BUSN 602 Final Exam (American Public University)

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BUSN 602 Final Exam (American Public University)

1. The security market line can be used to determine the expected return on a security if we know the:
2. The constant dividend growth model assumes:
3. The ________ is the discount rate that equates the present value of the cash inflows with the initial investment.
4. Which one of the following types of ratios indicates the ability to meet short-term obligations to creditors as they come due?
5. A business organization that receives the limited liability of a corporation but is taxed as a proprietorship or partnership is called a:
6. The accrued liabilities of a firm are:
7. Which one of the following is not considered to be a generally recognized type of market efficiency?
8. The internal rate of return concept is best explained by which of the following?
9. The estimate of how quickly a firm may grow by maintaining a constant mix of debt and equity is called:
10. The primary purpose of the liquidity ratios is to determine:
11. Firms issue more equities than bonds for the following reason(s).
12. All of the following accounts are considered to be current liabilities on the balance sheet except:
13. On the balance sheet, total assets minus net fixed assets equals:
14. If a person requires greater return when risk increases, that person is said to be:
15. Why is depreciation considered to be a “tax shield”?
16. The ability of a firm to meet its short-term debt obligations as they come due is indicated by which of the following ratios:
17. A sinking fund:
18. Unsystematic risk is also known as:
19. The ratio between the present value of a project’s cash inflows and the present value of its initial investment is called the:
20. A firm’s business risk is measured by the variability in which one of the following over time:
21. Variations in operating income over time because of variations in unit sales, price, cost margins, and/or fixed expenses are called
22. As a general rule, the capital structure that
23. The cost of capital for retained earnings:
24. Examples of external economic data required for project analysis include all of the following except:
25. A firm’s stock is expected to pay a $2 annual dividend next year, and the current $50 stock price is expected to rise to $53 over the next year. What is the expected return?