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STR/581 Capstone Final Examination, Part 2

March 21, 2015

 STR/581 Week 4 Capstone Final Examination, Part 2 is Available for  $15 only. 

 

Description of some questions:

Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?        

       most common form of organization       

       reduced legal liability for investors          

       lower taxes       

       harder to transfer ownership

 Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28.  Serox pays a $1.10 dividend per year.  What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)              

       32%       

       16%       

       12%       

 

       40%

       External financing needed: Jockey Company has total assets worth $4,417,665. At year-end it will have net income of $2,771,342 and pay out 60 percent as dividends. If the firm wants no external financing, what is the growth rate it can support?

       30.3%   

       27.3%   

       32.9%   

       25.1% 

      An unrealistic budget is more likely to result when it:             

       has been developed by all levels of management.          

       has been developed in a top down fashion.       

       has been developed in a bottom up fashion.

        is developed with performance appraisal usages in mind

Next year Jenkins Traders will pay a dividend of $3.00.  It expects to increase its dividend by $0.25 in each of the following three years.  If their required rate of return if 14 percent, what is the present value of their dividends over the next four years?           

       $12.50  

       $11.63  

       $9.72    

             $13.50

Ajax Corp. is expecting the following cash flows - $79,000, $112,000, $164,000, $84,000, and $242,000 – over the next five years.  If the company’s opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)  

       $480,906             

       $429,560             

       $414,322             

       $477,235

 

20. Jack Robbins is saving for a new car. He needs to have $21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar)             

       $26,454

       $19,444

       $22,680

             $16,670

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