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FINC 306 FINAL Exam Questions And Answers Guaranteed Solutions. $12.99   Add to cart

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FINC 306 FINAL Exam Questions And Answers Guaranteed Solutions.

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If you are doing an NPV analysis and using the WACC as the discount rate, how do you account for interest paid to bondholders? - correct answer through the cost of debt portion of the WACC When estimating the WACC, which is the best measure of the f...

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  • July 9, 2024
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  • 2023/2024
  • Exam (elaborations)
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RealGrades
FINC 306 FINAL
If you are doing an NPV analysis and using the WACC as the discount rate, how do you account for interest paid to bondholders? - correct answer through the cost of debt portion of the WACC
When estimating the WACC, which is the best measure of the firm's cost of debt - correct answer the YTM for its bonds
When estimating the WACC, which is the best measure of the firm's cost of equity - correct answer the stock's expected return according to the CAPM
When computing NPV, how do you account for the fact that bond interest is tax deductible? - correct answer multiply the cost of debt by (1-t)
What does EBIT stand for? - correct answer earnings before interest and taxes
how should you handle an interest payment on debt when computing incremental cash flow? - correct answer ignore it
how should you handle depreciation when computing incremental cash flow? - correct answer subtract it just like on an income statement, but add it back after computing taxes
an increase in net working capital represents - correct answer a cash outflow
what is the goal of the financial manager? - correct answer maximize shareholder wealth
which best describes NPV - correct answer the present value of all expected inflows net of the present value of all expected outflows which series of cash flows represents a "normal" project? - correct answer CF0= -100; CF1 = 200; CF3 = !00; CF4 = 200
all else equal, which will result in a LOWER NPV for a normal project - correct answer higher discount rate
a bonds entire value is typically repaid at maturity - correct answer true
selling a stock is equivalent to selling the rights to all of the stock's future dividends - correct answer true
all else equal, a coupon -paying bond has a greater interest risk than a zero-coupon bond - correct answer true
if a bonds coupon rate is less than its yield to maturity it sells at premium - correct answer false
if you submit an order through an online broker to purchase 10 shares of zoom, how much money would zoom receive - correct answer nothing
which of the following is most likely to change during the life of a bond - correct answer yield to maturity
you purchase a stock for $35. At the end of one year, the stock pays a cash dividend of $2. After receiving the dividend, you sell the stock for $36. On which of the following gains do you owe taxes? - correct answer both the $1 capital gain and the $2 dividend
suppose a bond sells at a premium to par value. This implies - correct answer the bond has as built in capital loss.
the typical correlation between two randomly selected US stocks is -1 - correct answer False

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