Question 76 Which of the following is least likely to be useful to an analyst when estimating the cost of raising capital through the issuance of non-callable, nonconvertible preferred stock? A) The firm’s corporate tax rate. B) The preferred stock’s dividend rate. C) The market price of the preferred stock. D) The stated par value of the preferred issue.
Question 77 Gerome Masseratti, CFA, and Charles Bataglia are working together to develop pro forma financial statements for one of their firm’s clients. During their initial meeting, Bataglia made a statement with which Masseratti did not agree. Which of the following is most likely the statement that Masseratti objected to? A) “It is acceptable to forecast future sales using the average compound growth rate of historic sales.” B) “A firm’s return on equity (ROE) will not necessarily increase just because the firm’s total asset turnover increases.” C) “If sales are forecast accurately, there is no need to reconcile the pro-forma income statement and balance sheet.” D) “The original DuPont formula decomposes return on equity (ROE) into three components: net profit margin, total asset turnover, and leverage.”
Question 78 Which of the following actions would most likely have a positive influence on shareholder value? A) Adopting a poison pill. B) Only one class of common equity has been issued. C) Executive board members regularly attend the board meetings. D) Change from annual elections to elections every three years.
Question 79 Andrew Dawns holds a large position in the common stock of Savory Doughnuts, Inc (Savory). After an extensive executive search, Savory is about to announce a new CEO. There are three candidates for the CEO position, and each is viewed differently by the market. Dawns estimates the following probabilities for the rate of return on Savory’s stock in the year following the announcement: Candidate
| Probability of Being Chosen
| Rate of Return if Chosen | One | .50 | 10% | Two | .15 | -40% | Three | .35 | 20% |
Based on Dawn’s estimates, the expected rate of return on Savory’s stock following the announcement of the new CEO is closest to: A) 6%. B) -2%. C) 10%. D) 9%.
Question 80 In the graph of the Security Market Line (SML) below (not drawn to scale): ♣ The letters X, Y, and Z represent risky asset portfolios. ♣ The SML crosses the y-axis at 5%. ♣ The market premium is 7.5%. ♣ Portfolio Y and Z have the same expected return (holding period return).
Using the graph and the list of assumptions, determine which of the following statements is most accurate. A) The expected return on Portfolio Y is 15%. B) The required return on Portfolio X is 10.25%. C) The expected return on Portfolio Z is greater than the required return. D) Portfolio X is overvalued.
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发表于 2008-11-6 16:26
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