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New Student Of Fortune
$10 to $15
$10 to $15
Price, low to high
Price, high to low
Date, new to old
Date, old to new
(TCO D) A stock has just paid a dividend and has declared an annual dividend of $2.00 to be paid one year from today. The dividend is not expected to grow. The return on equity for similar stocks is 12%. What is P0? (Points : 20)
(TCO E) A company has 30 million shares outstanding trading for $8 per share. It also has $90 million in outstanding debt
(TCO F) A company has the opportunity to do any of the projects for which the net cash flows per year are shown below. The company has a cost of capital of 12%
(TCO G) If net income, total assets, and book value of equity stayed the same, what would be the effect on the DuPont Identity of an increase in sales? (Points : 20)
11. Name and describe the three functions of managerial finance. For each, give an example other than those used in the text and lecture. (Points : 25)
12. Explain thoroughly how stock portfolios affect the risk to an investor. (Points : 30)
13. What is the Cash Conversion Cycle (CCC)? Name the components of the CCC and explain why the CCC is important to business.
5. If you were a manager of a company, which of the three right side components of the DuPont Identity would you want to increase and which would you want to decrease, other things being equal?
6. A stock pays an annual dividend of $2.50 and that dividend is not expected to change. Similar stocks pay a return of 10%. What is P0? (Points : 20)
7. A stock has just paid a dividend and has declared an annual dividend of $2.00 to be paid one year from today. The dividend is expected to grow at a 5% annual rate.
8. A bond has 5 years to maturity and has a YTM of 8%. Its par value is $1,000. Its semiannual coupons are $50. What is the bonds current market price? (Points : 10)
9. A bond currently sells for $1,000 and has a par of $1,000. It was issued two years ago and had a maturity of 10 years. The coupon rate is 7% and the interest payments are made semiannually. What is its YTM? (Points : 10)
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