Business Finance Chapters 10-21

7 Questions  I  By Pinkyswitch on October 28, 2012

  
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1.  The valuation of a financial asset is based on the concept of determining the present value of future cash flows.
A.
B.
C.
2.  The prices of financial assets are based on the expected value of future cash flows, discount rate, and past dividends.
A.
B.
C.
3.  The market determined required rate of return is also called the discount rate.
A.
B.
C.
4.  The discount rate depends on the market's perceived level of risk associated with an individual security.
A.
B.
C.
5.  By using different discount rates, the market allocates capital to companies based on their risk, efficiency, and expected returns.
A.
B.
C.
6.  In estimating the market value of a bond, the coupon rate should be used as the discount rate.
A.
B.
C.
7.  Most bonds promise both a periodic return and a lump-sum payment.
A.
B.
C.
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