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2. FIN 534 Entire Course (Str Course) FIN 534 Week 1 Chapter 1 Solution (Str Course) • FIN 534 Week 1 Chapter 1 Solution • FIN 534 Week 1 Chapter 2 Solution • FIN 534 Week 2 Chapter 3 Solution • FIN 534 Week 3 Chapter 4 Solution • FIN 534 Week 3 Chapter 5 Solution • FIN 534 Week 4 Chapter 6 Solution • FIN 534 Week 4 Chapter 7 Solution • FIN 534 Week 5 Chapter 8 Solution • FIN 534 Week 5 Chapter 9 Solution • 1. Which of the following statements is CORRECT? • a. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability. • b. It is generally easier to transfer one’s ownership interest in a partnership than in a corporation. fin 534 genius Peer Educator/fin534geniusdotcom

3. FIN 534 Week 1 Chapter 2 Solution (Str Course) FIN 534 Week 1 DQ 1 (Str Course) • 1. Which of the following statements is CORRECT? • a. Typically, a firm’s DPS should exceed its EPS. • b. Typically, a firm’s EBIT should exceed its EBITDA. • Imagine a startup company of your own and briefly trace its development from a sole proprietorship to a major corporation with a focus on how that development would be financed. fin 534 genius Peer Educator/fin534geniusdotcom

4. FIN 534 Week 1 DQ 2 (Str Course) Fin 534 Week 1 Quiz 1 (Str Course) • Discuss ways that the basic concepts we have discussed in this chapter directly impact your life. Provide specific examples to support your response. • Question 1 • You recently sold 100 shares of your new company, XYZ Corporation, to your brother at a family reunion. At the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. fin 534 genius Peer Educator/fin534geniusdotcom

5. FIN 534 Week 2 Chapter 3 Solution (Str Course) FIN 534 Week 3 Chapter 4 Solution (Str Course) • 1. Which of the following statements is CORRECT? • a. The ratio of long-term debt to total capital is more likely to experience seasonal fluctuations than is either the DSO or the inventory turnover ratio. • 1. A $50,000 loan is to be amortized over 7 years, with annual end-of-year payments. Which of these statements is CORRECT? • a. The annual payments would be larger if the interest rate were lower. fin 534 genius Peer Educator/fin534geniusdotcom

6. FIN 534 Week 3 Chapter 5 Solution (Str Course) FIN 534 Week 3 Quiz 2 (Str Course) • 1 . Three $1,000 face value bonds that mature in 10 years have the same level of risk, hence their YTMs are equal. Bond A has an 8% annual coupon, Bond B has a 10% annual coupon, and Bond C has a 12% annual coupon. Bond B sells at par. • Question 1 • Which of the following statements is CORRECT? • a. Since companies can deduct dividends paid but not interest paid, our tax system favors the use of equity financing over debt financing, and this causes companies’ debt ratios to be lower fin 534 genius Peer Educator/fin534geniusdotcom

7. FIN 534 Week 4 Chapter 6 Solution (Str Course) FIN 534 Week 4 Chapter 7 Solution (Str Course) • 1. Which of the following statements is CORRECT? • a. If you add enough randomly selected stocks to a portfolio, you can completely eliminate all of the market risk from the portfolio. • 1. Which of the following statements is CORRECT? • a. The constant growth model takes into consideration the capital gains investors expect to earn on a stock. fin 534 genius Peer Educator/fin534geniusdotcom

8. FIN 534 Week 4 Quiz 3 (Str Course) FIN 534 Week 5 Chapter 8 Solution (Str Course) • 1. Which of the following statements is CORRECT? • 1) A time line is not meaningful unless all cash flows occur annually • 2) Time lines are useful for visualizing complex problems prior to doing actual calculations • 1. Which of the following statements is CORRECT? • a. Put options give investors the right to buy a stock at a certain strike price before a specified date. • b. Call options give investors the right to sell a stock at a certain strike price before a specified date. fin 534 genius Peer Educator/fin534geniusdotcom

9. FIN 534 Week 5 Chapter 9 Solution (Str Course) FIN 534 Week 5 Quiz 4 (Str Course) • 1. Bankston Corporation forecasts that if all of its existing financial policies are followed, its proposed capital budget would be so large that it would have to issue new common stock. Since new stock has a higher cost than retained earni • Finance 534 week 5 quiz 4 • Question 1 • Assume that in recent years both expected inflation and the market risk premium (rM • − rRF) have declined. fin 534 genius Peer Educator/fin534geniusdotcom

10. FIN 534 Week 6 Chapter 10 Solution (Str Course) FIN 534 Week 6 Chapter 11 Solution (Str Course) • 1. Which of the following statements is CORRECT? • a. The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. • 1. Which of the following statements is CORRECT? • a. An externality is a situation where a project would have an adverse effect on some other part of the firm’s overall operations. If the project would have a favorable effect on other operations, then this is not an externality. fin 534 genius Peer Educator/fin534geniusdotcom

11. FIN 534 Week 6 Quiz 5 (Str Course) FIN 534 Week 7 Chapter 12 Solution (Str Course) • Finance 534 week 6 Quiz5 • Question 1 • Call options on XYZ Corporation’s common stock trade in the market. Which of the following statements is most correct, holding other things constant? • 1. Which of the following statements is CORRECT? • a. Perhaps the most important step when developing forecasted financial statements is to determine the breakdown of common equity between common stock and retained earnings. fin 534 genius Peer Educator/fin534geniusdotcom

12. FIN 534 Week 7 Chapter 13 Solution (Str Course) FIN 534 Week 7 Quiz 6 (Str Course) • 1. Suppose Leonard, Nixon, & Shull Corporation’s projected free cash flow for next year is $100,000, and FCF is expected to grow at a constant rate of 6%. If the company’s weighted average cost of capital is 11%, what is the value of its operations? • Finance 534 week 7 quiz 6 • Question 1 • Which of the following statements is CORRECT? • Answer • Question 2 • Which of the following statements is CORRECT? fin 534 genius Peer Educator/fin534geniusdotcom

13. FIN 534 Week 8 Chapter 14 Solution (Str Course) FIN 534 Week 8 Chapter 15 Solution (Str Course) • 1. Which of the following statements about dividend policies is CORRECT? • a. Modigliani and Miller argue that investors prefer dividends to capital gains because dividends are more certain than capital gains. They call this the ―bird-in-the hand‖ effect. • 1. Which of the following statements best describes the optimal capital structure? • a. The optimal capital structure is the mix of debt, equity, and preferred stock that maximizes the company’s earnings per share (EPS). fin 534 genius Peer Educator/fin534geniusdotcom

14. FIN 534 Week 8 Quiz 7 (Str Course) FIN 534 Week 9 Chapter 16 Solution (Str Course) • Finance 534 week 8 quiz 7 • This quiz consist of 30 multiple choice questions. The first 15 questions cover the material in Chapter 12. The second 15 questions cover the material in Chapter 13. • 1. Swim Suits Unlimited is in a highly seasonal business, and the following summary balance sheet data show its assets and liabilities at peak and off-peak seasons (in thousands of dollars): • Peak Off-Peak fin 534 genius Peer Educator/fin534geniusdotcom

15. FIN 534 Week 9 Quiz 8 (Str Course) FIN 534 Week 10 Chapter 17 Solution (Str Course) • Question 1 • Which of the following statements about dividend policies is correct? • Question 2 • If a firm adheres strictly to the residual dividend policy, the issuance of new common stock would suggest that • 1. In Japan, 90-day securities have a 4% annualized return and 180-day securities have a 5% annualized return. In the United States, 90-day securities have a 4% annualized return and 180-day securities have an annualized return fin 534 genius Peer Educator/fin534geniusdotcom

16. FIN 534 Week 10 Quiz 9 (Str Course) FIN 534 Week 11 Quiz 10 (Str Course) • Finance 534 week 10 quiz 9 • Question 1 • Which of the following statements is NOT CORRECT? • Question 2 • Which of the following statements is CORRECT? • Finance 534 week 11 quiz 10 • Question 1 • Suppose DeGraw Corporation, a U.S. exporter, sold a solar heating station to a Japanese customer at a price of 143.5 million yen fin 534 genius Peer Educator/fin534geniusdotcom

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