Question
1. Which of the following would be helpful to an analyst evaluating the performance of a firm? A.All of the answers are correct. B.Understanding the
1. Which of the following would be helpful to an analyst evaluating the performance of a firm?
A.All of the answers are correct.
B.Understanding the industry in which the company operates.
C.Understanding the economic environment.
D.Reviewing the annual report and other regulatory filings.
2. Which of the following is incorrect with respect to financial statement articulation?
A.Preparation of the statement of shareholders' equity provides the data needed to complete the income statement.
B.Preparation of the balance sheet provides the data needed to prepare the statement of cash flows.
C.Preparation of the income statement and statement of comprehensive income provides the necessary data needed to balance the balance sheet.
D.Preparation of the statement of cash flows requires information from the income statement and the balance sheet.
4. The cost of equity can be determined using CAPM.Which of the following is incorrect?
A.The higher the beta, the higher the cost of equity.
B.The market risk premium is the risk of investing in equities.
C.The risk free rate is typically based on a 3-day treasury bill.
D.Using CAPM, the cost of equity is equal to the risk free rate + (B X Market Risk Premium).
5. If a company wishes to minimize taxes it pays, it will:
A.None of the above
B.Delay the recognition of revenue
C.Speed up the recognition of expenses
D.Both of the above
6.
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