Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer the questions in details with a clear answer. If you don't know the answer please DO NOT ANSWER. Thank you! 1. A project's

Please answer the questions in details with a clear answer. If you don't know the answer please DO NOT ANSWER. Thank you!
image text in transcribed
image text in transcribed
1. A project's cash flows were discounted at a cost of capital of 10%. It's Net Present Value of calculated to be - 32,000. Therefore, the project's IRR is A. equal to 10%. B. less than 10% C. greater than 10% D. undetermined, since we don't have the actual cash flows provided in the question 2. Stuart Industries has an ROA = 6.0% and an ROE = 16.2%. The book equity of the firm = 300 million. What is the book asset value of the firm? A. 810 million B. 1,110 million C. 1,230 million D. Not enough information is given to answer the question. 3. Financial distress is least apt to lead to A. asset restructuring B. financial restructuring. C. liquidation D. Increasing dividends. 4. A common stock just paid a dividend of 1,00. If the expected long run growth rate for this stock is 5:45, and if investors required rate of return is 114%, what is the stock price? 7. The principle of diversification tells us that A. concentrating an investment in two or three large stocks will eliminate all of your risk. B. spreading an investment across five diverse companies will not lower your overall risk at all. Creading an investment across many diseases will climate all of the risk D.spreading an investment across many diverse assets will eliminate idiosyncratic risk A 16.28 B.16.70 C. 19.13 DM17.57 E. VI.01 & The beta of a security is calculated of a security's retum with the retum on the market portfolio A. Variance Covariance of the market retum B. Covariance: Variance of the market reten C. Covariance Standard deviation of the market retum D. Variance Covariance of the security retum E Covariance: Variance of the security return 5. A fim is currently financed with 300 of debt and 700 of equity. The yield-o-maturity (YTM) for the firm's bond in 9%. The market beta of the firm's equity is 1.50, the risk - free rate is 4%, and the risk premium is 6. The firm pays taxes at the marginal rate of 35%. What is the firm' WACC Round your answer to the nearest tenth of a parent (note: YTM is control A 100% C 11.8 D 10.9% 6. The lower the inventory tumover, the A more time inventory Items remain on the shell lower the inventory as a percentage of total assets C. longer it takes a firm to sell its inventory D. Greater the amount of inventory held by a firm E. Lesser the amount of inventory held by a fimm

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Finance

Authors: Ronald R. Pitfield

1st Edition

0852581513, 978-0852581513

More Books

Students also viewed these Finance questions