FIN 571 NERD Education Specialist /fin571nerd.com FIN 571 NERD Education Specialist /fin571nerd.com | Page 4

should primarily strive to: 8.You invested in long-term corporate
bonds and earned 6.1 percent. During that same time period, large-
company stocks returned 12.6 percent, long-term government bonds
returned 5.7 percent, U.S. Treasury bills returned 4.2 percent, and
inflation averaged 3.8 percent. What average risk premium did you
earn? 11.Which one of the following accounts is included in
stockholders' equity? 18. Galaxy United, Inc. What is the days' sales
in receivables? (use 2009 values) 19. Marcie's Mercantile wants to
maintain its current dividend policy, which is a payout ratio of 35
percent. The firm does not want to increase its equity financing but is
willing to maintain its current debt-equity ratio. Given these
requirements, the maximum rate at which Marcie's can grow is equal
to: 20. The maximum rate at which a firm can grow while maintaining
a constant debt-equity ratio is best defined by its: 21.The return on
equity can be calculated as: 24. The length of time between the sale of
inventory and the collection of cash from receivables is called the:
25.The length of time between the acquisition of inventory and its
sale is called the: 28. What is the value of a 20-year, zero-coupon
bond with a face value of $1,000 when the market required rate of
return is 9.6 percent, compounded semiannually? 29.Next year's
annual dividend divided by the current stock price is called the: 32.
Jack's Construction Co. has 80,000 bonds outstanding that are selling
at par value. Bonds with similar characteristics are yielding 8.6
percent. The company also has 4 million shares of common stock
outstanding. The stock has a beta of 1.1 and sells for $40 a share. The
U.S. Treasury bill is yielding 4 percent and the market risk premium
is 8 percent. Jack's tax rate is 34 percent. What is Jack's weighted
average cost of capital? 34.When computing the weighted average
cost of capital, which of these are adjusted for taxes? 37. No matter
how many forms of investment analysis you employ: 38. Foamsoft
sells customized boat shoes. Currently, it sells 16,850 pairs of shoes
annually at an average price of $79 a pair. It is considering adding a
lower-priced line of shoes which sell for $49 38. Which statement
concerning the net present value (NPV) of an investment or a
financing project is correct? 36. The CAPM has an advantage over
DDM because the CAPM: 37. For a firm to create value it must: 40.
Marshall's purchased a corner lot five years ago at a cost of $498,000