Corporate Finance Mock Final Exam Duration 90 minutes I Trắc nghiệm Câu 1 Which one of the following terms is defined as one minus the dividends paid expressed as a percentage of net income? A Dividen[.]
Corporate Finance Mock Final Exam Duration: 90 minutes I Trắc nghiệm: Câu 1: Which one of the following terms is defined as one minus the dividends paid expressed as a percentage of net income? A Dividend payout ratio B Net profit margin C Gross margin D Plowback ratio Câu 2: The goal of financial management is to maximize the ……… A the current value per share of the existing stock B the book value per share of the existing stock C the market value of the dividend per share D the future value of the fixed assets Câu 3: Which one of the following is NOT a decision function of financial management? A capital structure B working capital management C long-term capital management D capital budgeting Câu 4: Rank the liquidity of the following assets from the lowest to the highest: A Inventory, account receivable, cash, equipment B Building, account receivable, Equipment, cash C Equipment, account receivable, cash, inventory D Building, inventory, account receivable, cash Câu 5: Given the price-per-earnings (P/E) ratio of, approximatelly, 15 What would be Pfizer’s earnings per share (EPS) if it’s stock price at the end of last year was $48? A 3.8 B 4.50 C 3.4 D 3.2 Câu 6: Which of the following is an NOT example of operating expense? A Administrative expenses B Salaries and wage C Sales and marketing fees D Capital expenses Câu 7: Company A's dividend is expected to grow by 6% per year, lasting indefinitely Determine the dividend paid last year if the discount rate is 16% and the value of the stock is $21.20 A B C D $3.2 $2.8 $2.2 $2.0 Câu 8: Which one of the following accurately defines an ordinary annuity? A A series of increasing payments paid for a definitive period of time B A series of constant or level cash flows that occur at the beginning of each period for some fixed number of period C A series of constant or level cash flows and the cash flows continue forever D A series of constant or level cash flows that occur at the end of each period for some fixed number of period Câu 9: What is the future value of $10,500 invested for years at 10% compounded annually? A $22,483.60 B $27,890.17 C $22,507.68 D $32,209.33 Câu 10: What is one reason that make shareholders reluctant to issue new equity? A New equity often changes the ownership of the firm B New debt often leads to dilution in firm’s ownership C Debt is normally much more expensive than new equity D None of the above Câu 11: Highland Coffee’s dividend is expected to grow at 20% for the next five years After that, the growth is expected to be 4% forever What is the case of this dividend growth model? A Zero growth B Constant growth C Two-stage growth D Normal growth Câu 12: Which of the following is a disadvantage of the net present value (NPV) method? A It does not take into account cash flows over a project’s full life B It does not take into account the time value of money C It does not indicate a link between the investment amount and the profitability D The net present value method does not have any disadvantages Câu 13: Which of the following factors NOT influence the capital investment cash flows of a project A B C D The market research expense of the project The current price of the machine needed for the project The change in corporate tax rate The change in the price of the materials needed fot the project Câu 14: What are the conditions that make both IRR and NPV yield the same result? I The weighted average cost of capital of the project is higher than its IRR II The project is a mutually exclusive with another project III The project is an independent project IV The project has a normal cash flow A I, III B II, IV C I, IV D III, IV Câu 15: Mei Mei Corporation has just paid a dividend of $3 per share The dividend of this company grows at a steady rate of % per year and the appropriate discount rate is 15% Based on this information, what will the stock price of Mei Mei Corporation be in five years? A $60.50 B $68.04 C $73.06 D $78.05 Câu 16: A firm had an operating cash flow (OCF) of $50,500 The firm spent $34,000 on fixed assets and increased net working capital by $2,400 Cash flow to creditors is $4,500 What is the amount of the cash flow to shareholders? A $15,300 B $13,400 C $11,200 D $9,600 Câu 17: A company has a cost of equity (Ke) of 18% and an after-tax cost of debt (Kd x (1-T)) of 6% It has 40% debt in its capital structure It has two investment opportunities of similar risk to its existing business Project A will yield 9% and project B will yield 15% and be financed by equity Given that the company apply the same capital structure to all of its projects The company should … A Accept A alone B Accept B alone C Accept both projects D Accept neither project Câu 18: The CFO of ABC Corporation prepare the following table to report to the CEO on the outlook of the company investment portfolio What would be the expected return if half of the portfolio were in A, with the remainder equally divided between B and C? A B C D II 10.3% 9.4% 8.5% 7.7% Tự luận: ABC Company has identified the following two mutually exclusive projects: a If the discount rate is 13 %, what is the NPV for project B? Which project will the company choose if it applies the NPV decision rule? b Calculate the payback period for project B If the required payback period is 2.5 years, which project will the company choose? A bank offers you two payment options You could have $95,000 per year for the next two years, or you could have $70,000 per year for the next two years, plus a $45,000 bonus today Bonuses are paid immediately and salaries are paid at the end of each year If the interest rate is 10% compounded annualy, which option would you prefer? Song Lam Company has a revenue of $27,500, operating expenses of $13,800, depreciation expense of $2,300 and interest expense of $1,100 If the tax rate is 25%, what is the operating cash flow (OCF) of this company? You are working for Company A and it is currently using payback period (PBP) to decide whether to accept or reject a project What would you say to convince your manager to swith to NPV instead? Explain the liquidity of a business What problems will businesses face in the case of high liquidity? Where there is low liquidity? LNG Inc., has an equity multiplier (EM) of 2.2, total asset turnover (ATO) of 1.35 What is the target profit margin (PM) LNG Inc., should aim for if it wants to maintain the current return on equity (ROE) of 62.37%?