Training test for current control 6

What are the main methods used to value shares?

• Dual (or fair value) method, net assets basis (or intrinsic value) method, yield basis method
• Principal, portfolio, capital assets pricing, yield basis method
• Yield basis method, capital assets pricing
• Total debt / shareholder's equity, yield basis method, principal, sourcing the capital

Which security does not have a maturity date?

• Common stock
• Futures
• Bonds
• Every security must have a maturity date

Choose the correct formula to calculate the return on equity (ROE).

• Net income / common book value
• Operating profits / total assets
• Cash + accounts receivable / current liabilities
• Operating profits / sales

Choose the correct formula for net tangible assets.

• Total assets − intangible assets – liabilities
• Net revenue – current liabilities
• Sales / total assets
• Financial asset / liability

Choose the correct formula for calculation of expected return.

• Expected profits / equity share capital *100
• Operating profits / total liabilities
• Expected profits / total liabilities * 100
• Operating profits / normal rate

Choose the correct formula for the calculation of the value of a share.

• Expected rate / normal rate * paid-up value of one share
• Expected profits / equity share capital * 100
• Total dividends / net income * 100
• Financing profits / total liabilities

Choose the correct formula for the calculation of book value per share.

• Company's common equity value/total number of shares
• Dividend in 1 year / required rate of return-growth rate
• Expected profits / debt capital * 100
• Total dividends / total income * 100

Which of the following represents the number of years needed to recover the initial cash outlay related to an investment?

• Payback period
• Maturity period
• Recovery period
• Turnover period

What is capital budgeting?

• The process of decision making with respect to investments made in fixed assets
• The process of making business decisions involving money
• The process of making economic decisions within the corporation or partnership
• The process of making important decisions regarding firm's disposal

How could you define the present value of an investment's annual free cash flows less the investment's initial outlay?

• Net present value
• Future value
• Deferred annuity
• Present value