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FIN 571 Final Exam Guide (New)

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1.A proxy fight occurs when:
the board of directors disagree on the members of the management team.
2. A stakeholder is any person or entity:
3.Which one of the following is least apt to help convince managers to
work in the best interest of the stockholders?
threat of a proxy fight
pay raises based on length of service
implementation of a stock option plan
4.Financial managers primarily create firm value by:
maximizing current sales.
investing in assets that generate cash in excess of their cost.
5.First City Bank pays 7 percent simple interest on its savings account
balances, whereas Second City Bank pays 7 percent interest compounded
annually.
If you made a $59,000 deposit in each bank, how much more money
would you earn from your Second City Bank account at the end of 9 years?
(Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
12299.09
6.What is the future value of $3,136 invested for 12 years at 6.50 percent
compounded annually?
7.What is the present value of $12,750 to be received 3 years from today if
the discount rate is 5.50 percent?
use this website:
http://www.moneychimp.com/calculator/present_value_calculator.htm
8. Six months ago, you purchased 1,200 shares of ABC stock for $21.20 a
share and have received total dividend payments of $.60 a share. Today,
you sold all of your shares for $22.20 a share. What is your total dollar
return on this investment?
9.Six months ago, you purchased 100 shares of stock in ABC Co. at a
price of $43.89 a share. ABC stock pays a quarterly dividend of $.10 a