Financial Management Essay

The required wander of return is rs = 10. 1%, and the constant growth rate is g = 4. 0%. What is the current stock price? a. $23. 11b. $23. 70c. $24. 31d. $24. 93e. $25. 57e 8- Ratio outline involves analyzing financial statements in order to appraise a firms financial position and strength. a. True b. anomalousA 9- Profitability ratios show the combined make of liquidity, asset management, and debt management on operating results. a. True b. False A 10 One problem with ratio analysis is that relationships can be manipulated. For example, if our current ratio is greater than 1. , then borrowing on a short-term basis and using the funds to build up our currency account would cause the current ratio to increase. a. True b. False B 11 Arshadi Corp. s sales last year were $52,000, and its fall assets were $22,000. What was its total assets turnover ratio? a. 2. 03 b. 2. 13 c. 2. 25 d. 2. 36 e. 2. 48 D 12 Rappaport Corp. s sales last year were $320,000, an d its net income later taxes was $23,000. What was its profit margin on sales? c a. 6. 49% b. 6. 83% c. 7. 19% d. 7. 55% e. 7. 92% 3 The first, and most critical, step in constructing a set of forecasted financial statements is the sales forecast. a.Trueb. Falsea 14- According to the Capital addition Pricing Model, investors are primarily concerned with portfolio risk, not the risks of individual stocks held in isolation. Thus, the relevant risk of a stock is the stocks division to the riskiness of a well-diversified portfolio. a. True b. False a 18 variegation forget normally reduce the riskiness of a portfolio of stocks. a. True b. False 19- If the returns of two firms are negatively correlated, then one of them must mystify a negative beta. . True b. False a 20 Which of the sideline statements best describes what you should expect if you randomly select stocks and add them to your portfolio? a. Adding more than such(prenominal)(prenominal) stocks will reduce the p ortfolios unsystematic, or diversifiable, risk. b. Adding more such stocks will increase the portfolios expected rate of return. c. Adding more such stocks will reduce the portfolios beta coefficient and thus its systematic risk. d. Adding more such stocks will have no effect on the portfolios risk. e. Adding more such stocks will reduce the portfolios market risk precisely not its unsystematic risk. A