# Fight Finance

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A firm has forecast its Cash Flow From Assets (CFFA) for this year and management is worried that it is too low. Which one of the following actions will lead to a higher CFFA for this year (t=0 to 1)? Only consider cash flows this year. Do not consider cash flows after one year, or the change in the NPV of the firm. Consider each action in isolation.

For a price of $1040, Camille will sell you a share which just paid a dividend of$100, and is expected to pay dividends every year forever, growing at a rate of 5% pa.

So the next dividend will be $100(1+0.05)^1=105.00$, and the year after it will be $100(1+0.05)^2=110.25$ and so on.

The required return of the stock is 15% pa.

Would you like to the share or politely ?

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

The "interest expense" on a company's annual income statement is equal to the cash interest payments (but not principal payments) made to debt holders during the year. or ?

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year.

After one year, would you be able to buy , exactly the as or than today with the money in this account?

 Portfolio Details Stock Expected return Standard deviation Correlation Beta Dollars invested A 0.2 0.4 0.12 0.5 40 B 0.3 0.8 1.5 80

What is the beta of the above portfolio?

Stock A and B's returns have a correlation of 0.3. Which statement is NOT correct?