Financial

A firm's investment decision is also called its:

The sale of financial assets by a corporation is also referred to as the:

The following entities issue bonds to engage in long-term borrowing EXCEPT:

The IRR is defined as:

If the sign of the cash flows for a project changes two times, then the project likely has:

A stock return's beta measures:

An analyst computes a beta coefficient with a low standard error. This implies that

After completing a project analysis, an analyst should rely on which tool to make a final recommendation on the project?

Modigliani and Miller's Proposition I states that:

Value additivity works for: I) combining assets; II) splitting up of assets; III) the mix of debt securities issued by the firm

The trade-off theory of capital structure predicts that:

Financial slack includes: I) cash; II) marketable securities; III) readily salable real assets; IV) ready access to debt markets or bank loans

An option that can be exercised any time before its expiration date is called:

Suppose you buy a call and lend the present value of its exercise price. You could match the payoffs of this strategy by:

For European options, the value of a put is equal to:

Which of the following bonds is typically not secured?

All else equal, which of the following features will increase the value of a convertible bond?

Which of the following statements is NOT true? I) The lessee does not have to buy the equipment. II) The lessee is responsible for making the lease payments. III) Lease payments are not tax-deductible. IV) The lessee may give up the depreciation tax shield.

Which of the following statements are correct? I) Strong sustainability framework claims that economic issues fall complete within the biosphere II) Triple Bottom Line is also known as the People, Planet, Profit framework III) Triple Bottom Line found its origin in the insurance practice

A corporation, potentially, has infinite life because it:

A perpetuity is defined as a sequence of:

The managers of a firm can maximize stockholder wealth by:

A high proportion of the value of a growth stock typically comes from:

The payback period rule accepts all projects for which the payback period is:

Which of the following methods of evaluating capital investment projects incorporates the time value of money concept? I) payback period; II) discounted payback period; III) net present value (NPV); IV) internal rate of return

Which of the following is an estimate of standard error?

The cost of capital for a project depends on:

The following are drawbacks of sensitivity analysis EXCEPT

The accounting break even point occurs when:

If an individual wants to borrow with limited liability, he/she should

Given corporate taxes, why does adding debt to the capital structure increase firm value? I) Extra cash flow goes to the firm's investors rather than the tax authorities. II) Earnings before interest and taxes are fully taxed at the corporate rate. III) Personal tax rates are the same as marginal corporate tax rates

In Miller's model, when the quantity (1 - - - TC)(1 TpE) = (1 Tp), then:

When faced with financial distress, managers of firms acting on behalf of their shareholders' interests will tend to: I) favor high risk, high - -return projects even if they have negative NPV; II) refuse to invest in low return projects with pos - - risk, low itive NPVs; III) delay the onset of bankruptcy as long as they can

If the volatility of the underlying asset decreases, then the:

All else equal, if the volatility (variance) of the underlying stock increases, then the:

Which of the following are examples of real options? I) the option to expand if an investment project succeeds; II) the option to wait (and learn) before investing; III) the option to shrink or abandon a project; IV) the option to vary the mix of output or the firm's production methods

The recovery rate on defaulting debt is the highest for the following type of debt:

If the lessor borrows most of the purchase price of a leased asset, the lease is called a:

The choice of the proper mixture of debt and equity, used to finance a corporation, is also referred to as the:

Which of the following statements regarding the NPV rule and the rate of return rule is false?

Which of the following bonds has the greatest volatility?

The payback period rule accepts all projects for which the payback period is:

The principal short-term assets are: I) cash; II) accounts receivable; III) inventories; and IV) accounts payable

On a graph with common stock returns on the Y-axis and market returns on the X-axis, the slope of the regression line represents:

The accounting break-even point occurs when:

The total market value (V) of the securities of a firm that has both debt (D) and equity (E) is

The effect of financial leverage on the performance of the firm depends on the:

The MM theory with taxes implies that firms should issue maximum debt. In practice, this is not true because: I) debt is more risky than equity; II) bankruptcy and its attendant costs are a disadvantage to debt; III) the payment of personal taxes may offset the tax benefit of debt

When one uses the weighted average cost of capital (WACC) to value a levered firm, the interest tax shield is:

The owner of a regular exchange-listed put-option on a stock:

The Black-Scholes option pricing model employs which five parameters?

The following are practical challenges in applying real-options analysis: I) Real options can be complex. II) The real options problems may not be well structured. III) Competition may reduce or change the value of real options.

Long-term bonds that are unsecured obligations of a company are called:

If the lessor borrows most of the purchase price of a leased asset, the lease is called a:

When a financial institution puts social and environmental impact before economic impact while assessing investment or lending proposals, then this is an example of:

Which of the following statements are correct? I) The theory on cost of sustainability capital is used by the NPSV approach II) The SNPV is based on the value additivity principle III) The SNPV assumes that also non-financial values area used

Which of the following statements are correct? I) Government stimulates more private investment in infrastructure, because the private sector can be more efficient II) Government stimulates more private investment in infrastructure, because the budget of the government are continually under pressure III) Government stimulates more private investments in infrastructure, because the rate of return can be much higher for the project