Bsbwor501 Final Exam

Grade Details

1.
Question:
The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to _________. Your Answer:

maximize its expected total corporate income

maximize its expected EPS

minimize the chances of losses

maximize the stock price per share over the long run, which is the stock's intrinsic value

CORRECT

maximize the stock price on a specific target date

Instructor Explanation:
See page 6 of the book. Points Received:
5 of 5 Comments:

2.
Question:
What's the future value of $2,000 after 3 years if the appropriate interest rate is 8%, compounded semiannually? Your Answer:

$2,854.13

$2,781.45

$2,324.89

$2,011.87
Treasury bills

CORRECT

small-company stocks, long-term corporate bonds, large-company stocks, long-term government bonds, U.S. Treasury bills

large-company stocks, small-company stocks, long-term corporate bonds, U.S. Treasury bills, long-term government bonds

U.S. Treasury bills, long-term government bonds, long-term corporate bonds, small-company stocks, large-company stocks

large-company stocks, small-company stocks, long-term corporate bonds, long-term government bonds, U.S. Treasury bills

Instructor Explanation:
This is found at the top of page 257 of the book. Points Received:
5 of 5 Comments:

15.
Question:
Apex Roofing's stock has a beta of 1.50, its required return is 14.00%, and the risk-free rate is 5.00%. What is the required rate of return on the stock market? (Hint: First find the market risk premium.) Your Answer: