Can anyone help solve/explain these study guide questions ?
Thank you
1. Which one of the following statement is correct? a. Corporations face fewer regulations than proprietorships. b. One disadvantage of operating a business as a proprietor is that the firm is subiect to double taxation, because taxes are levied at both the firm level and the owner level. e. It is generally less expensive to form a corporation than a proprietorship because, with a proprietorship, extensive legal documents are required. d. One advantage of forming a corporation is that equity investors are usually exposed to less liability than they would be in a partnership. e. If a partnership goes bankrupt, cach partner is exposed to liabilities only up to the amount of his or her investment in the business. 2. Which one of the following statements is correct concerning the organizational structure of a corporation? a. The vice president of finance reports to the board. b. The chief executive officer reports to the board of directors. c. The controller reports to the president d. The treasurer reports to the chief operations officer e. The chief operations officer reports to the vice president of finance, 3. Financial ratios that measure a firm's ability to pay its bills over the short run without undue stress are known as ratios. a) asset management b) long-term solvency e) liquidity d) profitability e) market value 4. Which of the following is NOT FOUND in the Balance Sheet? a. Retained Earnings b. Inventories c. Depreciation Expense d. Short-term Notes Payable e. Total assets 5. Which of the following would, generally, indicate an improvement in a company's financial position, holding other things constant? The times-interest-earned ratio declines. b. The days sales outstanding ratio increases c. The quick ratio increases. d. The current ratio declines c. The total assets turnover decreases 6. Which of the following statements is CORRECT? a. If Firms X and Y have the same P/E ratios, then their market-to-book ratios must also be equal b. If Firms X and Y have the same met income, number of shares outstanding, and price per share, then their P/E ratios may not be the same. c. If Firms X and Y have the same carnings per share and market-to-book ratio, they must have the same price learnings ratio. d. If Firms X and Y have the same sercome, number of d. e. The quick HR IHT . The current ratio declines. The total assets turnover decreases 6. Which of the following statements is CORRECT? a. If Firms X and Y have the same P E ratios, then their market-to-book ratios must also be equal. b. If Firms X and Y have the same met income, number of shares outstanding, and price per share, then their P/E ratios may not be the same c. If Firms X and Y have the same carmings per share and market-to-book ratio, they must have the same price learnings ratio. d. If Firms X and Y have the same net income, number of shares outstanding, and price per share, then their price/earnings ratios must also be the same. 7. Which of the following is CORRECT? a. Retained Earnings (2001) - Retained Earnings (2000) - Net Income (2001) + Dividends (2001) b. Retained Earnings (2000) Retained Earnings (2001) + Net Income (2000) - Dividends (2000) c. Retained Earnings (2001) - Retained Earnings (2000) + Net Income (2001) - Dividends (2001) d. Retained Earnings (2000) - Retained Earnings (2001) + Net Income (2000) + Dividends (2000) 8. Which of the following statements concerning the effective annual rate are correct? 1. When lending and choosing which investment to accept, you should select the offer with the highest effective annual II. The more frequently interest is compounded, the higher the effective annual rate. III. A quoted rate of 6% compounded per second has a higher effective annual rate than if the rate were compounded daily. IV. When making financial decisions, you should compare effective annual rates rather than annual percentage rates. a) I and II only b) I and IV only c) I, II and III only d) II, III, and IV only e) I, II, III, and IV 9. A stock is expected to pay a dividend of S0.75 in the next year. The required rate of return isr-10.5%, and the expected constant growth rate isg-6.4%What should be the fair value of the stock? a $17.39 b S1784 c. $18.29 d. S18.75 e $19.46 10. If D = $1.25.g (dividend growth rate) = 4.7%, and P = $26.00, what is the stock's expected dividend yield? a. 4.12% b. 4.34% c. 4.579 d. 4.81% e. 5.05% e. 5.05% 11. Which of the following statements is CORRECT? a. You hold two bonds, a 10-year, zero coupon, issue and a 10-year bond that pays a 6% annual coupon. If the interest rate rises from its current level, the zero coupon bond will experience the larger percentage decline. b. The time to maturity does not affect the change in the value of a bond in response to a given change in interest rates. c. You hold two bonds. One is a 10-year, zero coupon, bond and the other is a 10-year bond that pays a 6% annual coupon. The same interest rate, 6%, applies to both bonds. If the interest rate rises from the current level, the zero coupon bond will experience the smaller percentage decline. d. The shorter the time to maturity, the greater the change in the value of a bond in response to a given change in interest rates, other things held constant. 12. A 10-year bond that pays coupon semi-annually at a coupon rate of 9% is priced at $ 900 at its issuance. What is the Yield to Maturity of the Bond? (7 points) If it is called back 3-years after the issuance will a call premium of 5%. What is its Yield to Call? (3 points) 13. Hart Enterprises recently paid a dividend of $1.25. It expects to have a dividend growth rate of 15% for the first 3 years followed by a constant rate of 6% thereafter. The firm's required return is 10%. What is the firm's stock value today? (14 points, show all your work to get full credit) 14. Le Sun's has sales of $3,000, total assets of $2.500, and a profit margin of 5%. The firm has an equity multiplier of 2.5. What is the return on equity? (7 points) Hint: Use DuPont Method 15. You are buying a house priced at $354.125. You plan to 15. You are buying a house priced at $334,125. You plan to pay 20% of the price for down payment and finance the rest. The mortgage loan you need to borrow lasts 30 years and requires 4.25% interest rate per annum. What is your payment EACH MONTH for the mortgage loan? (9 points) 16. An investment prefers to pay $2000 at the end of the first year, and then S3500 for year 2. year 3 and year 4. If the interest rate is 10%, what is the value of this investment to you? (6 points) Hint: Use the NPV function 17. A share of a preferred equity offers $3.00 per year for perpetuity. What is the value of this preferred share to you if the interest rate is 5%? (5 points) 18. Based on the financial statements provided below, please fill the missing numbers and calculate the requested financial ratios. Show all your work to get full credit L and Owner's outy 18. Based on the financial statements provided below, please fill the missing numbers and calculate the requested financial ratios. Show all your work to get full credit. Liband Owners Accounts Payee Rendang Tubes and Owens Cost of Goods Store Tango Change in Pa Netching e Change in d Net changing Pancing a. Cash and Equivalents of 2012
