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[Solved] FIN534 Final Exam Part 2 | A+ work

· Question 1 2 out of 2 points Which of the following is NOT normally regarded as being a good reason to establish an ESOP? Answer ·... [Show More] Question 2 2 out of 2 points Which of the following is NOT normally regarded as being a barrier to hostile takeovers? Answer · Question 3 2 out of 2 points If a firm adheres strictly to the residual dividend policy, the issuance of new common stock would suggest that Answer · Question 4 0 out of 2 points Which of the following statements is correct? Answer · Question 5 2 out of 2 points Which of the following statements is NOT correct? Answer · Question 6 2 out of 2 points Which of the following actions will best enable a company to raise additional equity capital? Answer · Question 7 2 out of 2 points Which of the following statements is correct? Answer · Question 8 2 out of 2 points Which of the following statements is CORRECT? Answer · Question 9 2 out of 2 points Which of the following statements is correct? Answer · Question 10 2 out of 2 points Which of the following statements is CORRECT? Answer · Question 11 2 out of 2 points Which of these items will not generally be affected by an increase in the debt ratio? Answer · Question 12 2 out of 2 points Based on the information below for Benson Corporation, what is the optimal capital structure? Answer · Question 13 0 out of 2 points Blueline Publishers is considering a recapitalization plan. It is currently 100% equity financed but under the plan it would issue long-term debt with a yield of 9% and use the proceeds to repurchase common stock. The recapitalization would not change the company's total assets, nor would it affect the firm's basic earning power, which is currently 15%. The CFO believes that this recapitalization would reduce the WACC and increase stock price. Which of the following would also be likely to occur if the company goes ahead with the recapitalization plan? Answer · Question 14 2 out of 2 points Which of the following statements is CORRECT? Answer · Question 15 2 out of 2 points Two operationally similar companies, HD and LD, have the same total assets, operating income (EBIT), tax rate, and business risk. Company HD, however, has a much higher debt ratio than LD. Also HD's basic earning power (BEP) exceeds its cost of debt (rd). Which of the following statements is CORRECT? Answer · Question 16 2 out of 2 points Which of the following events is likely to encourage a company to raise its target debt ratio, other things held constant? Answer · Question 17 2 out of 2 points A lockbox plan is Answer · Question 18 2 out of 2 points Which of the following will cause an increase in net working capital, other things held constant? Answer Selected Answer: Merchandise is sold at a profit, but the sale is on credit. Correct Answer: Merchandise is sold at a profit, but the sale is on credit. · Question 19 2 out of 2 points Firms generally choose to finance temporary current operating assets with short-term debt because Answer Selected Answer: matching the maturities of assets and liabilities reduces risk under some circumstances, and also because short-term debt is often less expensive than long-term capital. Correct Answer: matching the maturities of assets and liabilities reduces risk under some circumstances, and also because short-term debt is often less expensive than long-term capital. · Question 20 2 out of 2 points Which of the following statements is most consistent with efficient inventory management? The firm has a Answer · Question 21 2 out of 2 points Other things held constant, which of the following would tend to reduce the cash conversion cycle? Answer · Question 22 0 out of 2 points Which of the following is NOT directly reflected in the cash budget of a firm that is in the zero tax bracket? Answer · Question 23 0 out of 2 points Suppose that 1 British pound currently equals 1.62 U.S. dollars and 1 U.S. dollar equals 1.62 Swiss francs. What is the cross exchange rate between the pound and the franc? Answer · Question 24 2 out of 2 points Suppose it takes 1.82 U.S. dollars today to purchase one British pound in the foreign exchange market, and currency forecasters predict that the U.S. dollar will depreciate by 12.0% against the pound over the next 30 days. How many dollars will a pound buy in 30 days? Answer · Question 25 2 out of 2 points Suppose a foreign investor who holds tax-exempt Eurobonds paying 9% is considering investing in an equivalent-risk domestic bond in a country with a 28% withholding tax on interest paid to foreigners. If 9% after-tax is the investor's required return, what before-tax rate would the domestic bond need to pay to provide the required after-tax return? Answer · Question 26 2 out of 2 points Suppose 1 U.S. dollar equals 1.60 Canadian dollars in the spot market. 6-month Canadian securities have an annualized return of 6% (and thus a 6-month periodic return of 3%). 6-month U.S. securities have an annualized return of 6.5% and a periodic return of 3.25%. If interest rate parity holds, what is the U.S. dollar-Canadian dollar exchange rate in the 180-day forward market? Answer · Question 27 2 out of 2 points Suppose a carton of hockey pucks sell in Canada for 105 Canadian dollars, and 1 Canadian dollar equals 0.71 U.S. dollars. If purchasing power parity (PPP) holds, what is the price of hockey pucks in the United States? Answer · Question 28 2 out of 2 points Suppose Yates Inc., a U.S. exporter, sold a consignment of antique American muscle-cars to a Japanese customer at a price of 143.5 million yen, when the exchange rate was 140 yen per dollar. In order to close the sale, Yates agreed to make the bill payable in yen, thus agreeing to take some exchange rate risk for the transaction. The terms were net 6 months. If the yen fell against the dollar such that one dollar would buy 154.4 yen when the invoice was paid, what dollar amount would Yates actually receive after it exchanged yen for U.S. dollars? Answer · Question 29 2 out of 2 points Suppose 90-day investments in Britain have a 6% annualized return and a 1.5% quarterly (90-day) return. In the U.S., 90-day investments of similar risk have a 4% annualized return and a 1% quarterly (90-day) return. In the 90-day forward market, 1 British pound equals $1.65. If interest rate parity holds, what is the spot exchange rate? Answer · Question 30 2 out of 2 points In 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200. If the car still sold for the same amount of yen today but the current exchange rate is 144 yen per dollar, what would the car be selling for today in U.S. dollars? Answer [Show Less]

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