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CFIN EXAM LATEST VERSION WITH REAL QUESTIONS AND ANSWERS ALL CORRECT

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CFIN EXAM LATEST VERSION WITH REAL QUESTIONS AND ANSWERS ALL CORRECT The marginal cost of debt is - Answer-an after-tax concept & in effect, subsidized by the government Company A has unused production capacity and makes a product similar to Company B. Company B acquires Company A to obtain ...

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  • October 4, 2024
  • 5
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • cfin
  • cfin exam latest version with real questions
  • the marginal cost of debt is

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CFIN EXAM LATEST VERSION WITH
REAL QUESTIONS AND ANSWERS
ALL CORRECT

The marginal cost of debt is - Answer-an after-tax concept & in effect, subsidized by the
government

Company A has unused production capacity and makes a product similar to Company
B. Company B acquires Company A to obtain the unused production capacity. This is
an example of - Answer-horizontal integration

The appropriate discount rate to use in discounting the cash flow of the target is -
Answer-the target's cost of equity

Which of the following items would have the greatest impact on the book value of the
firm ? - Answer-depreciation of the assets

The market price of the target's securities multiplied by the shares outstanding is called
- Answer-market capitalization

The appraised asset value less the firm's liabilities is known as - Answer-the liquidation
value

The implicit assumption behind the dilution method is that the capital markets have fairly
valued the stock. - Answer-TRUE

Earnings dilution considers the income that the target firm would add to the acquirer's
net income and computes the number of shares that could be issued without diluting the
EPS for the existing shareholders. - Answer-TRUE

The acquiror begins the negotiation with - Answer-the maximum price it can pay without
post-merger earnings per share dilution
&
the present value of the target's enhanced cash flows

Discounting the terminal value of the target involves a discount rate that is - Answer-the
target's cost of equity

The book value of the firm is a similar concept to the net worth of the individual. -
Answer-TRUE

, Capital market status is important in the issue of - Answer-timing

FRITCO - Answer-flexibility, risk, income, timing, control, other

The income step of FRICTO analysis addresses which of the following? - Answer-EPS
dilution, explicit costs, implicit costs

Breakeven EBIT calculations enable managers to assess - Answer-the point at which
EPS dilution is equal for two financing alternatives

Risk involves rare, unpredictable events - Answer-FALSE

Value can be created on the liability side of the balance sheet as well as the asset side.
- Answer-TRUE

Every financing alternative where the dilution effect on EPS of issuing new shares is
matched exactly by the dilution resulting from interest payments on new debt is called -
Answer-Breakeven point


Depreciation expense is a good example of which of the following generally accepted
accounting principles? - Answer-Matching

Although the cash flow statement using the indirect method is useful, it does not show
net income for the period. - Answer-FALSE

Depreciation is a part of - Answer-Cash flow from operating activities

The statement that shows all investments in the company and all the distributions during
a reporting period is called - Answer-the statement of owner's equity

Which ratio shows the average percentage by which sales price exceeds the cost of
goods sold? - Answer-gross margin

Matching refers to including all expenses incurred to realize the revenues reported. -
Answer-TRUE

The statement which records a firm's financial position on a single day is called the
income statement. - Answer-FALSE

Which of the following measures a firms's profitability and asset usage skill? - Answer-
Operating performance ratios

Which of the following ratios measure liquidity? - Answer-Current & Quick

The P/E ratio indicates the stock market's opinion of a company's prospects for growth
and earnings as well as the market's perception of the firm's risk. - Answer-TRUE

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