Fight Finance

(a) The beta of the firm's assets will increase.

(b) The beta of the firm's assets will decrease.

(c) The beta of the firm's equity will increase.

(d) The beta of the firm's equity will decrease.

(e) The beta of the firm's equity will be unchanged.

(a) $127.50

(b) $171.14

(c) $173.33

(d) $174.56

(e) $354.06

(a) The project should be accepted.

(b) The project's IRR is less than its required return.

(c) The project's IRR is more than its required return.

(d) The project's IRR is equal to its required return.

(e) The project is under-priced.

(a) 0.4286 yrs

(b) 1.4286 yrs

(c) 1.5714 yrs

(d) 2.5714 yrs

(e) 2.7500 yrs

Interest expense on debt is tax-deductible, but dividend payments on equity are not. or ?

(a) A firm's quick ratio will always be equal to or less than its current ratio.

(b) A firm will have positive net working capital if it has a current ratio that's greater than one.

(c) A firm's gross margin will be greater than or equal to its operating margin, which will be greater than or equal to its net profit margin.

(d) A firm's fixed asset turnover will be less than or equal to asset turnover.

(e) A firm's debt to equity ratio will always be greater than or equal to its debt to assets ratio.

(a) Borrow $636.3636 and use it to buy 0.9091 ounces of gold right now (t=0). Then pay back the loan with $700 at the end (t=1).

(b) Borrow $700 and use it to buy 1 ounce of gold right now (t=0). Then pay back the loan with $770 at the end (t=1).

(c) Borrow $727.2727 and use it to buy 1 ounce of gold right now (t=0). Then pay back the loan with $800 at the end (t=1).

(d) Borrow $800 and use it to buy 1.1039 ounces of gold right now (t=0). Then pay back the loan with $880 at the end (t=1).

(e) Borrow $880 and use it to buy 1 ounce of gold right now (t=0). Then pay back the loan with $800 at the end (t=1).

(a) Revenue, sales, turn over.

(b) Paid up capital, contributed equity.

(c) Shares, stock, equity.

(d) Net income, earnings, net profit after tax, the bottom line.

(e) Market capitalisation of equity, book value of equity.

(a) Buy high, then sell low.

(b) Buy low, then sell high.

(c) Sell high, then buy low.

(d) Sell low, then buy high.

(e) Sell high, then buy high.

(a) Negative gearing provides benefits by increasing the investor’s personal pre-tax income in the current year.

(b) Negative gearing works best when the investor has a high personal income so they're in a high personal marginal income tax bracket.

(c) Negative gearing works best when the asset makes large capital gains but has low income (such as rent).

(d) The more leverage, the bigger the interest tax shield benefit of negative gearing.

(e) Real estate and shares can be negatively geared.