BU 381 Last Exam 2023

The dividend discount model

All else the same, an investor will require less return to invest in a callable bond than one that is not callable.

Carrying costs include rental payments on storage facilities where inventory is maintained.

Which of the following terms is the chance that the bond issuer will not be able to make timely payments?

Which of these is used as a measure of the total amount of available cash flow from a project?

Which of the following is the reward investors require for taking risk?

Preferred stock is largely owned by other companies rather than individual investors.

When calculating the weighted average cost of capital, weights are based on

Bonds are issued by which of the following?

All of the following items would need to be included in the bond's indenture agreement EXCEPT

Operating cycle is measured as

Preferred stock takes preference over common stock in bankruptcy proceedings.

If a bond is selling at a discount, which of the following statements is correct?

Which of the following is the reward investors require for taking risk?

A bond’s main characteristics include

If the firm wants to identify the percentage of accounts receivable that are over 90 days old, the firm should prepare

Investors sell stock at the

Which technique for evaluating capital projects tells how long it will take a firm to earn back the money invested

Investors buy stock at the

Which of the following is used to compute bond cash interest payments?

A capital budgeting technique that generates a decision rule for choosing projects based on the total discounted value

Why do firms offer customers discounts for paying early?

Carrying costs include the opportunity costs associated with having capital tied up in current assets

Which of the following is a measurement of the co-movement between two variables that ranges between −1 and +1?

Which statement is true regarding cost-cutting proposals?

Neither payback period nor discounted payback period techniques for evaluating capital projects account for

The least-used capital budgeting technique in industry is

Which of these describe groups or pairs of projects where you can accept one but not all?

To find the percentage return of an investment

The interest rate used to compute the bond’s interest payment each year refers to

The size of the firm measured as the current stock price multiplied by the number of shares outstanding is

Preferred stock dividends do not grow.

When calculating the operating cash flow for a project, one would calculate it as

If a firm has already paid an expense regardless of whether a particular project is undertaken, that expense is a(n)

Which of these is defined as a combination of investment assets held by an investor?

As residual claimants, which of these investors claim any cash flows after the firm pays all other claims?

The area of management concerned with designing and overseeing the process of production is which of the following?

Which statement is true?

Concerning incremental project cash flow, which of these is a cost one would never count as an expense of the project?

Which term includes both firm specific risk as well as market risk?

Which of these is the dollar return characterized as a percentage of money invested?

Under what conditions is a bond likely to be called?

Concerning incremental project cash flow, which of these is a cost one would never count as an expense of the project?

Which of these is the measurement of risk for a collection of stocks for an investor?

As new capital budgeting projects arise, we must estimate

If the risk-free rate is 8 percent and the market risk premium is 2 percent, what is the required return for the market?

A bond with an 8.75 percent coupon and a market interest rate of 6.25 percent. Is this a discount or a premium bond?

Bond prices are quoted in terms of which of the following?

All else the same, an investor will require more return to invest in a callable bond than one that is not callable.

Which of these is a measure of the sensitivity of a stock or portfolio to market risk?

Which of the following is NOT one of the "five C's" of credit analysis?

Carrying costs the lost sale if the company runs out of a particular model.

Which of the following is a reason municipal bonds offer lower rates of interest income for their investors?

Which of these is a measure summarizing the overall past performance of an investment?

If a firm has a cash cycle of 25 days and an operating cycle of 80 days, what is its average payment period?

Which of these includes any capital gain (or loss) and any income you received from an investment?

All of the following are strengths of NPV EXCEPT

The bond's annual coupon rate divided by its market price is referred to as the

Regarding a bond's characteristics, which of the following is the principal loan amount that the borrower must repay?

The call feature does not impact the return that investors demand.

The process of putting money in different types of investments to reducing risk of the portfolio is called

A bond's current yield is defined as

Which of these is defined as the excess amounts of a current asset kept on hand to meet unexpected shocks in demand?

Which of the following is the asset pricing theory based on a beta, a measure of market risk?