tmd什么意思Corporate Finance (1 Assessment)

2021年1月22日发(作者：熹微)
Corporate Finance
1
of 24
A firm's before-tax costs of debt, preferred stock, and equity are 12%, 17%, and 20%
respectively. Assuming equal funding from each source and a marginal tax rate of 40%, the
weighted average cost of capital (%) is
closest
to:
13.9%.


14.7%.


9.8%.



2
of 24
The following data apply to two comparable companies that are in direct competition.


Times interest earned
ratio
Return on equity (ROE)
Return on assets (ROA)
Asset turnover
Company A

2.50
10.13%
6.75%
1.50
Company B

2.50
16.88%
11.25%
2.50
Which of the following statements is
most
accurate?
Company A has a higher degree of financial leverage than Company B.


Company A has a lower net profit margin.


Both companies have the same amount of interest expense.


3
of 24
A company recently issued a 10-year, 6% semiannual coupon bond for $$864. The bond has a
maturity value of $$1,000. If the marginal tax rate is 35%, the after-tax cost of debt (%)
is
closest
to:
3.9%.


5.2%.


2.6%.


4
of 24
1

An analyst gathered the following information about a company that expects to fund its capital
budget without issuing any additional shares of common stock:

Source of Capital

Long-term debt

Preferred stock

Common equity



Warehouse project

Equipment project

8%

12%

Capital Structure

Proportion

50%

10%

40%



Marginal

After-Tax Cost

6%

10%

15%



IRR of Two Independent Projects

If no significant size or timing differences exist among the project(s) and both projects have the
same risk as the company's existing projects, which project(s) should be accepted?

Both projects


The equipment project only


The warehouse project only


5
of 24
Given two mutually exclusive projects with normal cash flows, the point at which their net
present value profiles intersect the horizontal axis is
most likely
the projects':
internal rate of return.


weighted average cost of capital.


crossover rate.


6
of 24
Which of the following statements describes the
most
appropriate treatment of cash flows in
capital budgeting?
Interest costs are included in the project's cash flows to reflect financing costs.


A project is evaluated using its incremental cash flows on an after-tax basis.


Sunk costs and externalities should not be included in the cash flow estimates.


7
of 24
A company extends its trade credit terms by four days to all its credit customers. The
most
likely
effect of this change to the company's credit customers is a four-day:
2

decrease in the company's operating cycle.


decrease in the company's net operating cycle.


increase in the company's operating cycle.


8
of 24
Which of the following statements is the
most
accurate description concerning the internal rate
of return (IRR) method? IRR:
assumes that all cash flows from a project will be reinvested at the computed IRR.


is sensitive to changes in the firm's weighted average cost of capital.


is the preferred method for evaluating mutually exclusive projects.


9
of 24
Corporate governance is
most
consistent with a system of:
checks and balances to minimize the conflicting interests among shareowners.


internal controls and procedures by which individual companies are managed.


defined roles for management and the majority shareowner(s).


10
of 24
A company is deciding to repurchase 5 million shares of stock that has a current price of
$$49.50. Below is the forecasted information of shares available for purchase. Which of the
following repurchase methods will
most likely
result in the average repurchased cost being
$$49.80?
Price

$$50.00
$$49.90
$$49.80
$$49.70
$$49.60
$$49.50

Number of Shares

Available for Purchase

(in millions)

9.00
5.00
3.00
1.00
0.50
0.50
3

Dutch auction


Open market repurchase


Fixed-price tender offer


11
of 24
The market price of a company's share is $$22 per share with a price-to-book value of 0.80. It
has 40 million shares outstanding and announces a buyback of 10% of its shares. If the
buyback is done at $$22 per share, the post-buyback book value per share is
closest
to:
$$28.10.


$$30.60.


$$24.80.


12
of 24
Which of the following sources of short-term financing is
most likely
used by smaller
companies?
Commercial paper


Collateralized loans


Uncommitted lines


13
of 24
A company that wants to determine its cost of equity gathers the following information:
Rate of return on 3-month Treasury bills

Rate of return on 10-year Treasury bonds

Market risk premium

The company’s equity beta

Dividend growth rate

Corporate tax rate

3.0%

3.5%

6.0%

1.6

8.0%

35%

Using the capital asset pricing model (CAPM) approach, the cost of equity (%) for the
company is closest to:

4