Which of the following corporate debt ratings are ordered in terms of decreasing market interest rate?

Select one:

A. AAA, A, BB, C

B. A, AAA, BB, C

C. BB, C, A, AAA

D. C, BB, A, AAA

E. None of the above

2)

Rochester Corp. holds a 15% equity investment in LaCrosse Inc. Reedsburg Investments holds 45% of LaCrosses stock. On October 1, 2017, LaCrosse declares and pays dividends to its stockholders. How will the dividend affect each companys net income for the year?

Select one:

A.

Rochester		Reedsburg
No effect		Increase

B.

Rochester		Reedsburg
No effect		No effect

C.

Rochester		Reedsburg
Increase		No effect

D.

Rochester		Reedsburg
Increase		Increase

E. There is not enough information to determine the effect.

3)

Which of the following is an inconsistency of using market multiples to determine value?

Select one:

A. Using a market multiple assumes that the target company is correctly priced, while comparable companies are mispriced.

B. Using a market multiple assumes that the target company can be fully described by its summary performance measure.

C. Using a market multiple assumes that all companies are mispriced.

D. Using a market multiple assumes that the target company is mispriced, while comparable companies are correctly priced.

4)

Which of the following would not be used as a summary performance measure when using market multiples to determine value?

Select one:

A. Net operating profit after tax

B. Net operating assets

C. Stock price

D. Book value