I need the following multiple choice questions answered: ,,Aubrey aircraft recently amounts that its net income increased sharply from the previous year, yet it’s net cash flow from operations declined. Which of the following could explain this performance?,,A. The company’s operating income declined.,B. The company’s expenditures on fixed assets declined.,C. The company’s cost of goods sold increased.,D. The company’s depreciation and amortization expenses declined.,E. The company’s interest expense increased.,,Niendorf corporations five-year bonds yield 6.75%, and five-year T-bonds yield 4.80%. The real risk-free rate is r*= 2.75%, inflation premium for five-year bonds years IP= 1.65%, the risk default risk premium for Niendorf’s bondsis DRP= 1.20% versus zero for T-bonds, and the maturity risk premium for all bonds is found with the formula MRP = (t-1)x 0.1%, where t= number of years to maturity. What is the liquidity premium (LP) on niendorf’s bonds? ,A. 0.49%,B. 0.55%,C.0.61%,D. 0.68%,E. 0.75%,,Which of the following statements is correct?,A. If a bond is selling at a discount, the yeild to call is a better measure of the return than the yield to maturity.,B. On an expected yield basis, the expectedcapital gains yeild will always be positive because an investor would not purchase a bond with an expected capital loss.,C. on an expected yeild basis, the expected current yield will always be positive because an investor would noyt purchase a bond that is not expected to pay any cash coupon interest. ,D. If a coupon bond is selling at par, it’s current yeild equals its yield to maturity.,E. The current yeild on Bond A exceeds the current yeild on Bond B: therefore, Bond A must have a higher yeild to maturity than Bond B.,,Assume that investors have recently become more risk averse, so market risk premium has increased. Also, assume that the risk-free rate and the expected inflation have not changed. Which of the following is most likely to occur?,,A. The required rate of return for an average stock will increase by an amount equal to increase in the market risk premium. ,B. The required rate of return will decline for stocks whose betas are less than 1.0.,C. The required rate of return on the market, rM would not change as a result of these changes.,D. The required rate of return for each individual stock in the market will increase by an amount equal to the increase in the market risk premium.,E. The required rate of return on a riskless bond will decline.
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