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1. If Paola Pizza Parlors stock started the year at $10 per share, paid $0.50 in cash dividends during the year, and ended the year ay $11.50 per share, then the total investment yield or rate of return for the year would be:
A) 0.10
B) 0.30
C) 0.50
D) 0.20
2. If the seller is in a low tax bracket and the buyer in a high one, it may be advantageous to:
A) Structure the program to decrease the interest rate and decrease the price
B) Structure the program to decrease the interest rate and increase the price
C) Structure the program to increase the interest rate and lower the price
D) Structure the program to increase the interest rate and increase the price
3. "When earnings have once been
"realized", so that they can
be expressed with some approach to accuracy in the company's accounts, they are already water under the mill and have no direct bearing on what the property in question is now worth. Value, under any plausible theory of capitalized earning power is necessarily forward looking. It is an expression of the advantage that an owner of the property may expect to secure from the ownership in the future. The past earnings are therefore beside the point, save as a possible index of future earnings". This statement correctly expresses:
A) Prophesied gross and net earnings
B) Enterprise value
C) Realized earnings
D) Realized earning verses prospective earnings
4. list can yield insight into the company's profitability, liquidity and even viability. However, many relatively small companies do not prepare them.
A) Receivables list
B) Aged receivables list
C) Inventory list
D) Prepaid expense list
5. Which of the following is Correct?
A) The equity-to-total-capital ratio is simply 2 minus the short-term-debt-to-inventory capital ratio, so here it is needed to compute both.
B) The equity-to-income coverage-capital ratio is simply 1 minus the short-term-debt-to- total coverage ratio, so here usually is no need to compute both.
C) The equity-to-total-capital ratio is simply 1 minus the long-term-debt-to-total capital ratio, so here usually is no need to compute both.
D) The debt-to-equity ratio is simply 1 minus the long-term-debt-to-total capital ratio, so here usually is no need to compute both.
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: C | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: C |
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