Given the following information, leverage will add how much value to the unlevered firm per dollar of debt? Corporate tax rate: 34% Personal tax rate on income from bonds: 20% Personal tax rate on income from stocks: 50% $-0.050 $-0.188 $0.367 $0.588 None of these A firm has a debt-to-equity ratio of 1. Its cost of equity is 16%, and its cost of debt is 8%. If the corporate tax rate is 25%, what would the cost of equity be if the debt-to-equity ratio were 0? 11.11% 12.57% 13.33% 16.00% None of these Given the following information, leverage will add how much value to the unlevered firm per dollar of debt? Corporate tax rate: 34% Personal tax rate on income from bonds: 20% Personal tax rate on income from stocks: 0% $0.175 $0.472 $0.528 $0.825 None of the above Suppose the Barges Corporation's common stock has an expected return of 12%. Assume that the risk-free rate is 5%, and the market risk premium is 6%. If no unsystematic influence affected Barges' return, the beta for Barges is ______. 1.00 1.17 1.20 2.50 It is impossible to calculate with the information given. All else equal, a more liquid stock will have a lower ________. beta market premium cost of capital Both beta and market premium. Both beta and cost of capital. Holden Bicycles has 2,000 shares outstanding each with a par value of $0.50. If they are sold to shareholders at $12 each, what would the capital surplus be? $1,000 $12,000 $15,000 $23,000 $24,000 The interest tax shield has no value for a firm when: I. the tax rate is equal to zero. II. the debt-equity ratio is exactly equal to 1. III. the firm is unlevered. IV. a firm elects 100% equity as its capital structure. I and III only II and IV only I, III, and IV only II, III, and IV only I, II, and IV only The returns on your portfolio over the last 5 years were -5%, 20%, 0%, 10% and 5%. What is the standard deviation of your return? 5.21% 10.12% 9.62% 12.70% 2.74% A stock has returns of 3%, 18%, -24%, and 16% for the past four years. Based on this information, what is the 95% probability range for any one given year? -8.4 to 11.7% -16.1 to 22.6% -24.5 to 34.3% -35.4 to 41.9% -54.8 to 61.3% Estimates using the arithmetic average will probably tend to _____ values over the long-term while estimates using the geometric average will probably tend to _____ values over the short-term. underestimate; overestimate overestimate; overestimate underestimate; underestimate overestimate; underestimate accurately; accurately Rockwell Corporation had net income of $150,000 for the year ending 2008. The company decided to payout 40% of earnings per share as a dividend. Rockwell has 120,000 shares issued and outstanding. What are the retained earnings for 2008? $40,000 $60,000 $90,000 $150,000 None of the above

Given the following information, leverage will add how much value to the unlevered firm per dollar of debt? Corporate tax rate: 34% Personal tax rate on income from bonds: 20% Personal tax rate on income from stocks: 50% $-0.050 $-0.188 $0.367 $0.588 None of these A firm has a debt-to-equity ratio of 1. Its cost of equity is 16%, and its cost of debt is 8%. If the corporate tax rate is 25%, what would the cost of equity be if the debt-to-equity ratio were 0? 11.11% 12.57% 13.33% 16.00% None of these Given the following information, leverage will add how much value to the unlevered firm per dollar of debt? Corporate tax rate: 34% Personal tax rate on income from bonds: 20% Personal tax rate on income from stocks: 0% $0.175 $0.472 $0.528 $0.825 None of the above Suppose the Barges Corporation's common stock has an expected return of 12%. Assume that the risk-free rate is 5%, and the market risk premium is 6%. If no unsystematic influence affected Barges' return, the beta for Barges is ______. 1.00 1.17 1.20 2.50 It is impossible to calculate with the information given. All else equal, a more liquid stock will have a lower ________. beta market premium cost of capital Both beta and market premium. Both beta and cost of capital. Holden Bicycles has 2,000 shares outstanding each with a par value of $0.50. If they are sold to shareholders at $12 each, what would the capital surplus be? $1,000 $12,000 $15,000 $23,000 $24,000 The interest tax shield has no value for a firm when: I. the tax rate is equal to zero. II. the debt-equity ratio is exactly equal to 1. III. the firm is unlevered. IV. a firm elects 100% equity as its capital structure. I and III only II and IV only I, III, and IV only II, III, and IV only I, II, and IV only The returns on your portfolio over the last 5 years were -5%, 20%, 0%, 10% and 5%. What is the standard deviation of your return? 5.21% 10.12% 9.62% 12.70% 2.74% A stock has returns of 3%, 18%, -24%, and 16% for the past four years. Based on this information, what is the 95% probability range for any one given year? -8.4 to 11.7% -16.1 to 22.6% -24.5 to 34.3% -35.4 to 41.9% -54.8 to 61.3% Estimates using the arithmetic average will probably tend to _____ values over the long-term while estimates using the geometric average will probably tend to _____ values over the short-term. underestimate; overestimate overestimate; overestimate underestimate; underestimate overestimate; underestimate accurately; accurately Rockwell Corporation had net income of $150,000 for the year ending 2008. The company decided to payout 40% of earnings per share as a dividend. Rockwell has 120,000 shares issued and outstanding. What are the retained earnings for 2008? $40,000 $60,000 $90,000 $150,000 None of the above