FIN 370 Week 2 Assignment Help | Quiz | University Of Phoenix
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- 02 Dec 2019
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FIN 370 Week 2 Assignment Help | Quiz | University Of Phoenix
1.
Rx Corp. stock was $60.00 per share at the end of last year. Since then,
it paid a $1.00 per share dividend last year. The stock price is currently
$62.50. If you owned 400 shares of Rx, what was your percent return?
Multiple Choice
o
5.83 percent
o
5.60 percent
o
4.17 percent
o
1.67 percent
2.
The total risk of the
S&P 500 Index is equal to:
Multiple Choice
o
diversifiable risk.
o
efficient frontier risk.
o
modern portfolio risk.
o
no diversifiable risk.
3.
An investor owns $8,000
of Adobe Systems stock, $5,000 of Dow Chemical, and $3,000 of Office Depot.
What are the portfolio weights of each stock?
Multiple Choice
o
Adobe: 0.5; Dow Chemical: 0.31; Office
Depot: 0.19
o
Adobe: 0.5; Dow Chemical: 0.19; Office
Depot: 0.31
o
Adobe: 0.5; Dow Chemical: 0.13; Office
Depot: 0.27
o
Adobe: 0.5; Dow Chemical: 0.32; Office
Depot: 0.18
4.
Which of the following is
a true statement?
Multiple Choice
o
If a firm takes on less risky new projects
over time, the firm itself will become riskier.
o
The risk and return that a firm
experienced in the past is also the risk level for its future.
o
Firms can quite possibly change their
stocks' risk level by substantially changing their business.
o
If a firm takes on riskier new projects
over time, the firm itself will become less risky.
Which of these is similar
to the Capital Market Line, except that risk is characterized by beta instead
of standard deviation?
Multiple Choice
o
Market risk line
o
Security market line
o
Probability market line
o
Stock market line
6.
ABC Inc. has a dividend
yield equal to 5 percent and is expected to grow at a 12 percent rate for the
next seven years. What is ABC's required return?
Multiple Choice
o
17.0 percent
o
2.4 percent
o
7.0 percent
o
6.7 percent
When firms use multiple
sources of capital, they need to calculate the appropriate discount rate for
valuing their firm's cash flows as:
Multiple Choice
o
a sum of the capital components costs.
o
a weighted average of the capital
components costs.
o
they apply to each asset as they are
purchased with their respective forms of debt or equity.
o
a simple average of the capital components
costs.
8.
Oberon Inc. has a $20
million ($1,000 face value) 10-year bond issue selling for 99 percent of par
that pays an annual coupon of 7.25 percent. What would be Oberon's before-tax
component cost of debt?
Multiple Choice
o
7.02 percent
o
8.15 percent
o
7.40 percent
o
6.12 percent
9.
Carrie D's has 6 million
shares of common stock outstanding, 2 million shares of preferred stock outstanding,
and 10 thousand bonds. If the common shares are selling for $15 per share, the
preferred shares are selling for $28 per share, and the bonds are selling for
109 percent of par, what would be the weight used for equity in the computation
of Carrie D's WACC?
Multiple Choice
o
57.36 percent
o
61.64 percent
o
33.33 percent
o
75.00 percent
10.
Which of these is an estimated
WACC computed using some sort of proxy for the average equity risk of the
projects in a particular division?
Multiple Choice
o
Pure-play WACC
o
Average WACC
o
Proxy WACC
o
Divisional WACC
USA 
India