FINA 3000
Which of the following statements is NOT true?
Accepting a zero NPV project has a negative impact on the share holders wealth
Which of the following statements regarding Operating cash flow are false?
All else equal, an increase in accounts payable from one year to the next will decrease the firm's OCF
Which of the following is the main cause of the financial crisis?
Excessive deficits by our government hurt our credit rating and the credit rating of our largest banks leading to a need for a bailout
A bond with a credit rating of BBB is considered a junk bond
False
Bond holders have voting rights. They just don't get as many votes as shareholders
False
If a bond credit rating gets upgraded, we expect to see the price of the bond decline
False
Lemann sees a benefit to buying Heinz Ketchup as he owns controlling interest in Wendy's
False
Municipal bonds carry risk because the projects that they fund are often poor investments
False
The beta for a company like Kellogg's cereal might be expected to be greater than 1
False
The largest weakness of CAPM is finding a truly risk free investment
False
The largest weakness of the infinite pricing model is that we assume future selling price of a stock
False
There is no liability in owning a share of stock
False
When we build a portfolio the key determining factor of portfolio risk is the variances of the individual securities
False
You cannot achieve diversification in a portfolio unless the two stocks have a correlation less than .50
False
What is a free cash flow?
Free cash flow is available to all investors in the firm before any payments to investors are made
Which of the following is an example of a negative side effect?
Home Depot opens a second store in the Athens area
In the article, "Betting on boring stocks pays off", what is the reason boring stocks are being favored by some investors
Investors are looking for bond substitutes as the federal reserve has pushed down bond returns
If a firm expects that ____, Then it expects to have claimed too _____in depreciation expenses at the end of the project and it expects to pay taxes on the gain to the government at the project's termination
MV<BV; much
Which tax break was eliminated at the beginning of the year?
Payroll tax
Synovous Bank had real estate issues with which resort?
Sea Island
Which of the following is true about the NPV method?
The NPV assumes that all cash flows are reinvested at teh firm's discount rate
Two porjects are considered to be contingent if
The acceptance of one projects depends on the acceptance of the other
Apple has seen its share prices drop to near $500 per share. Which reason below is the greatest factor in the decline?
The rise of Samsung is impacting Apple's market share
What is the likely effect on South Florida real estate from the death of Chavez
There will be downward pressure on real estate as some of the main purchasers of real estate are now out of the market
A debenture bond has a greater risk than a mortgage bond
True
A lease is typically classified as an annuity due
True
All else equal, the greater the Beta, the greater the required return
True
As the rate of interest increases the PV of a lump sum decreases
True
Beta represents the systematic risk of a stock compared to the systematic risk of a market portfolio
True
In the housing update article, there is concern by builders because the number of new houses being built declined in January
True
In the personal finance article, you are spending too much if your credit card balance has not changed in the past year
True
The USPS is going to discontinue delivery service on Saturdays
True
The amount of interest paid in an amortized loan is greatest in the first year
True
The current ratio is always equal or greater than the quick ratio
True
The term that applies to a new product hurting the sales of an existing product is referred to as
cannibalization
Net Working Capital is a measure of a firm's
liquidity
Common stock holders are
owners of the firm
