FINC 3610 Exam 4 Dismukes Exam Newest
2025/2026 Complete Questions and Correct
Detailed Answers Already Graded A+
Cost of Capital - CORRECT ANSWER-Minimum return needed to satisfy
investors; if the company earns more, value is created
Sources of Capital - CORRECT ANSWER-Debt, preferred stock, common equity
Cost of Equity (Two Ways) - CORRECT ANSWER-Dividend Growth Model;
CAPM
, Dividend Growth Model Formula - CORRECT ANSWER-P₀ = D₁ / (r - g)
Dividend Growth Model Rearranged - CORRECT ANSWER-r = D₁/P₀ + g
Risk-Return Tradeoff - CORRECT ANSWER-The idea that higher risk means
higher potential return but also higher potential loss
Dollar Return (Stock) - CORRECT ANSWER-Dividends received + Capital
gain/loss (ending price - beginning price)
Percentage Return (Stock) - CORRECT ANSWER-Dollar return ÷ Initial
investment
Dollar Return (Bond) - CORRECT ANSWER-Interest received + Capital gain/loss
Percentage Return (Bond) - CORRECT ANSWER-Dollar return ÷ Initial bond
price
2025/2026 Complete Questions and Correct
Detailed Answers Already Graded A+
Cost of Capital - CORRECT ANSWER-Minimum return needed to satisfy
investors; if the company earns more, value is created
Sources of Capital - CORRECT ANSWER-Debt, preferred stock, common equity
Cost of Equity (Two Ways) - CORRECT ANSWER-Dividend Growth Model;
CAPM
, Dividend Growth Model Formula - CORRECT ANSWER-P₀ = D₁ / (r - g)
Dividend Growth Model Rearranged - CORRECT ANSWER-r = D₁/P₀ + g
Risk-Return Tradeoff - CORRECT ANSWER-The idea that higher risk means
higher potential return but also higher potential loss
Dollar Return (Stock) - CORRECT ANSWER-Dividends received + Capital
gain/loss (ending price - beginning price)
Percentage Return (Stock) - CORRECT ANSWER-Dollar return ÷ Initial
investment
Dollar Return (Bond) - CORRECT ANSWER-Interest received + Capital gain/loss
Percentage Return (Bond) - CORRECT ANSWER-Dollar return ÷ Initial bond
price
