Seçmeli Ara Sınav - Busıness Fınance Iı

Soru 1:

... is the return a company requires to decide if an investment meets capital return requirements. Which one of the following completes the sentence?

A) Debt financing B) A convertible bond C) LIBOR D) The cost of equity E) FOREX

Soru 2:

Which one of the following is the composite cost of the last dollar of new capital raised?

A) Capital asset pricing model B) Weighted average cost of capital C) Bond-yield-plus-risk-premium D) Dividend-growth model E) The marginal cost of capital

Soru 3:

What is long term financing?

A) The long-term financial requirements are the internal sources such as retained earning and depreciation provide financing to the corporate. B) The long-term financial requirement means the finance needed to acquire land and building for business concern, purchase of plant and machinery and other fixed expenditures. C) Long term financingis legal and tax issues. D) Long term financingis bank lending capacity and relation with banks. E) TheLong term financingis based on the same principle as the revolving loans, but the limit of the credit is set as a debit of a company’s current account.

Soru 4:

Which of the following is not negatively affected by bankruptcy risk?

A) The tax rate B) The risk of the stockholders C) Debts financing D) The free cash flows E) The underinvestment in positive NPV projects

Soru 5:

A & B Corp. has the following optimal capital structure: Long-term Debt 20% Preferred Stocks 10% Common Equity 40% The interest rate on the company’s long-term borrowings is 7%. Preferred stockholders require 13% return on their investments and common shareholders are paid 15% on equity capital. The company has a tax rate of 40%. What is the WACC for A & B Corp.?

A) 4.24% B) 4.60% C) 5.46% D) 6.30% E) 8.14%

Soru 6:

In common stocks, if the company is wound up, the ordinary or equity shareholders have the right to get the claims on assets. These rights are only available to the equity shareholders. Which of the following terms is used to refer to this situation?

A) The maturity of the shares B) Right to control C) Pre-emptive right D) Residual claims on assets E) Voting rigths

Soru 7:

Which one of the following refers to the risk-adjusted present value of revenue minus all costs, including the opportunity cost of capital?

A) Competitive advantage B) Economic profit C) Corporate strategy D) Externalities E) Incremental cash flow

Soru 8:

Which capital budgeting evaluation technique tells the length of time it takes cumulative present values of cash inflows will be equal to the initial cash outflow?

A) Payback period B) Discounted payback period C) Net present value D) Initial rate of return E) Modified internal rate of return

Soru 9:

Positive economic profits (or positive net present value projects) can stem from two sources: 1) ...... , 2) creating competitive advantage. Which of the following completes the sentence above?

A) Corporate strategy B) Competitive markets C) Investment projects D) Market imperfections E) Capital budgeting

Soru 10:

ABC Corp. in the above example grows at 6%. Last year’s dividend was $1.50 per share and currently the stock sells at 29. If ABC issues new shares to raise external equity, flotation costs of $4/share will be incurred. What is the cost of external equity?

A) 0.0952 B) 0.1015 C) 0.1020 D) 0.1125 E) 0.1224

Soru 11:

Which of the following is not a capital investment project analysis technique?

A) Payback period B) Profitability index C) Decision tree analysis D) Net present value E) Internal rate of return

Soru 12:

In which of the following is the interest rate floating and not fixed?

A) Callable bonds B) Convertible bonds C) Preferred bonds D) Bonds with sinking funds E) Indexed bonds

Soru 13:

Which one of the following is not among the assumptions of Modigliani and Miller Capital Structure Theory?

A) There are no bankruptcy costs B) Investors have homogenous expectations C) There are high taxes D) Investors and companies can borrow at the same rate with no restrictions E) There are no transaction costs in financial asset trading

Soru 14:

Which one of the following is an intermediate model, compromising between the net income approach and the net operating income approach?

A) Modigliani and Miller Capital Structure Theory B) Agency theory C) Signaling theory D) Trade-off theory E) Traditonal approach

Soru 15:

.... is an indicator of financial risk and occurs in case of borrowing. Which one of the following completes the sentence above?

A) Financial leverage B) Financial risk C) Debt D) Equity E) Degree of operating leverage

Soru 16:

what is common stock?

A) A common stock is a representation of partial dept in a company, and is the dept of company. B) If the company issues only common stock, with preferred shares then common stock equals the proffered shares. C) A company's bookvalueis equal to a company's assets minus its liabilities and found on the company's balance sheet. D) Common stock, also named as equity shares, represents equity or an ownership position in a corporation. E) The most common measure of a stock is the price/earnings ratio, which takes the share price and divides it by a company's annual net income.

Soru 17:

What is the weighted average cost of capital?

A) The average cost of the capital mix B) The weight of the debt component C) The average cost of the different types of capital D) The weight of the equity component E) The return a company requires to decide

Soru 18:

Appraisal of the financing sources Evaluation of the sources' risk Examination of the maturity-cost relation of debt Equalization of working capital and assets with liabilities Estimation of the cost of equity for different capital budget amounts Which of the above does assessing the target capital structure require?

A) I, II and III B) III, IV and V C) I, II, III, IV D) I, II, III and V E) II, III, IV and V

Soru 19:

What is the other factors affected by the capital structure of an enterprise

A) Factors that affect the capital structure are: tangibility, firm size, profitability, and free cash flows. B) Other factors are structure of assets, non-debttax shields, profitability, size of the company and free cash flow. C) Factors that affect the capital structure are, economic environment, industry specific factors and firm-specific factors. D) It is important for a company to have an appropriate capital structure E) There are two types of capital structure according to the nature and type of the firm, viz, (a) simple and (b) complex. a. simple: when the capital structure is composed of equity capital only or with retained earnings, the same is known as simple capital structure.

Soru 20:

The cost of equity is the return a company requires to decide if an investment meets capital return requirements. A firm uses cost of equity to assess the relative attractiveness of investments A business can raise equity capital either through a common stock issue or a preferred stock issue. Which of the statements above is/are true for cost of equity?

A) Only I B) I and II C) II and III D) I and III E) I, II and III