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Experience:  BS Accounting
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For Neo (Hello, Ive seen you answered some of these questions

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For Neo (Hello, I've seen you answered some of these questions below already, please help. Thanks)

Problems - (Please show all work)
1. Determine the price of $1,000 per value bond that has a ten-year maturity and 8% coupon while the market rate of interest is 6%.

2. Determine the value of a share of preferred stock that has a $5 dividend while the market rate of interest is $10.

3. Determine the value of share of common stock that has a $1 dividend, 8% growth rate, and a required rate of return of 12%.

4. An IBM bond pays 7% interest and a Florida state bond pays 5%. If you are in a 40% tax bracket, which should you purchase? (Assume that the level of risk is the same for both bonds.)

Next questions true or false
1. ___If inventory is sold on credit, the quick ratio declines.

2. ___the more rapidly receivables turn over, the more funds the firm has tied up in accounts receivable.

3. ___The higher the ratio of debt to total assets, the smaller is the use of financial leverage

4. ___The use of financial leverage may permit the firm to increase the return on equity.

Multiple Choice
1. The present value of a dollar
1. increases with lower interest rates.
2. increases with higher interest rates.
3. increases with longer periods of time.
4. decreases with longer periods oftime.
a. 1 and 3
b. 1 and 4
c. 2 and 3
d. 2 and 4

2. Which is smallest if interest rates are 10%?
a. present value of $100 annuity for five years
b. future value of $100 annuity for five years
c. present value of $100 after five years
d. $100 received right now

3. Default on a bond is
a. failure to meet any of the terms of the indenture.
b. failure to make dividend payments.
c. only failure to make interest payments.
d. failure to maintain more assets than liabilities.

4. The price of a bond depends on
1. the bond’s coupon.
2. the maturity date.
3. current interest rates.

a. 1 and 2
b. 1 and 3
c. 2 and 3
d. 1,2, and 3

5. If a bond is selling for a discount, that implies
1. interest rates have fallen.
2. interest rates have risen.
3. the yield to maturity exceeds the current yield.
4. the yield to maturity is less than the current yield.

a. 1 and 3
b. 1 and 4
c. 2 and 3
d. 2 and 4

6. Which of the following reduces the investor’s risk associated with investing in bonds?
1. a sinking fund
2. a variable interest rate
3. a call feature

a. 1 and 2
b. 1 and 3
c. 2 and 3
d. 1, 2, and 3

7. Which of the following is equity?
1. investments
2. additional paid-in capital
3. retained earnings

a. 1 and 2
b. 1 and 3
c. 2 and 3
d. 1, 2, and 3

8. Common features of preferred stock include
a. variable, cumulative dividends.
b. variable, noncumulative dividends.
c. fixed, noncumulative dividends.
d. fixed cumulative dividends.

9. a stock dividend causes the firm’s
a. assets to increase.
b. equity to increase.
c. liabilities to remain the same.
d. assets to decrease.

10. A stock split
a. increases equity.
b. generates capital gains.
c. increases retained earnings.
d. does not affect liabilities.

11. When a company repurchases its own stock, there is a reduction in
1. total equity.
2. total assets.
3. corporate taxes.
4. total liabilities.

a. 1 and 2
b. 1 and 3
c. 2 and 3
d. 3 and 4

12. A P/E ratio considers
a. profits relative to earnings.
b. price of the stock relative to earnings.
c. price of a preferred stock relative to earnings.
d. profits relative to equity.

13. When risk analysis is introduced into the dividend-growth model, the required rate of return considers the firm’s
a. growth rate.
b. dividend.
c. beta coefficient.
d. post dividends.

14. If the valuation of a stock is $20 and it currently sells for $25, then
1. the stock is undervalued.
2. the stock is overvalued.
3. the investor should establish a short position.
4. the investor should establish a long position.

a. 1 and 3
b. 1 and 4
c. 2 and 3
d. 2 and 4

15. Current liabilities include
a. stock.
b. bonds.
c. accounts receivable.
d. accrued interest payable.

16. Which of the following is a cash inflow?
a. an increase in accounts receivable
b. a decrease in inventory
c. distributing cash dividends
d. a decrease in long-term debt

17. Which of the following is a cash outflow?
a. a new issue of bonds
b. a decrease in accounts receivable
c. an increase in plant
d. an increase in accounts payable.

18. A high current ratio suggests that the firm
a. has a small amount of long-term debt.
b. is carrying little inventory.
c. is able to meet its current obligations.
d. is profitable.
Submitted: 2 years ago.
Category: Homework
Expert:  Angela--Mod replied 2 years ago.
Hi, I’m a moderator for this topic and I wonder whether you’re still waiting for an answer. If you are, please let me know and I will do my best to find an Expert to assist you right away. If not, feel free to let me know and I will cancel this question for you. Thank you!

Customer: replied 2 years ago.

Hey Angela,

 

Yes, I'm still waiting for an answer. I noticed that majority of my questions have been answered before by Neo and was looking for his help, nonetheless, if he's not available,any expert would do. Thanks and I look forward to hearing from you. Have a nice day.

Expert:  Angela--Mod replied 2 years ago.
Thank you. I have sent a message to your requested Expert. If you do not receive a reply in a reasonable period of time, please let me know and I will assist further. The question is also open to the other Homework Experts in the meantime.
Expert:  Neo replied 2 years ago.
Good day!

Welcome to JustAnswer!

When is your deadline?

Customer: replied 2 years ago.
Hello Neo.

I have about a week to get it turned in. so, I'm not in a big rush. Thanks.
Expert:  Neo replied 2 years ago.
Ok.

Customer: replied 2 years ago.

Hello Neo,

 

I'm just checking to see if you were able to complete the assignment above. Please let me know when you expect to finish. Thanks in advance.

Customer: replied 2 years ago.
Relist: No answer yet.
Expert:  Neo replied 2 years ago.
THIS ANSWER IS LOCKED!
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Category: Homework
Satisfied Customers: 12044
Experience: BS Accounting
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