dividend payout ratios. Despite its drawbacks‚ following the residual dividend policy will tend to stabilize actual cash dividends‚ and this will make it easier for firms to attract a clientele that prefers high dividends‚ such as retirees. 2 points Question 2 In the real world‚ dividends Answer are usually more stable than earnings. fluctuate more widely than earnings. tend to be a lower percentage of earnings for mature firms. are usually changed every year to reflect earnings changes‚ and these
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FIN 534 Midterm Exam 1 1. Of the following investments‚ which would have the lowest present value? Assume that the effective annual rate for all investments is the same and is greater than zero. 2. You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would increase the calculated value of the investment? 3. Which of the following statements regarding a 20-year monthly payment amortized mortgage with
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good or bad for the firm. | | All of these are true statements. | | The Standard Industrial Classification (SIC) System is used to identify benchmark firms. | | This benchmark is based on a firm’s historical performance. | | | Question 2 | | Coverage ratios: Sectors‚ Inc.‚ has an EBIT of $7‚221‚643 and interest expense of $611‚800. Its depreciation for the year is $1‚434‚500. What is its cash coverage ratio? | 18.34 times | | 14.15 times | | None of these | | 15.42 times
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of consumable products each day (7 Reasons Coca-Cola Is A Buy. (n.d.)). Coca Cola has been a strong company for many decades‚ and has been able to innovate and change with their consumers needs and wants. Ko’s business volume has grown 6% in the Page 2 of 17 first half of 2014‚ as the company has been moving away from it’s reliance solely on carbonated soft drinks and more towards loIr calorie “natural”
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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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estimate an equity beta of 1.33. Given this information‚ estimate the beta of HHI’s investment in the hockey team. HHI Equity = 32 × 20 = $640 HHI debt = $64 HHI asset beta = (640/(640+64)) 1.33 + (64/(640+64)) 0 = 1.21 Holdings of Hotdogs = 850/2 = 425 Value of Hockey Team = (640+64)-425 = $279 Hotdog equity beta : (850/1050) × Be + (200/1050) × 0 = 0.75 Be = 0.75 × 1050/850 = 0.93 for hotdog equity So‚ if B = hockey team beta‚ (425/(425+279)) 0.93 + (279/(425+279)) × B = 1.21 B = 1.64
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Running head: SPRINT NEXTEL Sprint Nextel Corporation – Financial Analysis Dennecia M. Carter Finances 534: Financial Management Dr. Elias Konwufine Strayer University December 12‚ 2011 Sprint Nextel Corporation (Sprint) was founded in 1899‚ incorporated in 1938‚ is a holding company‚ with its operations primarily conducted by its subsidiaries. The company is headquartered in Overland Park‚ Kansas. Sprint offers a comprehensive range of communication services bringing mobility
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FIN 301 – MW – Tu Nguyen – Quiz #2 – Solution: 1. The relevant discount rate for the following set of cash flows is 14 percent. What is the profitability index? A. 0.89 B. 0.93 C. 0.99 D. 1.03 E. 1.07 AACSB: Analytic Bloom’s: Application Difficulty: Basic Learning Objective: 9‐7 Section: 9.6 Topic: Profitability index 2. A firm evaluates all of its projects by using the NPV decision rule. At a required return of 14 percent‚ the NPV for the follo
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FIN 534 Discussion Questions Week 1-11 Solution Follow www.hwmojo.com link below to purchase solution http://www.hwmojo.com/products/fin-534-discussion-questions We have all assignments‚ homework problems set and exams for FIN 534. Email us support@hwmojo.com FIN 534 Week 1-11 Discussion Questions Solved Week 1 DQ 1 Discussion 1: An Overview of Financial Management. A. In your judgment‚ what were the principal causes of the recent financial crisis and Great Recession? Would you include Government
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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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