FIN 534 – Homework Chapter 2 Directions: Answer the following five questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed‚ or both. Submit your assignment using the assignment link in the course shell. Each question is worth five points apiece for a total of 25 points for this homework assignment. 1. Which of the following statements is CORRECT? c. If a firm is more profitable than average (e.g.‚ Google)‚ we would normally expect
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statements about dividend policies is CORRECT? e. The clientele effect suggests that companies should follow a stable dividend policy. This theory believes that a company’s stock price will move according to demands of the investors change in policy. 2. Which of the following statements is CORRECT? c. Stock repurchases can be used by a firm that wants to increase its debt ratio. Stock repurchases reduce the number of shares outstanding and are often accompanied by a stock price increase. 3. Which
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Fin 534 chapter 1‚Quiz 1 • Question 1 | | | | |You recently sold 100 shares of your new company‚ XYZ Corporation‚ to your brother at a family reunion. At the reunion your brother gave | | | | | |you a check for the stock and you gave your brother the stock certificates. Which of the following statements best describes
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Homework Chapter 4‚ Week 3 1. A $50‚000 loan is to be amortized over 7 years‚ with annual end-of-year payments. Which of these statements is CORRECT? C. The proportion of each payment that represents interest as opposed to repayment of principal would be lower if the interest rate were lower. If the interest rate is low on a loan‚ the amount of repayment is low. 2. Which of the following statements is CORRECT? C. to solve for I‚ one must identify the value of I that causes the PV of
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common stock trade in the market. Which of the following statements is most correct‚ holding other things constant? Answer Correct Answer: The price of these call options is likely to rise if XYZ’s stock price rises. Question 2 Other things held constant‚ the value of an option depends on the stock’s price‚ the risk-free rate‚ and the Correct Answer: All of the above. Question 3 Which of the following statements is CORRECT?
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1. Company Overview. The focus of this analysis is to perform a thorough examination of Apple Computer’s financial performance over the past three years and its growing success. Apple maintains its focus on the design‚ development and marketing of personal computers‚ related software‚ peripherals‚ portable digital music players and related accessories. The decision of choosing Apple for the analysis is for the reason that this company has visible strengths and success. Apple has made drastic financial
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1. What is the present value of the following uneven cash flow stream −$50‚ $100‚ $75‚ and $50 at the end of Years 0 through 3? The appropriate interest rate is 10%‚ compounded annually. PV=190.46 (SEE EXCEL FILE ATTACHED) 2. We sometimes need to find out how long it will take a sum of money (or something else‚ such as earnings‚ population‚ or prices) to grow to some specified amount. For example‚ if a company’s sales are growing at a rate of 20% per year‚ how long will it take sales to double?
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to the current ratio minus the quick ratio. a. True b. False (15-1) Net working capital F S Answer: b EASY 2. Net working capital is defined as current assets divided by current liabilities. a. True b. False (15-1) Working capital F S Answer: b EASY 3. An increase in any current asset must be accompanied by an equal increase in some current liability. a. True b. False (15-2) Working capital policy F S Answer: a EASY 4. Determining a firm’s optimal investment in working capital and
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FIN 534 Week 3 HW Chapter 5 1. Three $1‚000 face value bonds that mature in 10 years have the same level of risk‚ hence their YTMs are equal. Bond A has an 8% annual coupon‚ Bond B has a 10% annual coupon‚ and Bond C has a 12% annual coupon. Bond B sells at par. Assuming interest rates remain constant for the next 10 years‚ which of the following statements is CORRECT? Answer: D. Bond A sells at a discount (its price is less than par)‚ and its price is expected to increase over the next year
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condition of the firm’s fixed assets. e. The AFN equation produces more accurate forecasts than the forecasted financial statement method‚ especially if fixed assets are lumpy‚ economies of scale exist‚ or if excess capacity exists. ANSWER: B 2. Which of the following statements is CORRECT? a. The sustainable growth rate is the maximum achievable growth rate without the firm having to raise external funds. In other words‚ it is the growth rate at which the firm’s AFN equals zero. b. If
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