The four stocks A, B, C, and D have standard deviations, respectively, of 5%, 10%, 15% and 20%. Which one is the riskiest?
- Stock A
- Stock B
- Stock C
- Stock D
According to the Pecking Order Hypothesis: less probable companies in an asymmetric world will need more ________; they will first seek ________ and will avoid ________.
- internal funding; the use of retained earnings; equity market
- internal funding; the use of retained earnings; debt market
- external funding; equity funding; debt market
- external funding; debt financing; equity market
Consider the following sales:
- May: €50,000
- June: €80,000
- July: €120,000
For any month the following percentages are received over time in cash: 40% in cash from that same month of sales, 50% in cash from the previous month's sales and 10% in cash from the sales from two months ago. What amount of cash will be received during July?
Which model shows how soon one will recover from an initial investment?
- Payback period
- Profitability index
Consider the following information from a balance sheet: the value of common stock is €60,000, preferred stock has a value of €10,000, retained earnings are €40,000, long-term debt is €120,000. For the purpose of estimating the WACC of the firm,what are the weights of long-term debt, preferred stock and equity? (Note: D = debt, PS= preferred stock, E = equity and V = total value).
- D/V = 52.17%, PS/V = 4.35% and E/V = 43.48%
- D/V = 52.17%, PS/V = 43.48% and E/V = 4.35%
- D/V = €120,000, PS/V = €10,000 and E/V = €100,000
- There is not enough information to answer this question.
Which of the following types of securities cannot be issued by a large public firm?
- common stock
- preferred stock
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Six international business exams (last years) for the course Finance and risk management at University of Groningen
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