Adam Prokop EXAM TIPS FIN 300 Managerial Finance I
Midterm Question Pool with answers 2025 exam prep Toronto
Metropolitan University
Midterm Question Pool_F
Ch1_Theory
Question 1
The purchase and sale of securities after the original issuance occurs in the:
, Dealer market.
Secondary market.
Auction market.
Primary market.
Liquidation market.
Question 2
Capital budgeting is defined as the:
determination of the total amount of money which a firm should borrow.
management of a firm's long-term investments.
process of determining the optimal types and amounts of inventory to keep on hand.
, mix of debt and equity used by a firm to finance its operations.
management of a firm's net working capital.
Question 3
There are many advantages and disadvantages to a sole proprietorship. Which of the following is an
advantage of a sole proprietorship?
Ease of set-up
Separation of ownership and control
Limited liability
Unlimited Liability
Double taxation
Ch1_Tax
Question 4
You are an investor in Morgan Sachs. Morgan Sachs earns $3.00 per share after tax and distributes
all of its earnings to its shareholders in the form of a dividend. The corporate tax rate is 30%, the
personal tax rate on dividend income is 20%, and the personal tax rate on ordinary income is 35%.
How much money per share will you receive after all taxes are paid (assume you are holding the
investment in a non-registered account)?
$2.40
$2.10
$2.96
$1.05
$1.68
Question 5
, You hold 500 shares of ETH in a non-registered investment account. ETH's year-end earnings are $7
per share and its dividend payout ratio is 40%. The personal tax rate on dividends 25%. What is the
total after-tax amount of money you keep as an investor?
$1,400.00
$2.50
$910.00
$2.80
$1,050.00
Question 6
You own 100 shares in a company that earns $4.00 per share before taxes, has a corporate tax rate
of 30%, and pays out 60% of its after-tax earnings as dividends. The tax rate on dividend income is
15%. What is the total after-tax income you receive from your dividends?
$95.20
$61.20
$40.80
$142.80
$25.20
Ch2_Theory
Question 7
A(n) asset is one which can be quickly converted into cash without significant loss in
value.
liquid
long-term
Midterm Question Pool with answers 2025 exam prep Toronto
Metropolitan University
Midterm Question Pool_F
Ch1_Theory
Question 1
The purchase and sale of securities after the original issuance occurs in the:
, Dealer market.
Secondary market.
Auction market.
Primary market.
Liquidation market.
Question 2
Capital budgeting is defined as the:
determination of the total amount of money which a firm should borrow.
management of a firm's long-term investments.
process of determining the optimal types and amounts of inventory to keep on hand.
, mix of debt and equity used by a firm to finance its operations.
management of a firm's net working capital.
Question 3
There are many advantages and disadvantages to a sole proprietorship. Which of the following is an
advantage of a sole proprietorship?
Ease of set-up
Separation of ownership and control
Limited liability
Unlimited Liability
Double taxation
Ch1_Tax
Question 4
You are an investor in Morgan Sachs. Morgan Sachs earns $3.00 per share after tax and distributes
all of its earnings to its shareholders in the form of a dividend. The corporate tax rate is 30%, the
personal tax rate on dividend income is 20%, and the personal tax rate on ordinary income is 35%.
How much money per share will you receive after all taxes are paid (assume you are holding the
investment in a non-registered account)?
$2.40
$2.10
$2.96
$1.05
$1.68
Question 5
, You hold 500 shares of ETH in a non-registered investment account. ETH's year-end earnings are $7
per share and its dividend payout ratio is 40%. The personal tax rate on dividends 25%. What is the
total after-tax amount of money you keep as an investor?
$1,400.00
$2.50
$910.00
$2.80
$1,050.00
Question 6
You own 100 shares in a company that earns $4.00 per share before taxes, has a corporate tax rate
of 30%, and pays out 60% of its after-tax earnings as dividends. The tax rate on dividend income is
15%. What is the total after-tax income you receive from your dividends?
$95.20
$61.20
$40.80
$142.80
$25.20
Ch2_Theory
Question 7
A(n) asset is one which can be quickly converted into cash without significant loss in
value.
liquid
long-term
