50. _______________ are usually taxed at 15 percent and are generally _______________. Question 50 options:

1) Coupons; received each quarter

2) Dividends; received semi-annually

3) Dividends; received each quarter

4) Short term capital gains; received each quarter

4. U.S. Treasury Debt is currently paying 2.50 percent on an annual basis. High yield, i.e., junk, corporate bonds are currently paying about 6.25 percent on an annual basis. You estimate an expected return on the market, i.e., the expected return on common stocks, to be 8.00 percent annually. Based on this information, what is the equity risk premium?

Question 4 options:

1)	Between 0 percent and 5.00 percent

2)	Between 5.01 percent and 9.00 percent

3)	Between 9.01 percent and 13.00 percent

4)	Greater than 13.00 percent

5. Use the following information to calculate the crossover rate and determine which project is better at a discount rate of 10%. The Galleria apartment complex project has an initial cost of 10 million followed by annual cash inflows of 2 million, 5 million, and 8 million for years 1, 2, and 3, respectively. The Penn Avenue apartment complex project has an initial cost of 10 million followed by annual cash inflows of 1 million, 1 million, and 14 million for years 1, 2, and 3, respectively. Based on this information, which of the following is true?

Question 5 options:

1)	The crossover rate is equal to 16.23% (rounded to the nearest hundredth of a percent)

2)	The Penn Avenue project is better than the Galleria project when the discount rate equals 10%

3)	Both of the options listed

4)	None of the options listed

16. Which of the following describes the PE ratio?

Question 16 options:

1)	It is the share price multiplied by the number of shares outstanding

2)	It is the current share price divided by the trailing twelve months of earnings

3)	It is the current share price divided by operating cash flow per share over the prior twelve months

4)	It is one minus the dividend payout rate

Question 31 (4 points)

Saved

NPV and IRR are best described as _______________metrics.

Question 31 options:

1)	Capital structure

2)	Capital budgeting

3)	Comparable based

4)	Working capital management