1. If a ste's Intrinske vale le less than market price, then the stock is undervalued and show he bought 2. True False 2. A fancial Intermediary is a corporate that takes funds from westors and the provides the funds to those who need bask that takes a demand deposits and the uses the went to make long-term mortgage loans is one emple of a financial Intermediary. True False 3. Which of the following actions be likely to reduce partial conflicts of interest between stockholders and w e .. Congress passes a low that as hostile vers Afr's compensation system is changed to the managers receive larger cash salaries but fewer long-tereptist by stock c. The company change the way the stock options are handled, with all optionsvesting after 2 years rather than having 20% eps awarded vest every 2 years ever a 16year period. d. The company's out de suiting for is geen a lucrathe year-by-year conting contract with the company The composition of the board of director is changed from all outside directions to all inside directors, the directors are compensated with cash rather than stock the 4. Which of the following is primary market transaction? . You sell 200 shares of TM stack on the NYSE through your broker. You buy 200 shares of TM stock from your brother. The trade is not made through bryker you just give him cash and he gives you the stock RM 2,000,000 shares of new stock and sell them to the ble through an investment banker. d. One financial institution buys 200,000 shares of HM stock from another institution. An Investment banker arrange the transaction e. TBM 2,000,000 shares of treasury stock to its employees when they exercise options that were greated in per years 5. Which of the following is ple of a ny market instrument? US Treasury bil . Corporate bonde. Common stock. Preferred stock. Musilpal bond 6. Which of the following staten Is CORRECT? A reduction in inventaries have no effect on the current ratio h. An increase in inventaries will have effect on the current ratio c. If a fire increase its sales while holding its inventories constant, the other things held constant, its inventory turne decrease d. A reduction in the westery twnever rate will really lead to a decrease in the ROE wire for Increase in sales while holding is eventores constant, thes, other things held constant, its feature ratiewe rate 7. Last year, Davis Company had $1,000,000 in taxable income from his operations, 520,000 in interest income, and 300.000 dividend Income. Use the corporate tax rate table given below, what was the company's tax liability for the year of dividende received are is excluded free tube Ince and for total taxable income, when calculating the corporate tum ut, you should sum will the income up except 70% of dividende received) Tex on Base Bracket Exer above Base Percentage 15% Tatable Income 50-550.000 550,000-$75,000 575.000-5100 $100.000-50.000 $35.000 $10.000.000 $10,000,000-$15.000.000 $15.000.000 $18333.333 5. Over SIR.333,333 13,750 22.250 113.900 3,400,000 SIS 6,416,467 5177373 S163.340.51K3.600 $371.460., 377,000 What is the presentate of the following cash flow streamata rate of 2.097 -1000,- 2450 3,175 PvE (1 +08) (11003)" 21+08)" Year + uuooss -8398 52.450 C: $1,000 37311539 54,772 4.56,814 53,175 54,400 5.20 9. You want to quit your job back to school for a law degree 4 years from now, and you plan to save $5,000 per year, beletes immediately. You will make 4 depenen t that pays 4.0 Interest. Under these ampte, wuch will you have years from dat ar