Question

12. From a finance perspective, what should the primary goal of the Chief Financial Officer (CFO) of the corporation be?

A)        Maximize the pay and compensation of employees and managers of the firm.

B)        Maximize the value of the stockholders wealth because they are the owners of the corporation.

C)        Maximize the societal value to minimize governmental interference.

D)       Make Professor Gillette happy.

14.        Which of the following amounts is closest to what should be paid for Overland common stock?  Overland has just paida dividend of $2.25. These dividends are expected to grow at a rate of 5% in the foreseeable future.  The risk of this company suggests that future cash flows should be discounted at a rate of 11%.

            A)  $20.45

            B)  $21.48

            C)  $37.50

            D)  $39.38

            E)   $47.70

15.When calculating the net present value (NPV) of a project costing $8000, and that returns $2000 in year one, $5,000 in year 2, and $2,800 in year 3, which interest factor below would be more useful in your calculations?

            A) Future Value Annuity factor

            B) Present Value Annuity factor

            C) Future Value Lump sum factor

            D) Present Value Lump sum factor

16.      A pure discount bond (e.g. a Zero-Coupon Bond)

            A)  does not have any face value.

            B)  pays interest annually.

            C)  pays interest semiannually.

            D)  has no coupon payment.

Answer 1