Assume capital projects A and B both have a 5-year life. If the NPV profile for Project A is much steeper than the NPV profile for Project B, then Project A's future cash inflows tend to come in mostly towards the end of the project, while Project B's cash inflows tend to come in mostly towards the beginning of the project.
False
True
If a capital investment project has an NPV > $0, then its IRR is ______ the firm's required rate of return (cost of capital).
less than
No answer text provided.
equal to
greater than
If XYZ Corporation has NI=$1,000, and has 500 shares of stock outstanding, what is the estimated value of a share of XYZ stock if it has a PE ratio of 6x?
$16
$14
$12
none of the provided answers is correct
Based on the discounted dividend model, (Gordon model), if ABC stock is selling for $50/share, and just paid a $4/share dividend, what is the expected growth rate of dividends, assuming investors required rate of return in 16%?
6%
8%
4%
10%
A bond's market value will be less than its par value if:
the bond's coupon rate is greater than 0%
the bond's yield to maturity is greater than its coupon rate
the bond is convertible to common stock
the bond's coupon rate is less than its market value