a) Price fixing. INCORRECT 4. Eric is acting as a disclosed dual agent in a transaction. Which statement is true? c) Eric may not represent the seller’s interests to the detriment of the buyer.
What advantage does buying stock on margin offer Victor? Under the following conditions the percentage earned by Victor is: 50.5% One advantage Victor has buying the stock on margin is that he will be able to use the borrowed funds to increase his percentage of return. 3. What would be the percentage returns if the sale prices had been $50 or $100? If the sale price was $50: The percentage of returns for Darin would be at a loss of -16.3% The percentage of returns for Victor would be at a loss of -31.8% If the sale price was $100: The percentage of returns for Darin would be at a gain of 66.1% The percentage or returns for Victor would be at a gain of 105.4% 4.
Answer: False Difficulty: Med LO: 2 Page: 414 T F 7. There is no relationship between risk and safety. Answer: False Difficulty: Med LO: 2 Page: 412 T F 8. The potential return of any investment should be directly related to the risk that the investor assumes. Answer: True Difficulty: Med LO: 2 Page: 413 T F 9.
What is the payback period statistic? What is the acceptance benchmark when using the payback period statistic? This is how long it takes to receive back the money of an investment. It does not use the time value of money, it does not work with variables of cash flow. It is a good choice when an investor needs their return in a certain time period.
* Diverse products Diverse products and revenue should help shield the business from shocks in any one part of their business. Different products have different characteristics. Those characteristics do not always match; therefore, a company can lower their risk by investing in a business with low correlations with other products. This lowers risk and increases the value of the business over the long-term. WEAKNESS: * Company size "Company Size" will have a long-term negative impact on this entity, which subtracts from the entity's value.
Big Bear’s lease contract states that if Big Bear’s financial condition suffers a material adverse change, they would be in default. This is objectively determinable. The third condition is that predefined requirements that pertain solely to the lessee have been established which will determine if default has occurred. In Big Bear’s case the “material adverse change” is not predefined. Therefore the third condition has not been met and the penalty payment would be included in the minimum lease payment.
If you choose 40 random employees from the corporation, the standard error would equal 6/Square root of 40 = .95 days. The 12 days in this department corresponds to (12-8.2)/.95 = 4 standard errors above the corporation average of 8.2. This is much higher than two or three standard errors, and it appears to be beyond chance variation. Chapter 9 Exercise 3 The p- value tells you how likely it would be to get results at least as extreme as this if there was no difference in the taste and only chance variation was operating. In this problem, p-value of 0.02 means that, if there is no difference in taste, then there is only 2% chance that 70% or more people would declare one drink better than the
FIN500 Assignment 3 (individual work) Total points: 12 Part I. Multiple choice questions/problems: 1. Other things equal, when residual cash flows are low, stock values will be B. low. 2. Investors buy stock at the C. quoted ask price.
* Product lines that were not covering their avoidable costs could be dropped. * New product development is likely to receive more focus as the review program identifies areas of increasing demand. * Gourmet is likely to benefit from better monitoring of competitors’ product development, prices, and market share trends. F. This is an open-ended question; the specific steps are likely to vary based on the circumstances and the information found. Analysis for a given product might include the following general steps: * Identify the product to be analyzed by using a quantitative monitoring technique (e.g., size decline in contribution margin or sales) or some other method * Obtain and analyze detailed revenue and cost data prior periods; look for negative trends * Obtain and analyze the correlation of sales for this product with other products; look for potential relationships with other products that might influence a decision to drop the product * Obtain and analyze industry information about the product; look for information about trends in customer tastes, competition,
Note - we excluded Agile Connections from our comparable set as it had negative net income and thus do not reflect the risk profile and operations of our company. CAPM: re = 4.25% + .611106(5%) = 7.30553% B. This is not the same discount rate that should be used on the terminal value. The terminal value should be discounted by WACC. The discount rate above should only be used to discount unlevered cash flows.