Question 36 The market value of a firm’s equity is frequently called: Select one

Question

Question 36

The market value of a firm’s equity is frequently called:

Select one:

a. Market capitalization.

b. Total financing.

c. Debt-equity reconciliation.

d. Debt-equity consolidation.

e. Total assets.

Question 37

Etling Inc.'s dividend is expected to grow at 7% for the next two years and then at 3% forever. If the current dividend is $3 and the required return is 15%, what is the price of the stock?

Select one:

a. $25.54

b. $26.15

c. $29.45

d. $25.10

e. $27.68

Question 38

An operating lease is usually a shorter-term lease in which the lessor is responsible for insurance, taxes, and upkeep.

Select one:

True

False

Question 39

A typical car loan is an example of an amortized loan.

Select one:

True

False

Question 40

You are considering a project that costs $150 and has expected cash flows of $55, $60.50, and $66.55 over the next three years. If the appropriate discount rate for the project's cash flows is 10%, what is the net present value of this project?

Select one:

a. $0.00

b. $0.71

c. $64.10

d. The NPV is negative

e. $19.79

Explanation / Answer

Question 36
The market value of a firm’s equity is frequently called:
Select one:
a. Market capitalization.

Question 37
Etling Inc.'s dividend is expected to grow at 7% for the next two years and then at 3% forever. If the current dividend is $3 and the required return is 15%, what is the price of the stock?
=3*1.07/1.15+3*1.07^2/1.15^2+(3*1.07^2*1.03/(15%-3%))/1.15^2
Select one:
e. $27.68

Question 38
An operating lease is usually a shorter-term lease in which the lessor is responsible for insurance, taxes, and upkeep.
Select one:
True

Question 39
A typical car loan is an example of an amortized loan.
Select one:
True

Question 40
You are considering a project that costs $150 and has expected cash flows of $55, $60.50, and $66.55 over the next three years. If the appropriate discount rate for the project's cash flows is 10%, what is the net present value of this project?
=-150+55/1.1+60.5/1.1^2+66.55/1.1^3=0
Select one:
a. $0.00

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