FIN2801 Final!Exam Name: Why should everyone have a basic understanding of finance? 2. Identify different forms of business organization as well as the
... [Show More] advantages and disadvantages of each? 3. Name and describe 3 popular hybrid business forms that exist today? 4. Identify major goal (s) that firms pursue and what a firm’s primary goal should be? 5. Describe the financial statements that corporations publish and the information that each statement provides? 6. Discuss potential problems associated with financial statement analysis? 7. What are financial markets? 8. What is the primary function of the money markets? 9. Describe the role that financial intermediaries play in the financial markets? 10. The compound value of $1 earning 10% interest would be ________ in 100 years? 11. Mark borrows $20,000 for a new car. The terms of the loan are 6% interest with payments to be paid monthly for 5 years? 12. Aunt Mary leaves you $50,000 as an inheritance assuming you invest this in a growth mutual fund earning on average 10% per year, how much could you potentially have in this account in 40 years? 13. What factors affect the cost of money? 14. What is risk? 15. Last year, you purchased Ford stock at $10 per share. Ford pays a $1.50 dividend and is trading at $14 per share. What is your realized return (yield)? 16. What is the term structure of interest rates and why is this important? 17. Explain how bond prices are determined? 18. The Salem Company bond currently sells for $955, has a 12% coupon interest rate and a $1000 par value, pays interest annually, and has 15 years to maturity. What is the yield to maturity? 19. Proctor & Gamble has common stock selling at $60 per share, paying a dividend expected to be $3 this coming year, and expected to have a dividend growth rate of 7% a year. What is your expected rate of return? 20. What is the significance of the par value of preferred stock? 21. What is Economic Value Added (EVA)? 22. What risk is measured by beta? 23. A firm with a beta value of 1.5 has a required rate of return of _______. If the risk`free rate is 10% and the market rate of return is 15%. 24. Find the required return for an asset with a beta of .90 when the risk`free rate and the market return are 8% and 12% respectively? 25. What is capital budgeting? [Show Less]