liabilities of $350,000, a quick ratio of 1.65, inventory turnover of 3.2, and a current ratio of 2.9. What is the cost of goods sold? A. $980,000B. $1,060,000C. $1,200,000D. $1,400,000E. $1,560,0009. The sustainable growth rate of a firm is best described as the: A. minimum g

7、rowth 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

8、 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

9、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.DEDDC311. W

10、hat 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. $6,067.36B. $6,138.87C. $6,333.33D. $6,420.12E. $6,511.0812. The current yield is defined as the annual interest on a

11、 bond divided by which one of the following? A. couponB. face valueC. market priceD. call priceE. dirty price13. 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 ra

12、teB. face rateC. call rateD. yield to maturityE. interest rate14. Big Falls Tours just paid a dividend of $1.55 per share. The dividends are expected to grow at 30 percent for the next 8 years and then level off to a 7 percent growth rate indefinitely. What is the price of this stock today given a r

13、equired return of 15 percent? A. $67.54B. $69.90C. $72.47D. $77.67E. $78.1915. Hardwoods, Inc. is a mature manufacturing firm. The company just paid a $10 dividend, but management expects to reduce the payout by 9 percent each year, indefinitely. How much are you willing to pay today per share to bu

14、y this stock if you require a 15 percent rate of return? A. $34.79B. $37.92C. $38.27D. $41.33E. $42.09ACDDB416. You are considering the following two mutually exclusive projects. The required rate of return is 14.6 percent for project A and 13.8 percent for project B. Which project should you accept

15、 and why?A. project A; because it has the higher required rate of returnB. project A; because its NPV is about $4,900 more than the NPV of project BC. project B; because it has the largest total cash inflowD. project B; because it has the largest cash inflow in year oneE. project B; because it has t

16、he lower required return17. Which of the following are correct according to pecking-order theory?I. Firms stockpile internally-generated cash.II. There is an inverse relationship between a firms profit level and its debt level.III. Firms avoid external debt at all costs.IV. A firms capital structure

17、 is dictated by its need for external financing. A. I and III onlyB. II and IV onlyC. I, III, and IV onlyD. I, II, and IV onlyE. I, II, III, and IV18. The optimal capital structure: A. will be the same for all firms in the same industry.B. will remain constant over time unless the firm changes its p

18、rimary operations.C. will vary over time as taxes and market conditions change.D. places more emphasis on operations than on financing.E. is unaffected by changes in the financial markets.519. Which one of the following statements related to stock repurchases is correct? A. U.S. industrial firms hav

19、e increased their stock repurchases every year for each of the past twenty years.B. A stock repurchase can be used as a means for incumbent officers to retain control of a firm.C. A tender offer indicates that a firm is willing and able to purchase how ever many shares the current shareholders wish

20、to sell.D. All stock repurchases must be identified as such to the selling party.E. Stock repurchases can be a relatively tax-efficient method of distributing cash to shareholders.20. Which of the following tend to keep dividends low?I. shareholders desiring current incomeII. terms contained in bond

21、 indenture agreementsIII. the desire to maintain constant dividends over timeIV. flotation costs A. II and III onlyB. I and IV onlyC. II, III, and IV onlyD. I, II, and III onlyE. I, II, III, and IVBDCEC21. Which of the following will increase the expected rate of return on an individual security as

22、computed by the Capital Asset Pricing Model (CAPM)? Assume that the securitys beta, the risk-free rate of return, and the market rate of return are all positive. I. a decrease in the securitys betaII. an increase in the securitys betaIII. a decrease in the risk premiumIV. an increase in the market r

23、ate of returnA. I and III onlyB. II and IV onlyC. I and IV onlyD. II and III onlyE. II, III, and IV only22. A stakeholder is: A. a person who owns shares of stock.B. any person who has voting rights based on stock ownership of a corporation.C. a person who initially founded a firm and currently has

24、management control over that firm.D. a creditor to whom a firm currently owes money.E. any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm.23. A business created as a distinct legal entity and treated as a legal “person“ is called a: 6A.

25、corporation.B. sole proprietorship.C. general partnership.D. limited partnership.E. unlimited liability company.24. Which of the following accounts are included in working capital management?I. accounts payableII. accounts receivableIII. fixed assetsIV. inventory A. I and II onlyB. I and III onlyC.

26、II and IV onlyD. I, II, and IV onlyE. II, III, and IV only25. Which one of the following best states the primary goal of financial management? A. maximize current dividends per shareB. maximize the current value per shareC. increase cash flow and avoid financial distressD. minimize operational costs

27、 while maximizing firm efficiencyE. maintain steady growth while increasing current profitsBEADB26. Noncash items refer to: A. accrued expenses.B. inventory items purchased using credit.C. the ownership of intangible assets such as patents.D. expenses which do not directly affect cash flows.E. sales

28、 which are made using store credit.27. Which of the following are current assets?I. patentII. InventoryIII. accounts payableIV. cash A. I and III onlyB. II and IV onlyC. I, II, and IV onlyD. I, II and III onlyE. II, III, and IV only28. Which one of the following is a type of equity security that has

29、 a fixed dividend and a priority status over other equity securities? A. Senior bondB. DebentureC. WarrantD. Common stock7E. Preferred stock29. An investment is acceptable if its IRR: A. is exactly equal to its net present value (NPV).B. is exactly equal to zero.C. is less than the required return.D

30、. exceeds the required return.E. is exactly equal to 100 percent.30. The higher the degree of financial leverage employed by a firm, the: A. higher the probability that the firm will encounter financial distress.B. lower the amount of debt incurred.C. less debt a firm has per dollar of total assets.

31、D. higher the number of outstanding shares of stock.E. lower the balance in accounts payable.DBEDA31. The accounting manager of Gateway Inns has noted that every time the inns average occupancy rate increases by 2 percent, the operating cash flow increases by 5.3 percent. What is the degree of opera

32、ting leverage if the contribution margin per unit is $47? A. 0.38B. 0.57C. 1.75D. 2.10E. 2.65 32. The value of a firm is maximized when the: A. cost of equity is maximized.B. tax rate is zero.C. levered cost of capital is maximized.D. weighted average cost of capital is minimized.E. debt-equity rati

33、o is minimized.33. Under credit terms of 1/5, net 15, customers should: A. always pay on the 15th day.B. take the 5 percent discount and pay immediately.C. take the discount and pay on the day following the day of sale.D. either take the discount or pay on the 15th day.E. both take the discount and

34、pay on the 15th day.34. The EOQ model is designed to minimize: A. production costs.B. inventory obsolescence.C. the carrying costs of inventory.D. the costs of replenishing inventory.E. the total costs of holding inventory.35. You are considering a project that you believe is quite risky. To reduce

35、any potentially harmful results from accepting this project, you could: A. lower the degree of operating leverage.B. lower the contribution margin per unit.C. increase the initial cash outlay.8D. increase the fixed costs per unit while lowering the contribution margin per unit.E. lower the operating

36、 cash flow of the project.EDDEA36. Which of the following ratios are measures of a firms liquidity?I. cash coverage ratioII. interval measureIII. debt-equity ratioIV. quick ratio A. I and III onlyB. II and IV onlyC. I, III, and IV onlyD. I, II, and III onlyE. I, II, III, and IV37. This is cash flow

37、available for payments to stockholders and debtholders of a firm after the firm has made investments in assets necessary to sustain the ongoing operations of the firm. A. Net income available to common stockholdersB. Cash flow from OperationsC. Net cash flowD. Cash flow from asset38. 18. If a firm h

38、as a debt-equity ratio of 1.0, then its total debt ratio must be which one of the following? A. 0.0B. 0.5C. 1.0D. 1.5E. 2.039. You are doing some comparison shopping. Five stores offer the product you want at basically the same price. Which one of the following stores offers the best credit terms if

39、 you plan on taking the discount?A. store AB. store BC. store CD. store DE. store E40. What will be the approximate population of the United States, if its current population of 280 million grows at a compound rate of 2% annually for 25 years? A. 413 millionB. 430 million9C. 460 millionD. 488 millio

40、nBDBEC41. A business owned by a solitary individual who has unlimited liability for its debt is called a: A. corporation.B. sole proprietorship.C. general partnership.D. limited partnership.E. limited liability company.42. Which of the following statements concerning the standard deviation are corre

41、ct? I. The greater the standard deviation, the lower the risk.II. The standard deviation is a measure of volatility.III. The higher the standard deviation, the less certain the rate of return in any one given year.IV. The higher the standard deviation, the higher the expected return.A. I and III onl

42、yB. II, III, and IV onlyC. I, III, and IV onlyD. I, II, and III onlyE. I, II, III, and IV43. A 6 percent, annual coupon bond is currently selling at a premium and matures in 7 years. The bond was originally issued 3 years ago at par. Which one of the following statements is accurate in respect to th

43、is bond today? A. The face value of the bond today is greater than it was when the bond was issued.B. The bond is worth less today than when it was issued.C. The yield-to-maturity is less than the coupon rate.D. The coupon rate is greater than the current yield.E. The yield-to-maturity equals the cu

44、rrent yield.44. Which one of the following is a risk that applies to most securities? CA. unsystematicB. diversifiableC. systematicD. asset-specificE. total45. Which one of the following terms is defined as the mixture of a firms debt and equity financing? A. working capital managementB. cash manage

45、mentC. cost analysisD. capital budgetingE. capital structureBBCCE46. Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers? A. articles of incorporation10B. corporate breakdownC. agency problemD. bylawsE. legal liability47

46、. Net working capital is defined as: A. total liabilities minus shareholders equity.B. current liabilities minus shareholders equity.C. fixed assets minus long-term liabilities.D. total assets minus total liabilities.E. current assets minus current liabilities.48. The cash flow of a firm which is av

47、ailable for distribution to the firms creditors and stockholders is called the: A. operating cash flow.B. net capital spending.C. net working capital.D. cash flow from assets.E. cash flow to stockholders.49. A firm has a debt-total asset ratio of 74 percent and a return on total assets of 13 percent

48、. What is the return on equity? A. 26 percentB. 50 percentC. 65 percentD. 84 percentE. 135 percent50. Shareholders equity: A. increases in value anytime total assets increases.B. is equal to total assets plus total liabilities.C. decreases whenever new shares of stock are issued.D. includes long-ter

49、m debt, preferred stock, and common stock.E. represents the residual value of a firm.CEDBE51. A project has a net present value of zero. Which one of the following best describes this project? A. The project has a zero percent rate of return.B. The project requires no initial cash investmentC. The project has no cash flows.D. The summation of all of the projects cash flows is zero.E. The projects cash inflows equal its cash outflows in current dollar terms.