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FIN 534 Course Success is a Tradition
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• FIN 534 Entire Course

• FIN 534 Week 1 Chapter 1 Solution

• FIN 534 Week 1 Chapter 1 Solution
• FIN 534 Week 1 Chapter 2 Solution
• FIN 534 Week 2 Chapter 3 Solution
• FIN 534 Week 3 Chapter 4 Solution
• FIN 534 Week 3 Chapter 5 Solution
• FIN 534 Week 4 Chapter 6 Solution

• a. One of the disadvantages of a sole
  proprietorship is that the proprietor is exposed
  to unlimited liability.
•  b. It is generally easier to transfer ones
  ownership interest in a partnership than in a
  corporation.
•  c. One of the advantages of the corporate form
  of organization is that it avoids double
  taxation.

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• FIN 534 Week 1 Chapter 2 Solution

• FIN 534 Week 1 DQ 1

• a. Typically, a firms DPS should exceed its EPS.
•  b. Typically, a firms EBIT should exceed its
  EBITDA.
•  c. If a firm is more profitable than average
  (e.g., Google), we would normally expect to see
  its stock price exceed its book value per share.

• Imagine a startup company of your own and briefly
  trace its development from a sole proprietorship
  to a major corporation with a focus on how that
  development would be financed.

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• FIN 534 Week 1 DQ 2

• FIN 534 Week 1 Quiz 1

• Week 1 discussion 2
•  Discuss ways that the basic concepts we have
  discussed in this chapter directly impact your
  life. Provide specific examples to support your
  response.

• Question 1
•  You recently sold 100 shares of your new
  company, XYZ Corporation, to your brother at a
  family reunion. At the reunion your brother gave
  you a check for the stock and you gave your
  brother the stock certificates. Which of the
  following statements best describes this
  transaction?

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• FIN 534 Week 2 Chapter 3 Solution

• FIN 534 Week 2 DQ 1

• a. The ratio of long-term debt to total capital
  is more likely to experience seasonal
  fluctuations than is either the DSO or the
  inventory turnover ratio.
•  b. If two firms have the same ROA, the firm with
  the most debt can be expected to have the lower
  ROE.
•  c. An increase in the DSO, other things held
  constant, could be expected to increase the total
  assets turnover ratio.

• Week 2 discussion 1
•  Assume you are deciding whether or not to invest
  in a particular company. Discuss which elements
  of which financial statements you would want to
  carefully examine. Explain your rationale.

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• FIN 534 Week 2 DQ 2

• FIN 534 Week 3 Chapter 4 Solution

• Week 2 discussion 2
•  From the e-Activity, determine if the company
  you analyzed would be a good investment for you
  or not. Provide specific examples to support your
  response.

• A 50,000 loan is to be amortized over 7 years,
  with annual end-of-year payments. Which of these
  statements is CORRECT?
•  a. The annual payments would be larger if the
  interest rate were lower.
•  b. If the loan were amortized over 10 years
  rather than 7 years, and if the interest rate
  were the same in either case, the first payment
  would include more dollars of interest under the
  7-year amortization plan.

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• FIN 534 Week 3 Chapter 5 Solution

• FIN 534 Week 3 DQ 1

• . Three 1,000 face value bonds that mature in 10
  years have the same level of risk, hence their
  YTMs are equal. Bond A has an 8 annual coupon,
  Bond B has a 10 annual coupon, and Bond C has a
  12 annual coupon. Bond B sells at par. Assuming
  interest rates remain constant for the next 10
  years, which of the following statements is
  CORRECT?

• Week 3 discussion 1
•  Starting with your current situation, describe
  what you must do to ensure an annual retirement
  income of 60,000 starting at age 65.

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• FIN 534 Week 3 DQ 2

• FIN 534 Week 3 Quiz 2

• Week 3 discussion 2
•  Discuss the impact of Standard Poors
  downgrading the U.S. credit rating in 2011.
  Address current and likely future impact on U.S.
  business, individuals, the global economy and
  current financial practices. Provide specific
  examples to support your response.

• a. Since companies can deduct dividends paid but
  not interest paid, our tax system favors the use
  of equity financing over debt financing, and this
  causes companies debt ratios to be lower than
  they would be if interest and dividends were both
  deductible.

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• FIN 534 Week 4 Chapter 6 Solution

• FIN 534 Week 4 Chapter 7 Solution

• b. If you were restricted to investing in
  publicly traded common stocks, yet you wanted to
  minimize the riskiness of your portfolio as
  measured by its beta, then according to the CAPM
  theory you should invest an equal amount of money
  in each stock in the market. That is, if there
  were 10,000 traded stocks in the world, the least
  risky possible portfolio would include some
  shares of each one.

• Which of the following statements is CORRECT?
•  a. The constant growth model takes into
  consideration the capital gains investors expect
  to earn on a stock.
•  b. Two firms with the same expected dividend and
  growth rates must also have the same stock price.
•  c. It is appropriate to use the constant growth
  model to estimate a stock's value even if its
  growth rate is never expected to become constant.

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• FIN 534 Week 4 DQ 1

• FIN 534 Week 4 DQ 2

• Information is the investor's best tool when it
  comes to investing wisely. Often, the lack of
  reliable, readily available, current information
  also opens the door to fraud. It is easier for
  the unscrupulous to spread false information and
  to manipulate a stock's price when accurate
  information about the company is scarce.

• Week 4 discussion 2
•  Discuss the non-rational factors that may have a
  role in the valuation of stocks and stock market
  equilibrium. Provide specific examples to support
  your response.

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• FIN 534 Week 4 Quiz 3

• FIN 534 Week 5 Chapter 8 Solution

• 1) A time line is not meaningful unless all
  cash flows occur annually
•  2) Time lines are useful for visualizing
  complex problems prior to doing actual
  calculations
•  3) Time lines cannot be constructed to deal
  with situations where some of the cash flows
  occur annually but others occur quarterly

• Which of the following statements is CORRECT?
•  a. Put options give investors the right to buy a
  stock at a certain strike price before a
  specified date.
•  b. Call options give investors the right to sell
  a stock at a certain strike price before a
  specified date.
•  c. Options typically sell for less than their
  exercise value.

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• FIN 534 Week 5 Chapter 9 Solution

• FIN 534 Week 5 DQ 1

• Bankston Corporation forecasts that if all of its
  existing financial policies are followed, its
  proposed capital budget would be so large that it
  would have to issue new common stock. Since new
  stock has a higher cost than retained earnings,
  Bankston would like to avoid issuing new stock.
  Which of the following actions would REDUCE its
  need to issue new common stock?

• A capital budgeting analysis conducts a test to
  see if the benefits (i.e., cash inflows) are
  large enough to repay the company for three
  things (1) the cost of the asset, (2) the cost
  of financing the asset (e.g., interest, etc.),
  and (3) a rate of return (called a risk premium)
  that compensates the company for potential errors
  made when estimating cash flows that will occur
  in the distant future.

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• FIN 534 Week 5 Quiz 4

• FIN 534 Week 6 Chapter 10 Solution

• Question 1
•   Assume that in recent years both
  expected inflation and the market risk premium
  (rM
•  - rRF) have declined. Assume also that all
  stocks have positive betas. Which of the
  following would be most likely to have occurred
  as a result of these changes?

• Which of the following statements is CORRECT?
•  a. The internal rate of return method (IRR) is
  generally regarded by academics as being the best
  single method for evaluating capital budgeting
  projects.
•  b. The payback method is generally regarded by
  academics as being the best single method for
  evaluating capital budgeting projects.

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• FIN 534 Week 6 Chapter 11 Solution

• FIN 534 Week 6 DQ 1

• a. An externality is a situation where a project
  would have an adverse effect on some other part
  of the firms overall operations. If the project
  would have a favorable effect on other
  operations, then this is not an externality.

• Week 6 discussion 1
•  Analyze the concept of stress test as applied
  to financial institutions and create a better
  alternative for assessing the viability of a
  financial institution.

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• FIN 534 Week 6 Quiz 5

• FIN 534 Week 7 Chapter 12 Solution

• Finance 534 week 6 Quiz5
•  Question 1
•   Call options on XYZ Corporations
  common stock trade in the market. Which of the
  following statements is most correct, holding
  other things constant?

• 1. Which of the following statements is CORRECT?
•  a. Perhaps the most important step when
  developing forecasted financial statements is to
  determine the breakdown of common equity between
  common stock and retained earnings.
•  b. The first, and perhaps the most critical,
  step in forecasting financial requirements is to
  forecast future sales.

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• FIN 534 Week 7 Chapter 13 Solution

• FIN 534 Week 7 DQ 1

• Suppose Leonard, Nixon, Shull Corporations
  projected free cash flow for next year is
  100,000, and FCF is expected to grow at a
  constant rate of 6. If the companys weighted
  average cost of capital is 11, what is the value
  of its operations?

• Week 7 discussion 1
•  Analyze the process of forecasting financial
  statements and make at least one recommendation
  for improving the accuracy of forecasts. Provide
  specific examples to support your response.

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• FIN 534 Week 7 DQ 2

• FIN 534 Week 7 Quiz 6

• Week 7 discussion 2
•  Drawing on what you discovered in the
  e-Activity, determine what additional steps can
  be taken in the valuation of a corporation to
  avoid instances like the one you researched from
  occurring in the future. Provide specific
  examples to support your response.

• Assume that the economy is in a mild recession,
  and as a result interest rates and money costs
  generally are relatively low. The WACC for two
  mutually exclusive projects that are being
  considered is 8. Project S has an IRR of 20
  while Project L's IRR is 15. The projects have
  the same NPV at the 8 current WACC.

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• FIN 534 Week 8 Chapter 14 Solution

• FIN 534 Week 8 Chapter 15 Solution

• a. Modigliani and Miller argue that investors
  prefer dividends to capital gains because
  dividends are more certain than capital gains.
  They call this the ?bird-in-the hand? effect.
•  b. One reason that companies tend to avoid stock
  repurchases is that dividend payments are taxed
  at a lower rate than gains on stock repurchases.

• Which of the following statements best describes
  the optimal capital structure?
•  a. The optimal capital structure is the mix of
  debt, equity, and preferred stock that maximizes
  the companys earnings per share (EPS).
•  b. The optimal capital structure is the mix of
  debt, equity, and preferred stock that maximizes
  the companys stock price.

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• FIN 534 Week 8 DQ 1

• FIN 534 Week 8 DQ 2

• Week 8 discussion 1
•  I examined PepsiCo to determine how it should
  address its free cash flow, either through
  distributions to shareholders or repurchasing of
  stock.

• Week 8 discussion 2
•  Capital structure is the manner in which a
  firms assets are financed that is, the
  right-hand side of the balance sheet. Capital
  structure is normally expressed as the percentage
  of each type of capital used by the firm--debt,
  preferred stock, and common equity

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• FIN 534 Week 8 Quiz 7

• FIN 534 Week 9 Chapter 16 Solution

• Finance 534 week 8 quiz 7
•  This quiz consist of 30 multiple choice
  questions. The first 15 questions cover the
  material in Chapter 12. The second 15 questions
  cover the material in Chapter 13. Be sure you are
  in the correct Chapter when you take the quiz.

• Swim Suits Unlimited is in a highly seasonal
  business, and the following summary balance sheet
  data show its assets and liabilities at peak and
  off-peak seasons (in thousands of dollars)
•   Peak Off-Peak
•   Cash 50 30

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• FIN 534 Week 9 DQ 1

• FIN 534 Week 9 DQ 2

• Week 9 discussion 1
•  Based on the content of this chapter and what
  you discovered in the e-Activity, analyze cash
  management technology and make at least one
  recommendation for another technique that would
  enhance working capital management. Explain the
  reasoning behind your recommendation.

• Week 9 discussion 2
•  Create an idea for a startup venture and discuss
  the most viable way to raise the working capital
  to get the startup running. Explain your
  rationale.

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• FIN 534 Week 9 Quiz 8

• FIN 534 Week 10 Chapter 17 Solution

• Correct Answer
• If a firm repurchases some of its stock in the
  open market, then shareholders who sell their
  stock for more than they paid for it will be
  subject to capital gains taxes.

• In Japan, 90-day securities have a 4 annualized
  return and 180-day securities have a 5
  annualized return. In the United States, 90-day
  securities have a 4 annualized return and
  180-day securities have an annualized return of
  4.5. All securities are of equal risk, and
  Japanese securities are denominated in terms of
  the Japanese yen.

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• FIN 534 Week 10 DQ 1

• FIN 534 Week 10 DQ 2

• Week 10 discussion 1
•  Based on what you uncovered in the e-Activity,
  determine the most significant risk factors
  associated with investing in the company you
  selected when compared with investing in a
  domestic company. Provide specific examples to
  support your response.

• Week 10 discussion 2
•  Recommend three policy changes that would make
  the Federal Reserves job of controlling U.S.
  interest rates easier. Explain your reasoning.

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• FIN 534 Week 10 Quiz 9

• FIN 534 Week 11 DQ 1

• Question 14
•  Which of the following statements is CORRECT?
•  Answer
•  Question 15
• A lockbox plan is

• Week 11 discussion 1
•  Reflect on the lessons learned during this class
  and discuss the most interesting or surprising
  thing you learned. Explain what made it so.

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• FIN 534 Week 11 DQ 2

• FIN 534 Week 11 Quiz 10

• Week 11 discussion 2
•  Discuss how you plan on using what you learned
  in this course in your current or future
  position. What will prove to be the most
  valuable?

• Question 1
• Suppose DeGraw Corporation, a U.S. exporter, sold
  a solar heating station to a Japanese customer at
  a price of 143.5 million yen, when the exchange
  rate was 140 yen per dollar. In order to close
  the sale, DeGraw agreed to make the bill payable
  in yen, thus agreeing to take some exchange rate
  risk for the transaction.

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