MHA 706 FINAL-LORD | COMPLETE QUESTIONS WITH 100% RATED CORRECT ANSWERS |
GRADED A+ | 2025/2026 LATEST UPDATE
The yield to maturity on a bond is the discount rate that will set the present value of the
payments equal to the bond price
Factors that determine price of a bond At maturity, a bond's value must equal its par value
(plus final interest payment)
The value of a premium bond will decrease to par value at maturity
The value of a discount bond will increase to par value at maturity
A par bond value will remain at par if interest rates remain constant
The return in each year consists of an interest payment (yield) and a price change (capital gains
yield)
Constant growth dividend model a widely cited dividend valuation approach that assumes
dividends will grow at a constant rate, but a rate less than the required return
Assumptions of constant growth dividend model E(g1) = E(g2) = E(gN) = E(g)
R(Re) E(g)
The last dividend was paid recently
Dividends are paid annually.
, Efficient Market Theory A theory based on the premise that the stock market processes
information efficiently. The theory postulates that, as new information becomes known, it is
reflected immediately in the price of stock and, therefore, stock prices represent fair prices.
Underlying assumptions of Efficient Market Theory Prices reflect all publicly available
information; Investors should not expect to "beat the market".
In the short run, expect to earn average returns for the risk assumed
In the long run, expect to earn returns that are commensurate with the risk assumed
Zero-Based Budget allocates resources as if each budget was brand new
Static Budget a projection of budget data at one level of activity
flexible budget a projection of budget data for various levels of activity
Actual Budget uses actual quantity multiplied by actual costs
What are budgets used for? planning and control
total budget variance the difference between the actual cost of an input and its planned
cost.
GRADED A+ | 2025/2026 LATEST UPDATE
The yield to maturity on a bond is the discount rate that will set the present value of the
payments equal to the bond price
Factors that determine price of a bond At maturity, a bond's value must equal its par value
(plus final interest payment)
The value of a premium bond will decrease to par value at maturity
The value of a discount bond will increase to par value at maturity
A par bond value will remain at par if interest rates remain constant
The return in each year consists of an interest payment (yield) and a price change (capital gains
yield)
Constant growth dividend model a widely cited dividend valuation approach that assumes
dividends will grow at a constant rate, but a rate less than the required return
Assumptions of constant growth dividend model E(g1) = E(g2) = E(gN) = E(g)
R(Re) E(g)
The last dividend was paid recently
Dividends are paid annually.
, Efficient Market Theory A theory based on the premise that the stock market processes
information efficiently. The theory postulates that, as new information becomes known, it is
reflected immediately in the price of stock and, therefore, stock prices represent fair prices.
Underlying assumptions of Efficient Market Theory Prices reflect all publicly available
information; Investors should not expect to "beat the market".
In the short run, expect to earn average returns for the risk assumed
In the long run, expect to earn returns that are commensurate with the risk assumed
Zero-Based Budget allocates resources as if each budget was brand new
Static Budget a projection of budget data at one level of activity
flexible budget a projection of budget data for various levels of activity
Actual Budget uses actual quantity multiplied by actual costs
What are budgets used for? planning and control
total budget variance the difference between the actual cost of an input and its planned
cost.
