Finance Quizzes - WU

suppose you deposit $5,000 into an account 2 years from today that earns 10% as annual interest, account will be worth?

$11,789.74

Wes Motors has total assets of $98,300, NWC of $11,300, owner's equity of $41,600, and LTD of $38,600 what is current assets?

$29,400

ANC plastics has net working capital of $15,400, current assets of $39,200, equity of $46,600, and LTD of $22,100. what is the fixed assets?

$53,300

one investment opportunity will pay you $750 per year, the first payment will be made today and the last payment will be in 11 years from today. What is the maximum price you'd like to pay for this opportunity? interest rate = 6%

$6,665.16

Victoria is interested in adding some KLM stock to her investment portfolio, observes that the stock just paid a dividend of 3.60; based on estimates dividends will grow at 25% for next 2 years and 5% forever after that; assume discount rate of 12.4% Victoria knows that stock is worth

$71.63

an investment opportunity will allow you to withdraw $150 every year for 10 years, the first cash flow will be received in year 4; you will receive additional $1,000 at the end of year 13. How much you would like to pay TODAY for the investment opportunity? interest rate = 10%

$982.14

Cash Flows = Y0: -48,100; Y1: 15,600; Y2: 28,900; Y3: 15,200 What is NPV? discount = 15%

-2,687.98

Stock A has beta of 1.11 Stock B has beta of .76 and expected return of 8.2% What is the beta of a portfolio that is invested 40% in Stock A and rest in Stock B?

.90

Web-Pay is a high-tech start up, company expects to pay its first dividend of .20 a share in Year 7 with annual dividend increases of 1.5% thereafter, at discount rate of 12% what is the current share price?

0.97

currently the couple has been offered chance to re-finance, new mortgage will be for 30 years at the lower rate of 3.6% APR with monthly compounding, calls for monthly payments, what is new monthly pmt if couple refinances? (balance from above question = 292,900.04; old 6%, 350,000 original take out)

1,331.66

an investor will deposit $4,000 NEXT year and expect to receive $6,000 five years from today, investor is using annual discount rate of?

10.67%

public company, is going to elect their board of directors for 2019, there are 9 seat openings and 20 candidates; company has 130,000 shares outstanding, if use cumulative voting, you have to have at least ____ shares to guarantee one candidate is elected.

13,001

Alpha industries stock had returns of 17%; -11%; 9%; 2%; and 26.5% in the last 5 years. what is the standard deviation of the stock's returns?

14.31%

What is average tax rate for firm with taxable income of 55,000? (0-50,000) = 15% (50,001+ )= 25%

15.9%

Based on the past 88 years, the inflation rate averaged 3% and the US T-Bill yield was 3.5%, and the historical risk premium on small-company stocks was 13.2%. If these averages hold, what average return should you expect to earn on small-company stocks?

16.7%

today you purchased a stock that will pay annual dividend of 1.90 per share next year; you require a 12% rate of return and the dividend increases at 3.5% annually; what will your capital gain in dollars be if you sell 3 years from now?

2.43

taxable bond has yield of 10% and a muni bond has yield of 8% at what tax rate would you be indifferent between two bonds?

20%

Best Toys Ever just paid its annual dividend of 1.78 per share. required return is 10.6% and the dividend growth rate is 1.23%. what will be the value of this stock 5 years from now?

20.44

a couple took out a 350,000 mortgage 10 years ago, original terms called for 30 years of monthly pmts at 6% APR. the couple has made all payments over the last 10 years, what is current mortgage balance of this couple's account?

292,900.04

assume today is Kevin's 25th birthday, he decides to deposit some money in his retirement account every year until his 65th birthday and the first deposit will be made next year. if Kevin wants to receive the amount you calculated in ^^ (616,475.13) on his 65th birthday, how much does he have to deposit in his retirement account each year? interest rate = 6%

3,983.38

Started year with net fixed assets of 74,925, end of year = 96,175 and company's income statement showed depreciation expense of 12,985 for the year. What was the company's net capital spending for the year? (net capital spending = new fixed assets purch - sold fixed assets)

34,235

you are offered an investment that will pay you 250 annually forever starting 5 years from today, interest rate =4%, what is value of this investment today?

5,343

you plan to deposit $1,000 in your savings account next year (t=1). from year 2 (t=2) you will further deposit $100 in your savings account every year for 10 years. you will have no further deposits nor withdrawals after that. what is the value of your saving account at t=14? interest rate = 12%

6,828.96

Kevin wants to withdraw 150,000 from his retirement account on each birthday from his 76th to his 85th to cover his living expense. assume interest rate = 6% how much will Kevin need in his retirement account on his 65th birthday?

616,475.13

an investor is considering buying a bond issued by Bear.com that pays coupon semi-annual, has 13-years remaining to maturity, and has a coupon rate of 8%, if the bond sells for 980 then the YTM is?

8.254

Alpha industries stock had returns of 17%; -11%; 9%; 2%; and 26.5% in the last 5 years. what is the average yearly return?

8.7%

Stock A has beta of 1.11 Stock B has beta of .76 and expected return of 8.2% What is the market return if the rf = 4.6% and the market is in equilibrium?

9.34%

Stock A has beta of 1.11 Stock B has beta of .76 and expected return of 8.2% What is required return on Stock A if the rf is 4.6% and market is equilibrium?

9.86%

Dufner issued 15-year bonds one year AGO at coupon rate of 4.8%, bonds make a semiannual payments, if the YTM on these bonds is 5.3% what is current (today) dollar price assuming 1,000 par value? (14 years to maturity)

951.02

Operating =

NI + Depr - increases in CA / + decreases in CA + increases in CL / - decreases in CL (accruals)

Sales - Expense =

Net Income

Payment of Dividends =

T-chart of RE

The rate of return on which one of the following has a risk premium of 0%

US Treasury Bills

Which of the following is correct? Assuming cash flows are conventional.

When the IRR is greater than the required return, the NPV is positive

the primary goal of a publicly-owned firm interested in serving its stockholders should be to

maximize the stock price

you deposited $500 in your account today. you plan to withdraw $100 in year 1 and deposit $300 in year 2. How much will be left in your account in year 5? annual discount rate = 10%

$1,058.15

Which of the following is the computation of the risk premium for individual security and the risk premium for the market? CAPM formula = E(Ri) = rf + (E(RM) - rf) * B

B(E(RM) - rf) ; E(RM) - rf

Net Working Capital =

CA - CL

Financing =

Changes in Long-Term Debt & OE

one advantage of corporations relative to sole proprietorship and partnership is the

ability to raise larger sums of equity capital than other organizational forms

you are trying to borrow money from AMS bank the bank provides two different choices 1. 6% with monthly compounding 2. 6.6% with quarterly compounding which account do you choose?

account 1

the potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?

agency

Which statement of the following is correct?

all else equal, a highly compensated business owner is more apt to purchase a muni bond than a minimum-wage employee

Semistrong form market efficiency states that investors cannot earn abnormal returns by trading on:

all publicly available information

The DuPont identity can be used to help a financial manager determine

asset management efficiency of a firm, degree of financial leverage used by a firm, profitability of a firm

Investing =

changes in Long-Term Assets

national distributors has 1,000 face value bonds outstanding with a market price of 1,200; bonds pay a semi annual coupon interest, mature in 11 years, and have YTM of 8%, what is coupon rate? bond is called?

coupon = 10.768%; selling at premium

What statement is true?

from a legal perspective, preferred stock is a form of corporate equity

fixed coupon bond has 20 years left until maturity has coupon rate of 5% and its current price P0. coupon paid semi annual; if YTM is always 10% and it will keep unchanged, bond's price 10 years later will be?

higher than P0

term structure of interest rates is primarily based on which three?

interest rate risk premium; real rate of interest; inflation premium

Stock A has beta of 1.11 Stock B has beta of .76 and expected return of 8.2% Currently the market is not in equilibrium and stock A has return of 8%; stock A is currently

over-valued

New Labs just announced that it has received a patent for a product that will eliminate all flu viruses, this news is totally unexpected and viewed as a major medical advancement. Which of the following reactions indicates the market for New Labs stock is efficient?

price of New Labs stock increases rapidly to a higher price then remains at that price

assuming a positive interest rate, which of the following investment opportunities do you think is the most valuable today?

receive $800 next year and $200 the year after

Total Cash Flow Changes = 200,000; CFOp = -1,200,000; CFIn = 900,000; CFFin = 500,000

shareholders should ask the manager why the firm's core business lost money

all else held constant, the price of a bond increases when the

time to maturity of a bond selling at discount decreases

Standard Deviation measures _____ risk while beta measures ____ risk

total ; systematic

Which of the following is the best example of unsystematic risk?

warehouse fire