SECTION 1 (30 Marks) INSTRUCTION: Answer all questions in this section. Each quession c carries 2 1 marks. Amswer Trae or 1. According to the constant growth model, the dividend yield is equal to the false roquired return the dividend growth rate. 2. The term common stock is usually applind to stock that has no special paying dividends or in bankruptcy. 'nnue 3. A firn must make its dividend payments to preferred shareholders betore it makes any interes payments to its boadholders. THue 4. Diversilf or eliminate by oenirming assets in portfolio sach that thee assets' retsms are perfetly positively corret Beta is the sensitivity (a.k.a elasticity) of s stock's return to changes in market correlated among themselves. 5. For questions 6- 15, choose the letter a, b,c, or d that earries the best response 6, serve as intermediaries channeling the savings of individuals, businesses, and governm ents into loans and investments. Financial markets Securities Exchanges d. OTC markets 7. Of the following group of ratios, which would show the combined effect of liquidity, sset management and debt on the averall operating results? . Liquidity ratios ratios Coverage ratios d. Profitability ratios XYZ Company Ltd. has EBIT of $1,500,000 million and a 15% tax rate. It had S270.000 in depreciation expenses with a $250,000 increase in capital expenditures. What is its free cash flow? 8. working capital. It had another $170,000 in l-o.istaSD 000 $1,125,000 ocr $2,850,000 c $1,950,000 d. $1,500,000 Fast Cash Limited charges I percemt per wek on their loans. Assume there are exactly $2 weeks in a year. What is the effective annual rate? a 55.36% b. 67.77% 9. 36 ou 69.98 % d. 57.35% 00 10