According to the CAPM, what is the expected return on asset A if it has a beta of 1.2, the expected market risk premium is 15%, and the T-bill rate is 1%?

According to the CAPM, what is the expected return on asset A if it has a beta of 2.5, the expected market return is 7%, and the T-bill rate is 1%?

Suppose that your firm has a cost of equity of 12% and a cost of debt of 6%. If the target debt/equity ratio is 0.60, and the tax rate is 30%, what is the firm’s weighted average cost of capital (WACC)?

A project requires an initial investment of $26 million. The target D/E ratio is 1.5. Flotation costs for equity are 10% and flotation costs for debt are 3%. What is the true cost (in dollars) of the project when you consider flotation costs?

A firm should try to be as liquid as possible.

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?

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.

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?

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

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?