FIN 300 Final Exam || Errorless Answers 100%.
Which of the following factors does not affect a firm's business risk?
A. Demand variability.
B. Input price variability.
C. Interest cost variability.
D. Operating leverage.
E. Sales price variability correct answers c. Interest cost variability
A firm that has high interest payments relative to other companies is said to have
A. a poor finance department.
B. a high degree of financial leverage
C. no financial leveraging.
D. a high degree of operating leverage. correct answers B. a high degree of financial leverage
The combination of debt and equity that maximizes a firm's value is known as the
A. degree of financial leverage (DFL).
B. maximum WACC.
C. maximum business risk.
D. optimal capital structure. correct answers D. optimal capital structure.
A firm should raise capital according to its optimal capital structure so as to maximize its
A. earnings per share (EPS).
, B. stock price.
C. weighted average cost of capital (WACC).
D. net income correct answers B. stock price.
Quick Launch Rocket Company, a satellite launching firm, expects
its sales to increase by 40 percent in the coming year as a result of NASA's recent problems with
the space shuttle. The firm's current EPS is $3.00. Its degree of operating leverage is 1.6, while
its degree of financial leverage is 2.1. What is the firm's projected EPS for the coming year using
the DTL approach?
A. $3.25
B. $5.46
C. $10.92
D. $7.03
E. $19.63 correct answers E. $19.63
Net working capital is
A. current liabilities.
B. current assets.
C. current liabilities plus current assets.
D. current assets minus current liabilities.
E. current liabilities minus current assets. correct answers D. current assets minus current
liabilities.
2014 Costco's Net working capital is:
(in millions)
A. 14,412
Which of the following factors does not affect a firm's business risk?
A. Demand variability.
B. Input price variability.
C. Interest cost variability.
D. Operating leverage.
E. Sales price variability correct answers c. Interest cost variability
A firm that has high interest payments relative to other companies is said to have
A. a poor finance department.
B. a high degree of financial leverage
C. no financial leveraging.
D. a high degree of operating leverage. correct answers B. a high degree of financial leverage
The combination of debt and equity that maximizes a firm's value is known as the
A. degree of financial leverage (DFL).
B. maximum WACC.
C. maximum business risk.
D. optimal capital structure. correct answers D. optimal capital structure.
A firm should raise capital according to its optimal capital structure so as to maximize its
A. earnings per share (EPS).
, B. stock price.
C. weighted average cost of capital (WACC).
D. net income correct answers B. stock price.
Quick Launch Rocket Company, a satellite launching firm, expects
its sales to increase by 40 percent in the coming year as a result of NASA's recent problems with
the space shuttle. The firm's current EPS is $3.00. Its degree of operating leverage is 1.6, while
its degree of financial leverage is 2.1. What is the firm's projected EPS for the coming year using
the DTL approach?
A. $3.25
B. $5.46
C. $10.92
D. $7.03
E. $19.63 correct answers E. $19.63
Net working capital is
A. current liabilities.
B. current assets.
C. current liabilities plus current assets.
D. current assets minus current liabilities.
E. current liabilities minus current assets. correct answers D. current assets minus current
liabilities.
2014 Costco's Net working capital is:
(in millions)
A. 14,412
