Project #91040 - Finance

    1. If the Market rates of interest are higher than the promised coupon, the bond price will trade at a _____________ to its face value.テつ

    テつ

    テつテつテつテつ テつ2. The price of a bond is 93.87, the bond has 7 years until maturity and a

    テつテつテつテつテつテつテつテつテつ coupon of 8% what is the bonds yield to maturity?

    テつ

    3.テつ A measure of a Bondテ「竄ャ邃「s interest rate sensitivity is______________.テつ

    テつ

    4.テつ When Short Term interest rates are higher than the rate for Medium and

    テつテつテつ テつLong term bonds the yield curve is said to be__________.

    テつ

    5. テつDiscounting a stream of dividends to determine the value of a stock is

    テつテつテつテつテつテつ Called __________ valuation.テつ

    テつ

    6. Using a price/earnings ratio to value a stock is called ________valuation.

    テつ

    7.テつ A corporation earned 10$ a share last year and has a PE ratio of 15, what

    テつテつ テつテつis the price of the stock?テつ

    テつ

    テつテつ8.テつ A corporationテ「竄ャ邃「s stock yields 7% and is expected to grow at 5%. What is

    テつテつテつテつテつテつ the Required Rate of Return?テつテつテつテつテつテつ

    テつ

    9. テつPreferred dividends are guaranteed to be paid.テつ True or falseテつ

    テつ

    10. The valuation of a preferred stock uses the concept of a__________?

    テつ

    11.テつ What does the term Capital Budgeting refer to?

    テつ

    12.テつ What is meant by unconventional cash flows?

    テつ

    テつテつ 13.テつ What problems can arise in the standard IRR calculation?

    テつ

    テつテつテつ テつ14. Explain the NPV criteria for evaluating an investment.

    テつ

    テつテつ テつテつ15. What is the difference between investing and financing?

    テつ

    テつテつテつ テつ16. What are three limitations of using the Payback Rule for an Investment?

    テつ

    テつ テつテつテつ17. When considering a projectテ「竄ャ邃「s cash flows should an analyst include Sunk

    テつテつテつテつ テつテつテつテつテつテつCosts and Opportunity Costs?テつ

    テつ

    テつ テつテつテつ18. When considering a projectテ「竄ャ邃「s cash flows, should investments in Financing

    テつテつテつテつテつテつテつテつ テつテつCosts be included?

    テつ

    テつ テつテつテつ19. テつHow are project Operating Cash Flows calculated?

    テつ

    テつ テつテつテつ20. テつDefine MACRS. テつ

    テつ

    テつ テつテつテつ21. テつShould MACRS be used or traditional Straight Line Depreciation?

    テつ

    テつテつテつテつ 22. How can projects with different lives and costs be evaluated? テつテつテつ

    テつ

    テつテつ テつテつ23. What is Scenario Analysis?

    テつ

    テつテつテつ テつテつテつテつテつテつテつWhy is it useful?

    テつ

    テつテつ テつテつ24. What is Sensitivity Analysis?テつ

    テつ

    テつテつテつテつ テつテつテつテつテつWhy is it useful? テつテつ

    テつ

    テつテつテつテつ 25. Which is the most important in the analysis of a project: Accounting

    テつテつテつテつテつテつ テつテつテつテつテつBreakeven, Cash Flow Breakeven, or Financial Breakeven? Why?テつテつ

    テつ

    テつテつテつテつ 26. Define Operating Leverage.

    テつ

    テつテつテつテつテつ テつテつテつテつテつWhat is the formula for measuring Operating Leverage?

    テつ

    テつテつテつテつ 27. What is the difference between Soft and Hard Rationing?

    テつ

    テつテつテつテつ 28. What are the three forms of market efficiency? テつテつテつテつ

    テつ

    テつテつテつテつ 29. Define Risk Premium.

    テつテつ

    テつテつテつテつ 30. In 1998 Large Company Stocks returned 28.58%. What was the real, risk

    テつテつテつテつ テつテつテつテつテつテつadjusted return of that year (see historical returns reference page 384)

    テつ

    テつテつテつ 31. The Variance calculation squares all returns, positive or negative, why?テつ テつテつテつテつ

    テつ

    32. テつThe two Major classification of risk are ____________and__________

    テつ

    33.テつ How can an investor eliminate Unsystematic Risk?テつテつ

    テつ

    テつテつテつ 34. テつWhat does Beta measure?

    テつ

    テつテつテつ 35. テつA Security Market Line plots ___________ against _____________ and

    テつ

    テつテつテつ 36. How is the cost of preferred stock determined?

    テつ

    テつテつテつ 37. How is the cost of debt determined?

    テつ

    38. A corporationテ「竄ャ邃「s capital structure includes 26% bonds, with a yield toテつ テつテつmaturity of 7.3% and a tax rate of 35%. The corporation has 74% equityテつ テつ テつ with a required rate of return of 12.1%. What is the weighted average cost of capital?

Subject Mathematics
Due By (Pacific Time) 11/04/2015 01:00 pm
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