FINA 355 FINAL EXAM ACTUAL 2025/2026 WITH VERIFIED ANSWERS

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FINA 355 FINAL EXAM ACTUAL 2025/2026 QUESTIONS AND 100% CORRECT ANSWERS Which one of these represents the best means of increasing current shareholder value? - Answer -Increasing the current value of the overall firm Which form of business structure typically has the greatest potential for agency problems? - Answer -Corporation The basic regulatory framework for the public trading of securities in the United States was provided by the: - Answer -Securities Act of 1933 and the Securities Exchange Act of 1934. Muffy's Muffins had net income of $2,535. The firm retains 70 percent of net income. During the year, the company sold $475 in common stock. What was the cash flow to shareholders? - Answer -Cash flow to stockholders = (1 − .70) × $2,535 − 475 = $286 Red Barchetta Co. paid $27,500 in dividends and $28,311 in interest over the past year. During the year, net working capital increased from $13,506 to $18,219. The company purchased $42,000 in fixed assets and had a depreciation expense of $16,805. During the year, the company issued $25,000 in new equity and paid off $21,000 in longterm debt. What was the company's cash flow from assets? - Answer -Cash flow from assets = ($28,311 + 21,000) + ($27,500 − 25,000) = $51,811 Free cash flow is: - Answer -cash that the firm can distribute to creditors and stockholders. Ratios that measure a firm's financial leverage are known as ________ Need assistance on Online classes, Exams & Assignments? Reach out for instant help!! Full Course Assistance, Plagiarism-free Essay Writing, Research Paper, Dissertation, Discussion Posts, etc…. Confidential & Secure services. Tutors are available for all subjects! Email now at: tutorjean01@gmail.com ratios. - Answer -long-term solvency A firm wants a sustainable growth rate of 3.23 percent while maintaining a dividend payout ratio of 29 percent and a profit margin of 8 percent. The firm has a capital intensity ratio of 2. What is the debtequity ratio that is required to achieve the firm's desired rate of growth? - Answer -Sustainable growth rate = .0323 = [ROE × (1 - .29)]/{1 - [ROE × (1 - .29)]} ROE = .04407 ROE = .04407 = .08 × (1/2) × Equity multiplier Equity multiplier = 1.10 Debt-equity ratio = 1.10 - 1 = .10 times A firm has a return on equity of 19 percent. The total asset turnover is 1.8 and the profit margin is 7 percent. The total equity is $3,700. What is the net income? - Answer -Net income = .19 × $3,700 = $703 Mario's Home Systems has sales of $2,790, costs of goods sold of $2,130, inventory of $498, and accounts receivable of $427. How many days, on average, does it take Mario's to sell its inventory? - Answer -Inventory turnover = $2,130/$498 = 4.2771 Days' sales in inventory = 365 days/4.2771 = 85.34 days What effect will an increase in the discount rate have on the present value of a project that has an initial cash outflow followed by five years of cash inflows? - Answer -The PV will decrease. Beatrice invests $1,420 in an account that pays 4 percent simple interest. How much more could she have earned over a 5-year period if the interest had been compounded annually? - Answer -Balance Year 5 with simple interest = $1,420 + ($1,420 × 0.04 × 5) = $1,704.00 Balance Year 5 with compound interest = $1,420 × 1.04^5 = $1,727.65 Additional interest = $1,727.65 - 1,704.00 = $23.65 Your parents are giving you $170 a month for 4 years while you are in Need assistance on Online classes, Exams & Assignments? Reach out for instant help!! Full Course Assistance, Plagiarism-free Essay Writing, Research Paper, Dissertation, Discussion Posts, etc…. Confidential & Secure services. Tutors are available for all subjects! Email now at: tutorjean01@gmail.com