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KHOA TAl CHINHTAl CHINH DOANH NGHIfiP I - FIN42A

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I. Trac nghiem - Chon dap an diing (3d)

Cfiul:
You just sold 800 shares of Encore stock at a price of $24.08 a share. Last year you paid
$29.20 a share to buy this stock. You received dividends totaling $1.02 per share. What is
your total capital gain on this investment?
A.-$4,096
B.-$4,069
C.-$4,609
D.-$4,690
E.None of the above
Cfiu 2:
Which one of these is a cash outflow from a corporation?
A.sale of an asset
B.dividend payment
C.sale of common stock
D.issuance of debt
E.profit retained by the firm
Cfiu 3:
Andy can purchase a one-bedroom house near his college today for $130,000, including the
cost of some minor repairs. He expects to be able to resell it in four years for $180,000 if he
just puts a little effort into cleaning up the property. At a discount rate of 7 percent, what
is the expected net present value of this purchase opportunity?
A.$7,001.61
B.$7,487.43
C.$7,321.14
D.$7,208.18
E.None of the above
Cfiu 4:
The rate of return required by investors in the market for owning a bond is called the:
A.coupon.
B.face value.
C.maturity.
D.yield to maturity.
E.coupon rate.

Cfiu 5:
Enterprise value equals the:
A. combined market value of debt and equity minus excess cash.
B.market value of equity minus the market value of debt plus excess cash.
C.market value of debt plus the book value of equity minus excess cash.
D.combined market value of debt and equity.
E.combined book value of debt and equity minus excess cash.
Cfiu 6:
SUMO Water Mining added $511 to retained earnings last year on sales of $28,646. The
administrative expenses were $5,370, depreciation was $912, dividends paid were $385,
and the interest expense was $110. What was the cost of goods sold if the firm's tax rate
was 35 percent?
A.$20,678.5
B.$20,785.5
C.$20,875.5
D.$20,755.5
E.None of the above
Cfiu 7:
Which one of the following best describes the primary advantage of being a limited
partner rather than a general partner?
A.entitlement to a larger portion of the partnership's income
B.liability for firm debts is limited to the capital invested
C.no potential financial loss
D.greater management responsibility
E.ability to manage the day-to-day affairs of the business
Cfiu 8:
You have $3,500 to deposit into a savings account. The four banks in your area offer the
following rates. In which bank should you deposit your savings?
A.Bank I: 3.80%, compounded annually
B.Bank II: 3.76%, compounded monthly
C.Bank III: 3.78% compounded semi-annually
D.Bank IV: 3.75% compounded quarterly
Cfiu 9:
Johnson's has a 6-year, 9 percent annual coupon bond with a $1,000 par value. Jason's has
a 12-year, 9 percent annual coupon bond with a $1,000 par value. Both bonds currently
have a yield to maturity of 9 percent. Which one of the following statements is correct if
the market rate decreases to 8 percent?
A.Both bonds will decrease in value by 4.62 percent.
B.Johnson's bond will increase in value by $75.36.
C.Jason's bond will increase in value by 4.62 percent.
D.Johnson's bond will increase in value by $46.23
E.Jason's bond will increase in value by 46.23 percent.
Cfiu 10:
Given the tax rates as shown, what is the average tax rate for a firm with taxable income of
$325,000?
Tax Rate
Taxable Income
(%)
$0-50,000 15
50,001 -75,000 25
75,001 -100,000 34
100,001 -335,000 39
A.33.19%
B.33.95%
C.33.85%
D.33.72%
E.None of the above

II.Tra lfti dung/sai - Giai thich ngan g$n (Id)

Cfiu 11:
Both Net present value method and Payback period method take into consideration the time
value of money.

Cfiu 12:
Cash flow to creditors increases when interest rates on debt decrease and new long-term loans
are acquired.

III.Bai tap tu luan (6d)

Cfiu 13:
Suppose you know that a company's stock currently sells for $70 per share and the required return
on the stock is 11 percent. You also know that the total return on the stock is evenly divided
between a capital gains yield and a dividend yield. If it's the company's policy to always maintain
a constant growth rate in its dividends, what is the current dividend per share?

CSu 14:
Maxwell Software, Inc., has the following mutually exclusive projects.
YearProject .4Projects
0-$20,000-$24,000
113,20014,100
28,3009,800
33,2007,600
a.Suppose the company's payback period cutoff is two years. Which of these two projects should
be chosen?
b.Suppose the company uses the NPV rale to rank these two projects. Which project should be
chosen if the appropriate discount rate is 15 percent?

Cfiu 15:
Based on the following information, calculate the expected return and standard deviation of each
of the following stocks. Assume each state of the economy is equally likely to happen. What are
the covariance and correlation between the returns of the two stocks?
State of Economy Return on stock A Return on stock B
Bear 0.105 -0.066
Normal 0.129 0.113
Bull 0.068 0.276

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