1. "The time value for a call option is zero if the option is out-of-the-money." True or false?
The annual report includes which of the following statements?
a. A balance sheet for the latest year and possibly for several prior years.
b. An income statement for the latest year and possibly for several prior years.
c. A statement of cash flows for the latest year.
d. A statement of stockholders' equity for the latest year.
e. All of these are correct.
2. Economic value added (EVA) is equal to EBIT(1 – T), or NOPAT, minus the dollar cost of all the firm's total invested capital. The primary difference between EVA and accounting net income is that only the cost of debt (interest charges) is deducted when calculating accounting net income whereas the cost of common equity is also deducted when finding EVA. True or false?