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Busn602 Final Exam Set 2

  • Date Submitted: 03/30/2016 10:07 PM
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BUSN602 Final Exam   Set 2
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Part 1 of 1 - 100.0 Points
Question 1 of 25 4.0 Points
As a general rule, the capital structure that maximizes stock price also:

A.minimizes the weighted average cost of capital  
B.maximizes the weighted average cost of capital  
C.minimizes the required rate of return on equity  
D.maximizes the cost of debt
Question 2 of 25 4.0 Points
The constant dividend growth model assumes:

A.a constant annual dividend  
B.a constant dividend growth rate for no more than the first 10 years  
C.that the discount rate must be greater than the dividend growth rate  
D.two of above are true assumptions

Question 3 of 25 4.0 Points
As a general rule, the capital structure that:

A.minimizes the cost of equity also maximizes the stock price  
B.maximizes the stock price also minimizes the weighted average cost of capital  
C.minimizes the cost of debt also maximizes the expected earnings per share  
D.none of the above is a true statement
Question 4 of 25 4.0 Points
The financial statement that provides a snapshot view of the financial condition of a business at a point in time is the:

A.balance sheet  
B.income statement  
C.statement of cash flows  
D.statement of retained earnings
Question 5 of 25 4.0 Points
Consolidated Edison has just paid an annual dividend of $3 per share. If the expected growth rate for Con Ed is 10%, and your required rate of return is 16%, how much are you willing to pay for this stock?

D.none of the above
Question 6 of 25 4.0 Points
Internal rate of return (IRR) and net present value (NPV) methods:

A.generally arrive at the same accept/reject decisions  
B.are less sophisticated than...


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