A companyâs book-value based debt ratio (defined here as total liabilities divided by total assets) is 67.4% which strikes me as being a little too high relative to the competition. I decide to recalculate the debt ratio using market-value based information. From the notes to the financials the company has revealed that the total market value of their interest-bearing debt currently totals $1.9 Billion and from the balance sheet I determine that all other non interest-bearing debt and liabilities total $4.6 billion. I determine the price of the companyâs stock as of the date of the balance sheet to be $32/share and the company currently has 203,125,000 shares of stock outstanding. Identify the true statement:
Select one:
a. The market-value based total equity value is approximately $6.5 billion
b. Total market-value based assets equal approximately $13.0 billion
c. The market-value based debt ratio is approximately 50.0%
d. All of the statements above are true
e. All of the statements above are false
A U.S. corporation that operates internationally looks to project sales for the coming year based on previous results. The U.S. dollar is projected to be strong and grow stronger relative to the foreign currencies in which the company operates. If you are making the projections for the companyâs sales in the future, generally speaking what is the impact a strong U.S. dollar will have on the projected foreign sales for this international company?
Select one:
a. A negative (downward) impact as we convert the foreign currency to domestic (U.S. ) currency
b. A positive (upward) impact as we convert the foreign currency to domestic (U.S. ) currency
c. Not enough information to speculate
d. No impact
am looking at a balance sheet for a company and I encounter a line that looks as follows:
PPE (net of accumulated depreciation totaling $ 1.65 million) $ 8.76 million
Identify the true statement regarding this companyâs PPE:
Select one:
a. The Book Value (or Net Book Value â same thing) of this companyâs PPE is $ 7.11 million
b. The historic purchase price of this PPE in total was $ 10.41 million
c. Gross PPE for this company would be $ 7.11 million
d. The historic purchase price of the PPE is $ 8.76 million
e. All of the statements shown are false
am considering buying a preferred stock that pays a fixed dividend of $2.00 per share. The dividend has stayed constant (no increases) for the past 15 years and is projected to do so by me going forward as far out as I can tell. I desire a return on all of my equity investments of 8.0% per year. What should I be willing to pay for one share of this preferred stock?
Select one:
a. $30/share
b. $25/share
c. $16/share
d. $20/share but only if I hold the stock for ten years
e. insufficient information to answer this question
Identify the false statement:
Select one:
a. Stock prices generally move in tandem with Free Cash Flow to Equity Investors
b. Stock prices tend to rise with increases in dividends
c. The Capital Asset Pricing Model is a "single factor" model
d. All of the above are true
e. All of the above are false
A companyâs book-value based debt ratio (defined here as total liabilities divided by total assets) is 67.4% which strikes me as being a little too high relative to the competition. I decide to recalculate the debt ratio using market-value based information. From the notes to the financials the company has revealed that the total market value of their interest-bearing debt currently totals $1.9 Billion and from the balance sheet I determine that all other non interest-bearing debt and liabilities total $4.6 billion. I determine the price of the companyâs stock as of the date of the balance sheet to be $32/share and the company currently has 203,125,000 shares of stock outstanding. Identify the true statement:
Select one:
a. The market-value based total equity value is approximately $6.5 billion
b. Total market-value based assets equal approximately $13.0 billion
c. The market-value based debt ratio is approximately 50.0%
d. All of the statements above are true
e. All of the statements above are false
A U.S. corporation that operates internationally looks to project sales for the coming year based on previous results. The U.S. dollar is projected to be strong and grow stronger relative to the foreign currencies in which the company operates. If you are making the projections for the companyâs sales in the future, generally speaking what is the impact a strong U.S. dollar will have on the projected foreign sales for this international company?
Select one:
a. A negative (downward) impact as we convert the foreign currency to domestic (U.S. ) currency
b. A positive (upward) impact as we convert the foreign currency to domestic (U.S. ) currency
c. Not enough information to speculate
d. No impact
am looking at a balance sheet for a company and I encounter a line that looks as follows:
PPE (net of accumulated depreciation totaling $ 1.65 million) $ 8.76 million
Identify the true statement regarding this companyâs PPE:
Select one:
a. The Book Value (or Net Book Value â same thing) of this companyâs PPE is $ 7.11 million
b. The historic purchase price of this PPE in total was $ 10.41 million
c. Gross PPE for this company would be $ 7.11 million
d. The historic purchase price of the PPE is $ 8.76 million
e. All of the statements shown are false
am considering buying a preferred stock that pays a fixed dividend of $2.00 per share. The dividend has stayed constant (no increases) for the past 15 years and is projected to do so by me going forward as far out as I can tell. I desire a return on all of my equity investments of 8.0% per year. What should I be willing to pay for one share of this preferred stock?
Select one:
a. $30/share
b. $25/share
c. $16/share
d. $20/share but only if I hold the stock for ten years
e. insufficient information to answer this question
Identify the false statement:
Select one:
a. Stock prices generally move in tandem with Free Cash Flow to Equity Investors
b. Stock prices tend to rise with increases in dividends
c. The Capital Asset Pricing Model is a "single factor" model
d. All of the above are true
e. All of the above are false
Related questions
Total Current Asset Current Ratio Effect on Net Income
| a | Cash is acquired through issuance of additional common stock | ____ | ____ | ____ | |||||
| b | Merchandise is sold for cash | ____ | ____ | ____ | |||||
| c | Federal income tax due for the previous year is paid | ____ | ____ | ____ | |||||
| d | A fixed asset is sold for less than book value | ____ | ____ | ____ | |||||
| e | A fixed asset is sold for more than book value | ____ | ____ | ____ | |||||
| f | Merchandise is sold on credit | ____ | ____ | ____ | |||||
| g | Payment is made to trade creditors for previous purchases | ____ | ____ | ____ | |||||
| h | A cash dividend is declared and paid | ____ | ____ | ____ | |||||
| I | Cash is obtained through short- term bank loans | ____ | ____ | ____ | |||||
| J | Short- term notes receivable are sold at a discount | ____ | ____ | ____ | |||||
| k | Marketable securities are sold below cost | ____ | ____ | ____ | |||||
| L | Advances are made to employees | ____ | ____ | ____ | |||||
| m | Current operating expenses are paid | ____ | ____ | ____ | |||||
| n | Short- term promissory notes are issued to trade creditors in exchange for past due accounts payable | ____ | ____ | ____ | |||||
| o | 10- year notes are issued to pay off accounts payable | ____ | ____ | ____ | |||||
| p | A fully depreciated asset is retired | ____ | ____ | ____ | |||||
4 DEBT RATIO- Bartley Barstools has an equity multiplier of 2.4, and its assets are financed with some combination of long-term debt and common equity. What is its equity ratio? What is its debt ratio?
6 MARKET/BOOK RATIO- Jaster Jets has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt and $6 billion in common equity. It has 800 million shares of common stock outstanding, and its stock price is $32 per share. What is Jaster
