You have discovered from looking at charts of past stock prices that if you sell just after a stock price has declined for two consecutive weeks, you make money every time in the following week! This is clearly a violation of the _____ of market efficiency.

A firm is expected to pay a dividend of $12 per share any day now. This dividend, along with the firm’s earnings, are expected to grow at a rate of 4% forever. If the current market price for a share is $67, what is the cost of equity?

Abaco Industries has bonds outstanding with a 6% coupon rate (APR) and a market price of $850. If the bonds mature in 5 years and interest is paid semi-annually, what is the YTM (as an APR) of those bonds?

You just won the lottery and want to put some money away for your child’s college education. College will cost $80,000 in 15 years. You can earn 4% compounded annually. How much do you need to invest today, assuming you make a one-time investment?

Financial ratios that measure the firm’s ability to pay its bills over the short run without undue stress are known as:

A firm’s _____ tax rate is defined as the tax amount divided by the taxable income.

Calculate the NPV of the following project using a discount rate of 5%:       Yr 0 = –$800; Yr 1 = –$80; Yr 2 = +$200; Yr 3 = +$300; Yr 4 = +$500; Yr 5 = +$500

In order to help you through college, your parents just deposited $25,000 into a bank account paying 5% interest. Starting tomorrow, you plan to withdraw equal amounts from the account at the beginning of each of the next four years. What is the MOST you can withdraw annually?

Given the following information, what is the firm’s weighted average cost of capital? Market value of equity = $60 million; market value of debt = $20 million; cost of equity = 15%; cost of debt = 5%; equity beta = 3.1; tax rate = 35%.

An investment earned the following returns for the last four years: –30%, +28%, +15%, and +7%. What is the variance of returns for this investment?