FI 360 FINAL EXAM, COMPLETE WITH QUESTIONS AND ANSWERS

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FI 360 FINAL EXAM, COMPLETE WITH QUESTIONS AND ANSWERS.Question 1 6.5 / 6.5 pts The feature in a bond indenture that requires systematic retirement of the bond issue is a planned call provision. s... inking fund provision. forced conversion provision. mandated redemption provision. Question 2 6.5 / 6.5 pts Operating leverage describes the relationship between... EBIT and sales taxes and sales debt and equity fixed costs and variable costs Question 3 6.5 / 6.5 pts The risk-free rate is 5% and the expected return on the market portfolio is 13%. A stock has a beta of 1.5, what is its expected return? 17% 12% 19.5% 24.5% Incorrect Question 4 0 / 6.5 pts Bavarian Brew, an unlevered firm, has an expected EBIT of $500,000. The required return on assets for the firm’s assets is 10%. The company has 250,000 shares outstanding. The company is considering raising $1 million in debt with a required return of 6% and would use the proceeds to repurchase outstanding stock. What is the value of Bavarian Brew before restructuring? Assume no corporate taxes. $500,000 $5,000,000 $1,000,000 $3,300,000 [Show More]

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