FIN 210 Midterm MockSQL

FIN 210
Midterm Mock
Multiple Choice Questions
1. Which one of the following is a capital structure decision?
(a) determining which one of two projects to accept
(b) determining how to allocate investment funds to multiple projects
(c) determining the amount of funds needed to finance customer purchases of a new product
(d) determining how much debt should be assumed to fund a project
2. During the year, Kitchen Supply increased its accounts receivable by $130, decreased its inventory by$75, and decreased its accounts payable by $40. How did these three accounts affect the firm’s cash flows for the year?(a) cash decreased by$245(b) cash increased by $165(c) cash decreased by$95
(d) cash increased by $95<br>3. Your grandmother is gifting you$125 a month for four years while you attend college to earn your bachelor’s degree. At a 6.5 percent annual interest rate with monthly compounding, what are these payments worth to you on the day you enter college?(a) $5,201.16(b)$5,270.94(c) $5,509.19<br>(d)$5,800.00
4. You are borrowing $17,800 to buy a car. The terms of the loan call for monthly payments for 5 years at 8.6 annual percentage rate. What is the amount of each payment?(a)$287.71(b) $366.05(c)$301.12
(d) $342.76<br>5. You just won a national sweepstake! For your prize, you opted to receive never-ending payments. The first payment will be$12,500 and will be paid one year from today. Every year thereafter, the payments will increase by 3.5 percent annually. What is the present value of your prize at a discount rate of 8 percent?(a) $166,666.67(b)$248,409.19(c) $277,777.78<br>(d)$291,006.12
6. You are paying an effective annual rate of 18.974 percent on your credit card. The interest is compounded monthly. What is the annual percentage rate on this account?(a) 17.50 percent(b) 18.00 percent(c) 18.25 percent
(d) 18.64 percent
7. Which of the following increase the price sensitivity of a bond to changes in interest rates?I increase in time to maturityII decrease in time to maturityIII increase in coupon rateIV decrease in coupon rate(a) I and III only(b) I and IV only(c) II and III only
(d) II and IV only
8. The Fisher Effect primarily emphasizes the effects of on an investor’s rate of return.
(a) inflation
(b) market
(c) maturity
(d) default
9. Blackwell bonds have a face value of $1,000 and are currently priced at$984. The bonds have a 5 percent coupon rate. What is the current yield on these bonds?(a) 4.67 percent(b) 4.78 percent(c) 5.08 percent
(d) 5.33 percent
10. Which one of the following statements is correct?
(a) The capital gains yield is the annual rate of change in a stock’s price.
(b) A constant dividend stock cannot be valued using the dividend growth model.
(c) An increase in the required return will decrease the capital gains yield.
(d) Preferred stocks have constant growth dividends.
Short-代 写FIN 210 Midterm MockSQL Answer Questions
1. Suppose that a young couple has just had their first baby girl, Katie, and they wish to ensure that enough money will be available to pay for her college education. Currently, college tuition, books, fees, and other costs, average $12,500 per year. On average, tuition and the other costs have historically increased at a rate of 4$3000 into an account with 7% interest rate on every Katie’s birthday since her first, what will be the amount of money available on Katie’s 18th birthday?
(c) After Katie turns 18, she enters a four-year college. The couple leave the above college fund in the same account (paying 7% interest rate), making no further deposits. Assum- ing that college costs continue to increase at 4%, is the college fund enough to cover all four years of Katie’s undergraduate education? Please provide numbers to support your answer. (Hint: Assume that Katie needs to pay education cost at the begining of each period.)
2. Suppose that Ford company issued a ten-year $1000 bond (face value) with a 6$900, what was the yield to maturity on this bond?
3. Please solve the following questions about stocks.
(a) Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 15 percent a year for the next 4 years and then decreasing the growth rate to 3.5 percent per year. The company just paid its annual dividend in the amount of $0.20 per share. What is the current value of one share of this stock if the required rate of return is 15.5 percent?<br>(b) Northern Gas recently paid a$2.80 annual dividend on its common stock. This dividend increases at an average rate of 3.8 percent per year. The stock is currently selling for $26.91 a share. What is the market rate of return?<br>(c) Great Lakes Health Care common stock offers an expected total return of 9.2 percent. The last annual dividend was$2.10 a share. Dividends increase at a constant 2.6 percent per year. What is the dividend yield?
(d) Winter Time Adventures is going to pay an annual dividend of $2.86 a share on its common stock next year. This year, the company paid a dividend of$2.75 a share. The company adheres to a constant rate of growth dividend policy. What will one share of this common stock be worth five years from now if the applicable discount rate is 11.7 percent?






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