2.

Bavarian Sausage has a beta of 1.9. The risk-free rate is 4% and the expected market risk premium is 11%. What is the companys cost of equity?

Select one:

a. 21.6%

b. 26.6%

c. 17.0%

d. 24.9%

3.

If a company increases its use of financial leverage, then how would we generally expect that increased leverage to affect the dispersion of the companys net income distribution?

Select one:

a. This cannot be determined.

b. Greater dispersion

c. No effect on dispersion

d. Less dispersion

4.

A multiyear action plan for the major investments and competitive initiative that a companys managers believe will drive the future success of the enterprise is called:

Select one:

a. The mission plan

b. The tactical plan

c. The companys rollout plan

d. The strategic plan

5.

Suppose your company can borrow at 10%. Which discount(s) should your company take?

I. 2/10 net 30

II. 1/15 net 60

III. 3/10 net 70

IV. 1/10 net 45

Select one:

a. II and IV

b. I and III

c. I, III and IV

d. II only

6.

You purchased a 10-year, 6% coupon bond (the bond makes semi-annual payments) last year based upon a discount rate of 6%. One year later the discount rate has fallen to 5.5%. What is your total return on the bond?

Select one:

a. 12.512%

b. 3.512%

c. 6.000%

d. 9.512%

7.

Alpha Company shares have an expected return of 15.5% and a beta of 1.5. Gamma Company shares have an expected return of 13.4% and a beta of 1.2. Assume the CAPM holds. What is the expected return on the market?

Select one:

a. 7%

b. 11.2%

c. 10.3%

d. 12%

8.

If managers make dividend decisions only after taking all positive-NPV projects, they are

Select one:

a. Following a residual theory of dividends

b. Following a constant payout ratio policy

c. Following a low-regular and extra payout policy

d. Following a constant dollar payment policy

9.

Bavarian Sausage, Inc. just paid a $2.00 dividend, and investors expect that dividend to grow by 6% each year forever. If the required return on the share investment is 14%, what should be the price of the share today?

Select one:

a. $26.50

b. $18.32

c. $17.44

d. $11.21

10.

A bond that grants the investor the right to exchange their bonds for ordinary shares is called a:

Select one:

a. Treasury bond

b. Convertible bond

c. Mortgage bond

d. Zero-coupon bond

Don't need any explanation only need correct answer please if you can can you give me the answer with in 15 minutes