1.

On June 9th, you purchased 3,000 shares of SP stock. On July 5th, you sold 400 shares of this stock for $21 a share. You sold an additional 400 shares on July 8^th, while bought 1,000 shares on July 9^th at a price of $22.50, and $20.50 a share, respectively. The company declared a $.30 per share dividend on June 20th to holders of record as of July 10^th (Friday). This dividend is payable on July 31st. Given the T+1 rule for the ex-dividend date, how much dividend income will you receive on July 31st as a result of your ownership of SP stock?

Select one:

A. $660

B. $960

C. $780

2.

Phil's Carvings, Inc. wants to have a weighted average cost of capital of 12%. The firm has an after-tax cost of debt of 4% and a cost of equity of 14%. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

Select one:

A. 0.50

B. 0.25

C. 1

3.

To financial analyst the relevant measure of inflows and outflows is:

Select one:

A. Cash based

B. Fiscal year based

C. Accrual based

4.

Jack's Construction Co. has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yielding 8.5%. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is yielding 4% and the market risk premium is 8%. Jack's tax rate is 35%. Furthermore, Jack's Construction Co. has 750,000 preferred shares outstanding and pays a current dividend of $2.00 per share annually. Current price of preferred share equals $22. What is Jack's weighted average cost of capital?

Select one:

A. 11.37%

B. 10.30%

C. 10.38%