Financial Management - Study Mode

[#376] A formula such as an original investment plus an expected capital gain is used to calculate
Correct Answer

(C) expected final stock price

Explanation

Solution: A formula such as an original investment plus an expected capital gain is used to calculate expected final stock price.

[#377] Book value is_______________.
Correct Answer

(C) the accounting value of the firm as reflected in the financial statements

Explanation

Solution: Book value is the accounting value of the firm as reflected in the financial statements. Book value is also the net asset value of a company calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

[#378] To whom does the Treasurer most likely report?
Correct Answer

(A) Chief Financial Officer

Explanation

Solution: To Chief Financial Officer, the Treasurer most likely report. The chief financial officer (CFO) is the officer of a company that has primary responsibility for managing the company's finances, including financial planning, management of financial risks, record-keeping, and financial reporting.

[#379] The price to book value ratio tends to be close for_____________.
Correct Answer

(B) banks

Explanation

Solution: The price to book value ratio tends to be close for banks. Price-to-book value (P/B) is the ratio of market value of a company's shares (share price) over its book value of equity. The book value of equity, in turn, is the value of a company's assets expressed on the balance sheet.

[#380] The return after the pay off period is not considered in case of __________.
Correct Answer

(A) Payback period method

Explanation

Solution: The return after the pay off period is not considered in case of Payback period method. Payback period is the time in which the initial outlay of an investment is expected to be recovered through the cash inflows generated by the investment. It is one of the simplest investment appraisal techniques.