Fin 534 week 8 quiz 7 (30 questions with answers) 99,99 scored
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Fin 534 week 8 quiz 7 (30 questions with answers) 99,99 scored

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  • 1. FIN 534 Week 8 Quiz 7 (30 questions with answers) 99,99 Scored PLEASE DOWNLOAD HEREFinance 534 week 8 quiz 7Question 1Last year Godinho Corp. had $250 million of sales, and it had $75 million of fixedassets that were being operated at 80% of capacity. In millions, how large couldsales have been if the company had operated at full capacity?Question 2Which of the following is NOT a key element in strategic planning as it isdescribed in the text?Question 3Spontaneous funds are generally defined as follows:Question 4Which of the following statements is CORRECT?Question 5Which of the following statements is CORRECT?Question 6Which of the following statements is CORRECT?Question 7The capital intensity ratio is generally defined as follows:Question 8A company expects sales to increase during the coming year, and it is using theAFN equation to forecast the additional capital that it must raise. Which of thefollowing conditions would cause the AFN to increase?
  • 2. Question 9Which of the following statements is CORRECT?Question 10Which of the following is NOT one of the steps taken in the financial planningprocess?Question 11Which of the following statements is CORRECT?Question 12Which of the following assumptions is embodied in the AFN equation?Question 13The term “additional funds needed (AFN)” is generally defined as follows:Question 14Which of the following statements is CORRECT?Question 15Last year Handorf-Zhu Inc. had $850 million of sales, and it had $425 million offixed assets that were used at only 60% of capacity. What is the maximum salesgrowth rate the company could achieve before it had to increase its fixed assets?Question 16Which of the following statements is NOT CORRECT?Question 17Based on the corporate valuation model, Hunsader’s value of operations is $300million. The balance sheet shows $20 million of short-term investments that areunrelated to operations, $50 million of accounts payable, $90 million of notespayable, $30 million of long-term debt, $40 million of preferred stock, and $100million of common equity. The company has 10 million shares of stockoutstanding. What is the best estimate of the stock’s price per share?Question 18Which of the following is NOT normally regarded as being a good reason toestablish an ESOP?
  • 3. Question 19Zhdanov Inc. forecasts that its free cash flow in the coming year, i.e., at , will be -$10 million, but its FCF at will be $20 million. After Year 2, FCF is expected togrow at a constant rate of 4% forever. If the weighted average cost of capital is14%, what is the firm’s value of operations, in millions?Question 20Leak Inc. forecasts the free cash flows (in millions) shown below. If the weightedaverage cost of capital is 11% and FCF is expected to grow at a rate of 5% afterYear 2, what is the Year 0 value of operations, in millions? Assume that theROIC is expected to remain constant in Year 2 and beyond (and do not make anyhalf-year adjustments). Year: 1 2 Free cash flow: -$50 $100Question 21Suppose Leonard, Nixon, & Shull Corporation’s projected free cash flow for nextyear is $100,000, and FCF is expected to grow at a constant rate of 6%. If thecompany’s weighted average cost of capital is 11%, what is the value of itsoperations?Question 22A company forecasts the free cash flows (in millions) shown below. The weightedaverage cost of capital is 13%, and the FCFs are expected to continue growing ata 5% rate after Year 3. Assuming that the ROIC is expected to remain constantin Year 3 and beyond, what is the Year 0 value of operations, in millions? Year: 1 2 3 Free cash flow: -$15 $10 $40Question 23Suppose Yon Sun Corporation’s free cash flow during the just-ended year () was$100 million, and FCF is expected to grow at a constant rate of 5% in the future.If the weighted average cost of capital is 15%, what is the firm’s value ofoperations, in millions?Question 24
  • 4. Based on the corporate valuation model, Bernile Inc.’s value of operations is $750million. Its balance sheet shows $50 million of short-term investments that areunrelated to operations, $100 million of accounts payable, $100 million of notespayable, $200 million of long-term debt, $40 million of common stock (par pluspaid-in-capital), and $160 million of retained earnings. What is the best estimatefor the firm’s value of equity, in millions?Question 25Simonyan Inc. forecasts a free cash flow of $40 million in Year 3, i.e., at , and itexpects FCF to grow at a constant rate of 5% thereafter. If the weighted averagecost of capital is 10% and the cost of equity is 15%, what is the horizon value, inmillions at ?Question 26Akyol Corporation is undergoing a restructuring, and its free cash flows areexpected to be unstable during the next few years. However, FCF is expected tobe $50 million in Year 5, i.e., FCF at equals $50 million, and the FCF growth rateis expected to be constant at 6% beyond that point. If the weighted average costof capital is 12%, what is the horizon value (in millions) at ?Question 27Which of the following does NOT always increase a company’s market value?Question 28Based on the corporate valuation model, the value of a company’s operations is$1,200 million. The company’s balance sheet shows $80 million in accountsreceivable, $60 million in inventory, and $100 million in short-term investmentsthat are unrelated to operations. The balance sheet also shows $90 million inaccounts payable, $120 million in notes payable, $300 million in long-term debt,$50 million in preferred stock, $180 million in retained earnings, and $800 millionin total common equity. If the company has 30 million shares of stockoutstanding, what is the best estimate of the stock’s price per share?Question 29Which of the following is NOT normally regarded as being a barrier to hostiletakeovers?Question 30Based on the corporate valuation model, the value of a company’s operations is$900 million. Its balance sheet shows $70 million in accounts receivable, $50million in inventory, $30 million in short-term investments that are unrelated tooperations, $20 million in accounts payable, $110 million in notes payable, $90
  • 5. million in long-term debt, $20 million in preferred stock, $140 million in retainedearnings, and $280 million in total common equity. If the company has 25 millionshares of stock outstanding, what is the best estimate of the stock’s price pershare?