CORPORATE ISSUERS COMPREHENSIVE EXAM SCRIPT COMPLETE QUESTIONS VERIFIED

CORPORATE ISSUERS COMPREHENSIVE EXAM SCRIPT COMPLETE QUESTIONS VERIFIED
SOLUTIONS




Question:
Cost of Preferred Stock.

Answer:
Rp = Dp/P0



Question:
Financial Leverage Ratio.

Answer:
Financial Leverage = Average Total Assets/Average Equity



Question:
Dept-to-equity ratio.

Answer:
D/E = Total dept/total equity



Question:
Dividend payout ratio.

Answer:
Payout ratio = Dividends/net income



Question:
Retention Ratio.

, Answer:
b = 1 - payout ratio



Question:
Sustainable Growth Rate.

Answer:
g = ROE x b



Question:
Cash Conversion Cycle.

Answer:
CCC = DIO + DSO - DPO



Question:
free cash flow to firm (FCFF).

Answer:
FCFF = NI + NCC + Int(1 - T) - FCInv - WCInv



Question:
Free cash flow to equity (FCFE).

Answer:
FCFE = NI + NCC - FCInv WCInv + net borrowing



Question:
Net borrowing.

Answer: