12/8/2020 Sophia :: Welcome
Score 17/19
You passed this Milestone
17 questions were answered correctly.
UNIT 3 — MILESTONE 3
2 questions were answered incorrectly.
1
Calculate a company's total leverage given the following information:
Net income = $80,000
Revenue = $120,000
Variable costs = $25,000
Cannot calculate without knowing degree of financial leverage
1.14
Cannot calculate without EPS data
1.19
CONCEPT
Thinking About Financial Leverage
2
Like the capital asset pricing model, the bond yield plus risk premium (BYPRP) approach is useful for
__________.
https://snhu.sophia.org/spcc/principles-of-finance/milestone_take_feedbacks/7084525 1/10
, 12/8/2020 Sophia :: Welcome
calculating the relative time value of money of projected cash flows
determining whether it makes financial sense to pursue a new project
estimating the equity risk premium
estimating the required return on a company's equity
CONCEPT
Approaches to Calculating the Cost of Capital
3
Which of the following is true of systematic risk?
It cannot be diversified away by holding a pool of individual assets.
It is less tightly linked to the market as a whole than unsystematic risk.
An investor can avoid this type of risk through calculated investment choices.
It does not require additional compensation in terms of expected return.
CONCEPT
Diversification
4
The risk that your investment in a stock will lose value because the company's labor force goes on strike is
known as __________.
default risk
asset-backed risk
https://snhu.sophia.org/spcc/principles-of-finance/milestone_take_feedbacks/7084525 2/10
Score 17/19
You passed this Milestone
17 questions were answered correctly.
UNIT 3 — MILESTONE 3
2 questions were answered incorrectly.
1
Calculate a company's total leverage given the following information:
Net income = $80,000
Revenue = $120,000
Variable costs = $25,000
Cannot calculate without knowing degree of financial leverage
1.14
Cannot calculate without EPS data
1.19
CONCEPT
Thinking About Financial Leverage
2
Like the capital asset pricing model, the bond yield plus risk premium (BYPRP) approach is useful for
__________.
https://snhu.sophia.org/spcc/principles-of-finance/milestone_take_feedbacks/7084525 1/10
, 12/8/2020 Sophia :: Welcome
calculating the relative time value of money of projected cash flows
determining whether it makes financial sense to pursue a new project
estimating the equity risk premium
estimating the required return on a company's equity
CONCEPT
Approaches to Calculating the Cost of Capital
3
Which of the following is true of systematic risk?
It cannot be diversified away by holding a pool of individual assets.
It is less tightly linked to the market as a whole than unsystematic risk.
An investor can avoid this type of risk through calculated investment choices.
It does not require additional compensation in terms of expected return.
CONCEPT
Diversification
4
The risk that your investment in a stock will lose value because the company's labor force goes on strike is
known as __________.
default risk
asset-backed risk
https://snhu.sophia.org/spcc/principles-of-finance/milestone_take_feedbacks/7084525 2/10
