Fight Finance

(a) Income return of the stock.

(b) Capital return of the stock.

(c) Total return of the stock.

(d) Dividend yield of the stock.

(e) Price-earnings ratio of the stock.

(a) $688.32

(b) $704.64

(c) $710.95

(d) $760.95

(e) $817.25

(a) The expected dividend in 3 years will be: ##d_3 = d_1 (1+g)^2##.

(b) The expected price in 3 years will be: ##p_3 = p_0 (1+g)^3##.

(c) The expected effective 3 year total return measured over 3 years is equal to: ##r_{\text{total, 0}\rightarrow\text{3yr, eff 3yr}} = (1+r)^3-1##.

(d) The expected effective 3 year total return measured over 3 years will be: ##r_{\text{total, 0}\rightarrow\text{3yr, eff 3yr}} = \dfrac{p_3-p_0+d_3}{p_0}##.

(e) The expected effective annual dividend yield will be: ##r_{\text{dividend, 0}\rightarrow\text{3yr, eff annual}} = \dfrac{d_1}{p_0}##.

(a) Cash available to distribute to creditors and stockholders.

(b) Cash flow to creditors minus cash flow to stockholders.

(c) Net income (or earnings) plus depreciation plus interest expense.

(d) Net income minus the increase in net working capital.

(e) Net income minus net capital spending minus the increase in net working capital.

(a) 2.48%

(b) 4.85%

(c) 77.00%

(d) 129.93%

(e) 247.53%

(a) Low debt to assets ratios.

(b) Low quick ratios.

(c) High interest coverage ratios.

(d) Positive amounts of net working capital.

(e) High net profit margins.

(a) ##C_\text{real, t}=C_\text{nominal,t}.(1+r_\text{inflation})^t##

(b) ##C_\text{real,t}=\dfrac{C_\text{nominal,t}}{(1+r_\text{inflation})^t} ##

(c) ##C_\text{real,t}=\dfrac{C_\text{nominal,t}}{r_\text{inflation}} ##

(d) ##C_\text{real,t}=C_\text{nominal,t}.r_\text{inflation} ##

(e) ##C_\text{real,t}=C_\text{nominal,t}.r_\text{inflation}.t##

(a) Because bonds are higher risk investments than shares.

(b) Because issuers must pay bond holders or face bankruptcy, while payments to shareholders are discretionary.

(c) Because bond holders are paid last in the event of bankruptcy, while shareholders are paid first.

(d) Because bonds always pay higher returns than shares.

(e) Because bonds are generally more liquid than shares.

(a) 1.336851119

(b) 1.782468159

(c) 1.836881513

(d) 1.969931972

(e) 2.030068028

(a) Is the weighted average time that an asset’s cash flows are received, usually measured in years.

(b) Divided by (1+y) equals the modified duration, where y is the yield to maturity given as an effective annual rate and duration is measured in years.

(c) Of a zero-coupon bond is equal to the bond’s maturity.

(d) Of a fixed-coupon-paying bond will be less than the bond’s maturity.

(e) Of a portfolio is an arithmetic average of the Macaulay durations of the assets in the portfolio, weighted by their face values.