第一章1.The passive investor assumes the market is efficient and that stocks arecorrectly priced to reflect the risk involved in buying the stock. （）答案:对2.The term financial statement refers to… （）答案:All the answers arecorrect3.Which of the following is false regarding why a SWOT Analysis is used? ( )答案:To reduce opportunities available to a business4.__________ of the profitability of the firm over a period of time such as a year. ( )答案:The income statement is a summary5.Financial statements present a numerical picture of a company’s financialand operating health. ( )答案:对6.Which of the following SWOT elements are external factors for a business?（）答案:Opportunities and Threats7.The ________ does not represent continuing operations in any way, but issimply a snapshot of the total worth of a firm at a given point in time. ( )答案:balance sheet8.Cash inflows arise from _____ assets, ________ liabilities, and ___________stockholders’ equity. ( )答案:decreasing; increasing; increasing9.What is a creditor’s objective in performing an analysis of financialstatements? ( )答案:To decide whether or not the borrower has the ability to repay interest and principal on borrowed funds.10.The major device for measuring the profitability of a firm over a definedperiod of time is the ( )答案:income statement.第二章1.The transactions between the two claimants (debtors and shareholders) andthe firm are the firm’s _ activities. ( )答案:Financing2.Free cash flow does not affect common shareholder’s equity. （）答案:对3.The process of comparing various financial factors of a company over aperiod of time is known as （）答案:Intra‐firm comparison4.If an analyst has reformulate balance sheets and income statements, she doesnot need a cash flow statement to calculate free cash flow. ( )答案:对5. A firm generated free cash flow $2,348 million and paid net interest of $23million after tax. It paid a dividend of $14 million and issued shares for $54million. There were no share repurchases. What did the treasurer do with the remaining cash flow and for how much? （）答案:There was $2,365 of cashleft over from the free cash flow and the treasurer used it to buy debt.6.What drives free cash flow? ( )答案:operations7.Reformulated balance sheets inform analysts about the firm’s strategy forrunning the business. ( )答案:对8.Which of the following activities is NOT an investing activity? （）答案:borrowing money9.An operating asset is ( )答案:used to produce goods or services to sell tocustomers in operations.parison of financial statements highlights the trend of the _________ of thebusiness. ( )答案:All the answers are correct第三章1.Low profit margins always imply low return on net operating assets. （）答案:错2.Which the following measure drive return on common equity (ROCE)positively? （）答案:Gross margin3.Under what condition would a firm’s return on common equity (ROCE) beequal to its return on net operating assets (RNOA)? （）答案:The SPREAD is zero, that is, return on net operating assets (RNO4. A reduction in the advertising expense ratio increase return on commonequity? ( )答案:对5. A firm should always purchase inventory and supplies on credit rather thanpaying cash. （）答案:错6. A firm has a return of 11.2 percent on net operating assets of $400 million, ashort term borrowing rate of 4.0 percent after tax and a return on operating assets of 8.5 percent. What is the firm’s operating liability leverage? （）答案:0.600 borrowing cost drive return on common equity (ROCE) negatively. ( )答案:对8.Which of the following would explain an observed decrease in return onequity, all else equal? （）答案:Increase in interest rate on debt9.The following information is from reformulated financial statements (inmillion) what is the firm’s ROCE and RNOA? ( )答案:15.0% and 13.0%10.Under what condition would a firm’s return on net operating assets (RNOA)be equal to its return on operating assets (ROOA)? ( )答案:The operatingliability leverage spread (OLSPREAD) is zero, that is, ROOA equals theimplicit borrowing rate for operating liabilities.第四章1.What measures tells you that a firm is a no-growth firm? ( )答案:A firm haszero or negative residual earnings growth2.Which the following item is part of unusual (transitory) income? ( )答案:Gainon the disposal of property3.Firms can grow earnings, but not create (share) value （）答案:对4.The following number were calculated from the financial statements for afirm for 2012 and 2011:How much of the change in ROCE from 2011 to 2012 is due to financing activities? （）答案:3.37%5.Transitory earnings are current earnings that are likely to be maintained inthe future. ( )答案:错6.Which of the following could cause return on net operating assets to increase,all other things equal? （）答案:Increase in inventory turnover7.Below is selected information from TricorpReturn on net operating assets forYear 1 is: ( )答案:15.4%.8.RE represents extra profit available to the company/shareholders this iswhat drives growth in a company’s (share) value. （）答案:对9.Return on operating assets is a measure of which of the following? （）答案:Efficiency10.Below is selected information from Tricorp company Which of the followingis correct concerning changes at Tricrop from Year 1 to Year 2? ( )答案:RNOA Decreased, ROCE Decreased第五章1. A firm can create future income by temporarily increasing its bad debtallowance. （）答案:对2.Which of the following item are managed to increase gross revenue? （）答案:Increase receivables3.Increasing profit margins by underestimating expenses creates net operatingassets. ( )答案:对4.Why do analysts compare cash flow from operations with earnings to assessthe quality of the earnings? （）答案:The difference between earnings andcash flow from operations is explained by the accruals, and the accruals aret he “soft” part of earnings that can be manipulated.5. A decrease in warranty liabilities increases net sales. ( )答案:错6.IBM reported a 3 percent increase in income for its first quarter of 2000,beating analysts’ estimates. But it also reported a decline in revenue. Its stock price dropped in response to the report. Which of the following statement isincorrect for the drop in stock price on an earnings increase? （）答案:Theasset turnover is expected to increase.7.Low depreciation charges forecast losses in future income statements. ( )答案:对8.Which of the following is least likely to be associated with low-qualityearnings? （）答案:Decrease in borrowings.9.Accounting quality analysis is not part of the wider analysis of sustainableearnings. （）答案:错10.Which of the following is not an indicator of accounting Manipulation? （）答案:Loss on sale of discontinued business segments第六章1.If the intrinsic value of a stock is greater than its market value, which of thefollowing is a reasonable conclusion? ( )答案:The market is undervaluing thestock.2.The _______ is defined as the present value of all cash proceeds to the investorin the stock. ( )答案:intrinsic value3.FCF and DDM valuations should be ____________ if the assumptions used areconsistent. ( )答案:similar for all firms4.Because the DDM requires multiple estimates, investors should ( )答案:carefully examine inputs to the model and perform sensitivity analysis onprice estimates.5. A preferred stock will pay a dividend of $2.75 in the upcoming year, andevery year thereafter, i.e., dividends are not expected to grow. You require areturn of 10% on this stock. Use the constant growth DDM to calculate theintrinsic value of this preferred stock. ( )答案:$27.506.At the end of 2012, you forecast that a firm’s free cash flow for 2013 will be$430 million. If you forecast that free cash flow will grow at 5% per yearthereafter, what is the enterprise value? Use a required return of 10 percent.( )答案:8,600millionpany X has negative free cash flow but strong earnings that yield areturn on equity of 27 percent. Which of the following statements is morelikely to be true? ( )答案:the company is investing heavily8.At the end of 2012, you forecast the following cash flows (in millions) for afirm with net debt of $759 million: You forecast that free cash flow will growat a rate of 4% per year after 2015. Use a required return of 10% to calculateboth the fir ms’ enterprise value and the value of the equity at the end of 2012?( )答案:7,900million, 7,141 million9.Value is based on expected dividends, but forecasting dividends is notrelevant to value as a practical matter. （）答案:对10. A firm that has higher free cash flow have a higher value? （）答案:错第七章1.The following are earnings and dividend forecasts made at the end of 2012for a firm with $20.00 book value per common share at that time. The firmhas a required equity return of 10% per year. Forecast return of commonequity and residual earnings for the year of 2015. （）答案:ROCE is 15.71%and RE is 1.492. A firm cannot maintain a ROCE less than required return and stay in businessindefinitely. （）答案:错rmation indicates that a firm will earn a return on common equity aboveits cost of equity capital in all years in all years in the future, but its sharetrade below book value. Those share must be mispriced. （）答案:对4.The following are ROCE forecasts made for a firm at the end of 2010. ROCE isexpected to continue at the same level after 2013. The firm reported bookvalue of common equity of $3.2 billion at the end of 2010, with 500 millionshared outstanding. If the required equity return is 12%, what is the pershare value of these shares? （）答案:$6.405.Residual earnings valuation does not work well for companies like Coca-cola,Cisco System, or Nike, which have substantial assets, like brands, R&D assets, and entrepreneurial know-how off the books. A low book value must giveyou a low valuation. ( )答案:错6. A firm with book value of $15.60 per share and 100 percent dividend payoutis expected to have a return on common equity of 15% per year indefinitelyin the future. Its cost of equity capital is 10%. Calculate the intrinsic price tobook ratio. （）答案:1.57.Which of the following items are the drivers of Residual earnings? ( )答案:Return on common equity and growth in book value8.In September 2008 the shares of Dell, Inc, the computer maker, traded at $20.50 each. In its last annual report, Dell had reported book value of $3, 735million with 2, 060 million shares outstanding. Analysts were forecastingearnings per share of $1.47 for fiscal year 2009 and $1.77 for 2010 Dell paysno dividends. Calculate the per-share value of Dell in 2008 based on theanalysts’ forecasts, with an additional forecast that residual earnings willgrow at the anticipated GDP growth rate of 4 percent per year after 2010.Use a required return of 10 percent. the BPS at the end of fiscal-year 2008will be ( )答案:$1.8139.Calculate the per-share value of Dell in 2008 based on the analysts’ forecasts,with an additional forecast that residual earnings will grow at the anticipated GDP growth rate of 4 percent per year after 2010. Use a required return of 10 percent. ( )答案:24.84第八章1.Abnormal earnings growth is always equal to growth of (change in) residualearnings. （）答案:对2. A firm’s earnings are expected to grow at a rate equal to the required rate ofreturn for its equity,12%.what is the trailing P/E ratio? （）答案:9.333.what is the forward P/E ratio?( )答案:8.334. A P/E ratio for a bond is always less than that for a stock. （）答案:错5.which of the following statement is correct? （）答案:the normal forwardP/E and the normal trailing P/E always differ by 1.06.The following are earnings and dividend forecasts made at the end of 2010.The firm has a required equity return of 10% per year. Forecast abnormalearnings growth for 2012. ( )答案:0.3257.Forecast abnormal earnings growth for 2013. ( )答案:0.1658.Calculate the normal forward P/E for this firm. ( )答案:109.Firm can increase its earnings growth but not affect the value of its equity （）答案:对10.In early fiscal year 2009, analysts were forecasting $3.90 for Nike’s earningsper share for the fiscal year ending May 2009 and $4.45 for 2010, with adividend per share of 92 cents (0.92) expected for 2009. Forecast the cum-dividend earnings growth rate for 2010. （）答案:16.46%第九章1.Which of the following situation diversification dose not reduce risk？( )答案:returns on securities in the portfolio are perfectly correlated2. A statistical measure of the variability of a distribution around its mean isreferred to as __________. ( )答案:the standard deviation3.Normal distribution of returns can characterize the risk of investing in abusiness? （）答案:错4. A set of possible values that a random variable can assume and theirassociated probabilities of occurrence are referred to as __________. （）答案:probability distribution5.Below are the reformulate balance sheet for two firms with similar revenues.Amounts are in millions of dollars. Which firm look more risky forshareholders? Note that cash has been treated as operating cash. ( )答案:Firm Bing the CAPM, ß is a measure of: ( )答案:share price volatility7.Which of the following is not a measure of risk? ( )答案:correlationcoefficient8.Below are the reformulate income statement for two firms in the same line ofbusiness. Amounts are in millions of dollars. Which firm look more risky forshareholders? Reformulate the income statements: ( )答案:Firm A9.which of the following statement is not correct? ( )答案:variation in return onnet operating assets is only driven by profit margins10.Financing risk is driven by_____ ( )答案:All the answers are correct.第十章1.___________ is the extra required return that a lender demands to compensatefor the risk that the borrower will default. ( )答案:Default premium2.Which of the following statement is not the objective in reformulatingfinancial statement for credit analysis？( )答案:groups assets and liabilitiesin such a way as to evaluate the firm’s underlying profitability.3.______ is the error of forecasting that a firm will not default when in fact itdoes. ( )答案:A Type I error4.which of the following is the Off-balance sheet financing? ( )答案:All theanswers are correct5.which of the following statement is not correct? ( )答案:Pro forma analysisforecasts is not useful for credit analysis.6.The following numbers are extracted from the financial statements for a firmfor 2011 and 2012. Amounts are in millions of dollars. At the end of 2011, the firm’s 80 million shares traded at $25 each, but by the end of 2012 theytraded at $15.Calculate Z-score for 2011 ( )答案:2.687.Calculate Z-score for 2011 ( )答案:1.098.After analyzing the default risk for a five-year bond with a maturity value of$1,000 and an 8percent annual coupon, an analyst estimates the requiredreturn for the bond at 7percent per year. The bond has just been issued at aprice of $1,000. What is the value of the bond at a 7 percent required return?( )答案:1040.989.What is the yield-to-maturity with a market price of $1,000? ( )答案:8%10.What is the expected return of buying the bond at a price of $1,000? ( )答案:8%。