[PDF] Top 20 CFA 2018 Quest bank Level 2 Corporate Finance Capital Budgeting QBank

... 8. Brune Company has a budget of $10 million and must choose an optimal subset from the following five profitable projects that fits within its capital budget. The outlays and NPVs of the five projects are given ... Lihat dokumen lengkap

... 4. C is correct. Long-run profitability can be measured by the return on invested capital or ROIC. ROIC conveys how efficiently managers are using the capital resources of the company (including the risk ... Lihat dokumen lengkap

... 8. Cannon Co. is a small private leather goods’ manufacturer. An analyst estimates that the beta of similar public companies is 1.1, the risk free rate is 4% and market risk premium is 6%. In addition, the small stock ... Lihat dokumen lengkap

... 2. C is correct. FCFF represents cash flow generated by the operating assets of the business which is then used to pay debt holders, preferred stockholders and common shareholders. Hence Option A is incorrect. ... Lihat dokumen lengkap

... 3. CRG is in the manufacturing industry. The company has found it difficult to pay dividends over the years due to debt financing requirements. Moreover, even though the company has been profitable over the last few ... Lihat dokumen lengkap

... 9. B is correct. Statements A and C are true. Optimal capital structure is that capital structure at which the value of the firm is maximized. Using the MM Proposition with taxes, and in the presence of ... Lihat dokumen lengkap

... 8. C is correct. Non-ICT spending should eventually result in capital deepening and thus have less impact on potential GDP growth. In contrast, a growing share of ICT investments in the economy, through their ... Lihat dokumen lengkap

... of capital to different business divisions is inefficient since the overall value does not increase, and that the company may have diversified in order to hide poor operating ... Lihat dokumen lengkap

... 8. A is correct. Based on a debt-to-asset ratio of 0.40 and debt of $50,000, the value of assets is = $125,000 out of which equity is 125,000 - 50,000 = $75,000. The profit and fresh issue will increase equity by $20,000 ... Lihat dokumen lengkap

... boom-like conditions in the country, it is most likely that in the near term, the real exchange rate is increasing. At the same time, expected inflation in the EM country is also likely increasing and — given the ... Lihat dokumen lengkap

... 20. B is correct. The residual dividend policy is based on paying out dividends from internally generated funds after financing the current year’s capital expenditures. Liz’s current earnings = $100 million. ... Lihat dokumen lengkap

... Working capital will not be affected. The maintenance contract is a sunk cost and should not be included in the calculation. However, the use of the land is an opportunity cost, and should be included in the ... Lihat dokumen lengkap

... LO.e: Explain effective corporate governance practice as it relates to the board of directors and evaluate strengths and weaknesses of a company’s corporate governance practice.. 11.Co[r] ... Lihat dokumen lengkap

... The fair acquisition price of CMX based on the comparable transaction analysis is closest to: Valuation Variables CMX Comparable Companies LO.k: Evaluate a takeover bid and calculate t[r] ... Lihat dokumen lengkap

... H0. . ÿ I. *. 0 ÿ ÿ B 6ÿ 8=$ÿ 4 : : ÿ ÿ ;ÿ )0* 0: ÿ J *4 2 ÿ A,ÿ *. ÿ B0: ÿ 7 ÿ 7 . ÿ 07 . K 0Gÿ )0,ÿ 7 : ;ÿ 6. 0 1 +5ÿ ,ÿ J *4 ÿ ÿ 40 1ÿ ÿ +ÿ 8%$ÿ 4 : : 2 ÿ I. . : 59 ÿ H0. . ÿ ,0ÿ 0ÿ )@ÿ *. )ÿ 7 ÿ ... Lihat dokumen lengkap

...  Two dividend-paying companies A and B directly compete with each other. Both are all-equity financed and have recent dividend payout ratios averaging 35 percent. The corporate governance practices at Company B ... Lihat dokumen lengkap

... Evaluate capital projects and determine the optimal capital project in situations of 1) mutually exclusive projects with unequal lives, using either the least com- mon multiple of lives approach or the ... Lihat dokumen lengkap

... 35. Kayla Donovan, CFA, works as a portfolio manager for MacBrady Securities & Co. Some of her wealthy and large clients hold long positions on Swift Delivery, which is a courier service. After analyzing her ... Lihat dokumen lengkap

... 3. Analyst 1: While running a simulation, if there is a strong correlation across two inputs, we can pick only one of the two inputs. We can pick the input that has a bigger impact on value. Analyst 2: While ... Lihat dokumen lengkap

... According to the regulatory capture theory, the regulator is often dominated by individuals who are closely connected with the industry they should be regulating.. In such situations the[r] ... Lihat dokumen lengkap