Desafio CFA - Readings 35 & 36 | Take the Quiz

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CFA Level 1 - Financial Analysis Quiz

Test your knowledge on critical financial analysis concepts with our comprehensive quiz based on Readings 35 and 36 of the CFA Level 1 syllabus. This quiz consists of 12 engaging questions designed to challenge your understanding of capital budgeting, cost of capital, and investment appraisal.

Prepare yourself for a stimulating experience that includes:

Multiple choice questions
Real-world application scenarios
Instant feedback on your responses

12 Questions3 MinutesCreated by AnalyzingData202

Leia as instruções com atenção antes de iniciar:

-O quiz é baseado nas readings 35 e 36 do CFA Level 1 2018. Você deve dominar o conteúdo antes de responder as questões

-É recomendado que você tenha suas anotações com fórmulas e calculadora financeira ou científica em mãos antes de começar. A calculadora do seu computador deve bastar

-Cada questão tem o tempo máximo de resposta de 3 minutos

-Boa sorte!

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Two mutually exclusive projects have conventional cash flows, but one project has a larger NPV while the other project has a higher IRR. Which of the following least likely explains this conflict?

A. Reinvestment rate assumption.

B. Size of the projects’ initial investments.

C. Risk of the projects as reflected in the required rate of return.

A company’s optimal capital budget is best described as the amount of new capital required to undertake all projects with an internal rate of return greater than the:

A. Marginal cost of capital.

B. Cost of new debt capital.

C. Weighted average cost of capital.

A project has the following annual cash flows:

Year 0:	Year 1:	Year 2:	Year 3:	Year 4:
-$4,662,005	$22,610,723	-$41,072,261	$33,116,550	-$10,000,000

Which of the following discount rates most likely produces the highest net present value (NPV)?

A. 8%

B. 10%

C. 15%

A company’s optimal capital budget most likely occurs at the intersection of the:

A. Net present value and internal rate of return profiles.

B. Marginal cost of capital and net present value profiles.

C. Marginal cost of capital and investment opportunity schedule

Using the debt-rating approach to find the cost of debt is most appropriate when market prices for a company’s debt are:

A. stable.

B. unreliable.

C. Below par value

A twenty-year $1,000 fixed rate non-callable bond with 8% annual coupons currently sells for $1,105.94. Assuming a 30% marginal tax rate and an additional risk premium for equity relative to debt of 5%, the cost of equity using the bond-yield-plus-risk-premium approach is closest to:

A. 9.9%.

B. 12.0%.

C. 13.0%.

The cost of which source of capital most likely requires adjustment for taxes in the calculation of a firm’s weighted average cost of capital?

A. Bonds

B. Common stock

C. Preferred stock

The following information is available for a firm. Market Risk Premium: 7.0% Risk-free Rate: 2.0% Comparable Firm Return: 10.4% Comparable Firm Debt-to-Equity Ratio: 1.0 Comparable Firm Tax Rate: 40.0% The firm’s unlevered beta is closest to:

A. 0.75.

B. 1.05.

C. 1.20.

Which method of calculating the firm’s cost of equity is most likely to incorporate the long-run return relationship between the firm's stock and the market portfolio?

A. Dividend discount model

B. Capital asset pricing model

C. Bond-yield-plus risk-premium

An analyst gathers the following information about the capital structure and before-tax component costs for a company. The company’s marginal tax rate is 40 percent.

Capital component

Book Value (000)

Market Value (000)

Component cost

Debt

Preferred stock Common stock

$100

$20

$100

$80

$20

$200

10%

12%

The company’s weighted average cost of capital (WACC) is closest to:

A. 8.55%.

B. 9.95%.

C. 10.80%.

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Desafio CFA - Readings 35 & 36

CFA Level 1 - Financial Analysis Quiz

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