FIN 370 Week 1 Apply: Week 1 Exercise

Review the Week 1 “Knowledge Check” in Connect® in preparation for this assignment.

Complete the Week 1 “Exercise” in Connect®.

Note: You have only one attempt available to complete this assignment. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date.

Materials

• Learn: McGraw-Hill Connect® Access

Maximizing owners’ equity value means carefully considering all of the following EXCEPT

Multiple Choice

how best to return the profits from those projects to the owners over time.

which projects to invest in.

how to best bring additional funds into the firm.

how best to increase the firm’s risk.

Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors?

Multiple Choice

taxes

dividends

retained earnings

As individual legal entities, corporations assume liability for their own debts, so the shareholders hold

Multiple Choice

unlimited liability.

shared liability.

joint liability.

only limited liability.

For corporations, maximizing the value of owner’s equity can also be stated as

Multiple Choice

maximizing the stock price.

maximizing earnings per share.

maximizing retained earnings.

maximizing net income.

Which of the following is not an impact of the slowdown occurring in China’s economy?

Multiple Choice

falling community prices

lower demand in materials such as steel, iron ore, and copper

real estate market declining in Sydney, Australia

money going out of Manhattan, New York

What is the debt ratio for a firm with an equity multiplier of 3.5?

Multiple Choice

58.51 percent

66.25 percent

44.09 percent

71.43 percent

Which of the following refer to ratios that measure the relationship between a firm’s liquid (or current) assets and its current liabilities?

Multiple Choice

internal-growth

market value

liquidity

cross-section

For publicly traded firms, which of these ratios measure what investors think of the company’s future performance and risk?

Multiple Choice

profitability ratios

liquidity ratios

price value ratios

market value ratios

Which of the following is the maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings?

Multiple Choice

sustainable growth rate

weighted growth rate

internal growth rate

retained earnings growth rate

To interpret financial ratios, managers, analysts, and investors use which of the following type of benchmarks?

Multiple Choice

time series analysis

time-industry analysis

competitive analysis

cross-industry analysis