of $2,500, and a profit margin of 5 percent. 1. Braam Fire The firm has "Fire Prevention Corp, has sales of $3,000, total assets of $2,500 has a total debt ratio of 40 percent. What is the return on equity? A. 2.4 percent B. 8.4 percent C. 10 percent D. 12 percent E. 15 percent 54 dividends per share next year. The market requires a dividends grow at a constant rate of 6% 2. The Blue Moor 16% return on per year, A. 40 B. 42.40 C. 44.94 D. 47.64 E. 50.50 Moon Corporation is expected to pay $4 dividends per share next year. T um on the firm's stock. If the Blue Moon Corporation's dividends grow atac will be its stock price in 4 years. 3. A preferred su red stock is expected to pay dividend of $5 per year forever. Given a required rate of return of is the current value of the preferred stock? 10%, what is the A. $5 B. $50 C. $100 D. $500 E. $1,000,000 4. Teder Corporatio 12 percent reti corporation stock is expected to pay $3.51 dividends per share next year. The market requires : cent return on the firm's stock. If the company maintains a constant 7 percent growth rate in ds, Teder Corporation stock currently sells for per share. A. $59.9 B. $64.1 C. $68.6 D. $70.2 E. $75.1 5. Andre's Bakery has sales of $687,000 with costs of S492,000. Interest expense is $26,000 and depreciation is $42,000. Dividend paid out is $20,000. The tax rate is 35 percent. What is the net income? $302.41, a face value of $1,300, 10. The zero coupon bonds of SavePenny, Inc. have a market price of $302.41 18 years to maturity. _ _ is the viel is the yield to maturity on the bond. A. 5.76 percent B. 6.12 percent C 6.87 percent D. 7.59 percent E 8.93 percent 11. All else equal, which of the following bond has a higher yield? A Tax-exempt bond rather than a taxable bond B. An investment-grade bond rather than a junk bond C. Bond that can be sold quickly in the market vs. bond that can be sold slowly D. Bond with a call provision vs. bond without one E. Bond with protective covenants rather than a bond with no covenants 12. is the price of a bond with $1,000 par value bond and 6% coupon rate paid is priced to yield 7% and it has 9 years to maturity. This bond is called A. 1098.53; premium bond d and 6% coupon rate paid annually, if the bond B. 1071.08; premium C 1.000; par D. 954.78; discount E. 934.85; discount 13. Grohl Co. issues 20-year bonds at a coupon rate of 6 percent. The bonds make semiannual payment the YTM on these bonds is 7.2 percent, the bond price is A. 873.83 B. 891.02 C. 931.38 D. 960.12 E. 998.53 Which of the following ratio measures a firm's ability to make interest payments on its debt? A. Receivables turnover B. Cash ratio C. Times interest earned D. Profit margin E. PE ratio 15. Which of the following is considered as a use of cash? A. Decrease in accounts receivable B. Decrease in accounts payable C. Increase in long-term debt D. Decrease in dividend payout E. Increase in common stock A B C. D. E $42.750 562 550 582 550 86,450 S124.550 S1.000. The OF 55.000, current liabilities of $2,000, and inventory of se 6. SDJ, Inc., has current asset of so.com ratio is A 1 B2 C. 25 D3 E 4 coupon pes of coupon bo u tstanding. Bond A is a 7-year 6 perce ue selling for $972 58 Rond Bis a 5-year 7 percent annual me that bond and hand have the same yield to maturity, w Storico Co. has two types of coupo bond with $1000 par value selling to $1000 par value. Assume that bond bond B? A. $936.91 B. $972.58 C. 1000.00 D. 1020.78 E. 1042.12 below for current US corporation federal tax rate. Corporation Growth 8. Refer to the table below for current US corporatio taxable income. The company's average federal taxa Taxable Income SO - 50.000 50.000 - 75,000 75.000 - 100,000 100,000 - 335,000 335.000 - 10,000,000 10,000,000 - 15,000,000 15.000.000 - 18,333,333 18,333,333 + A 19.3% B. 25% C. 34% D. 35% E. 39% Tax Rate 159 25% 34% 39% 34% 35% 35% 38% 35% 9. Suppose a bond with an 8% coupon rate and semiannual coupons, has a face value of maturity and is selling for $958.68. is the yield to maturity on the bond. A. 8.49 percent B. 8.00 percent C. 6.90 percent D. 6.34 percent E. 4.25 percent
