Midterm CF Lớp 2

 Interest earned on both the initial principal and the interest reinvested from prior periods is called:  

• free interest.
• simple interest.
• interest on interest.
• compound interest.

Binh An Corp. has a 13% return on assets (ROA) at the ending of the period and a 70% retention ratio. What is its internal growth rate?  

• 8.23%
• 9.54%
• 10.01%
• 11.84%

What is the future value of $3,000 annual payments for 3 years at 7% interest?

• $3,675
• $3,992
• $7,873
• $9,645

 Russell's Deli has cash of $136, accounts receivable of $95, accounts payable of $210, and inventory of $409. What is the value of the quick ratio?  

• 0.31
• 0.53
• 0.71
• 1.10

Which one of the following best states the primary goal of financial management?  

• maximize current dividends per share
• maximize the current value per share
• increase cash flow and avoid financial distress
• minimize operational costs while maximizing firm efficiency

 The average of a firm's cost of equity and aftertax cost of debt that is weighted based on the firm's capital structure is called the:  

• reward to risk ratio.
• weighted capital gains rate.
• structured cost of capital.
• weighted average cost of capital.

 Which one of the following is the financial statement that shows the accounting value of a firm's equity as of a particular date?  

• income statement
• creditor's statement
• balance sheet
• statement of cash flows

 Which one of the following is a risk that applies to most securities?  

• unsystematic
• diversifiable
• systematic
• asset-specific

 Jerilu Markets has a beta of 1.09. The risk-free rate of return is 2.75 percent and the market rate of return is 9.80 percent. What is the risk premium on this stock?  

• 13.43 percent
• 7.03 percent
• 7.68 percent
• 10.43 percent

 Unsystematic risk:  

• can be effectively eliminated by portfolio diversification.
• is compensated for by the risk premium.
• is measured by beta.
• is measured by standard deviation.