Exam 1 Guide - Corporate Finance Questions
and Answers Graded A+
Which one of the following transactions occurred in the primary market? Valerie
purchased newly issued shares of Velcro, Inc.
Wealth maximization as the goal of the firm implies enhancing the wealth of the firm's
stockholders.
An agency problem is prone to exist in public corporations because management is
frequently separated from ownership.
The capital structure of a firm refers to the firm's long-term debt and equity.
The process of managing a firm's long-term investments is called capital budgeting.
The majority of the dollar value of the US household net wealth is derived from nonfinancial
assets (around 72%). False
, JBS Inc. has EBIT=$1,050, net income=$325, change in retained earnings=125, and next fixed
assets=$35,000. What is the dividend payout ratio for JBS? 61.53%
The Securities and Exchange Commission was created in 1934
Donner United has total owners' equity of $18,800. The firm has current assets of $23,100,
current liabilities of $12,200, and total assets of $36,400. What is the value of the long-term
debt? $5,400
GAAP is a common set of standards and procedures for preparing audited financial
statements.
JBS Inc. has sales=$1,000, gross profit=$300, marketing & advertising expenses=$50,
EBIT=185, net income=$25, and depreciation and amortization=$35. What is the EBITDA for
JBS? $220
Gino's Winery has net working capital of $29,800, net fixed assets of $64,800, current liabilities
of $34,700, and long-term debt of $23,000. What is the value of the owners' equity?
$71,600
and Answers Graded A+
Which one of the following transactions occurred in the primary market? Valerie
purchased newly issued shares of Velcro, Inc.
Wealth maximization as the goal of the firm implies enhancing the wealth of the firm's
stockholders.
An agency problem is prone to exist in public corporations because management is
frequently separated from ownership.
The capital structure of a firm refers to the firm's long-term debt and equity.
The process of managing a firm's long-term investments is called capital budgeting.
The majority of the dollar value of the US household net wealth is derived from nonfinancial
assets (around 72%). False
, JBS Inc. has EBIT=$1,050, net income=$325, change in retained earnings=125, and next fixed
assets=$35,000. What is the dividend payout ratio for JBS? 61.53%
The Securities and Exchange Commission was created in 1934
Donner United has total owners' equity of $18,800. The firm has current assets of $23,100,
current liabilities of $12,200, and total assets of $36,400. What is the value of the long-term
debt? $5,400
GAAP is a common set of standards and procedures for preparing audited financial
statements.
JBS Inc. has sales=$1,000, gross profit=$300, marketing & advertising expenses=$50,
EBIT=185, net income=$25, and depreciation and amortization=$35. What is the EBITDA for
JBS? $220
Gino's Winery has net working capital of $29,800, net fixed assets of $64,800, current liabilities
of $34,700, and long-term debt of $23,000. What is the value of the owners' equity?
$71,600
