1. The ratio which many observers use to quantify the stock market's opinion of a firm is the:
a ROE
b EPS
c. D/E
d. P/E
e. None of the above
2. Present Value Calculations:
a. can help the creation of value
b. can provide managers with a means of identifying the best investment choices
c. do not help in the creation of value
d. a and b
e. b and c
3. Flexibility issues are those which:
a. deal with a company’s financing reserves
b. impact the debt capacity that a firm should maintain
c. all of the above
4. A discount factor:
a. is the same as compounding future cash flows
b. performs the reverse function of a compounding interest rate
c. allows investors to quantify a figure which will assist them in comparing alternative investments
d. b and c
e. a,b and c
5. Which of the following methods results in a net present value of zero?
a. IRR
b. Payback
c. Discount payback
d. None of the above