BSN-379 WEEK 1
1. Question : (TCO 1) Why is maximization of the current value per share a more appropriate financial management goal than profit maximization?
Student Answer: Because by maximizing the current stock value you also maximize the company’s profit for the year. Because this criterion is non-ambiguous.
Because financial managers always act in the best interest of shareholders. B and C
Points Received: 3 of 3 Comments:
2. Question : (TCO 1) Market value is important to the financial manager because:
Student Answer: It reflects the value of the asset based on generally-accepted accounting principles. Is a crucial component of the balance sheet and can impact the financial statements. Market values reflect the amount someone is willing to pay today for an asset. The market value of an asset reflects its historical cost.
Points Received: 3 of 3 Comments:
3. Question : For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Suppose that Sports Baseball has 30,000 shares of stock. Assume a tax rate of 30%. What is the EPS figure?
Student Answer: 8.50
8.75
9.0
9.15
Instructor Explanation: Chapter 2, page 28, Net Income/Total Shares Outstanding
Taxable Income = $2,700,000 –
Student Answer: Because by maximizing the current stock value you also maximize the company’s profit for the year. Because this criterion is non-ambiguous.
Because financial managers always act in the best interest of shareholders. B and C
Points Received: 3 of 3 Comments:
2. Question : (TCO 1) Market value is important to the financial manager because:
Student Answer: It reflects the value of the asset based on generally-accepted accounting principles. Is a crucial component of the balance sheet and can impact the financial statements. Market values reflect the amount someone is willing to pay today for an asset. The market value of an asset reflects its historical cost.
Points Received: 3 of 3 Comments:
3. Question : For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Suppose that Sports Baseball has 30,000 shares of stock. Assume a tax rate of 30%. What is the EPS figure?
Student Answer: 8.50
8.75
9.0
9.15
Instructor Explanation: Chapter 2, page 28, Net Income/Total Shares Outstanding
Taxable Income = $2,700,000 –