FIN 534 Final Exam PART 2

The second part of a final exam on financial management.

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FIN 534 FINAL EXAM PART 2 ONLY
Question 1
Which of the following is NOT normally regarded as being a barrier to hostile takeovers?
Answer
Targeted share repurchases.
Shareholder rights provisions.
Restricted voting rights.
Poison pills.
Abnormally high executive compensation.
Question 2
Which of the following is NOT normally regarded as being a good reason to establish an ESOP?
Answer
To enable the firm to borrow at a below-market interest rate.
To make it easier to grant stock options to employees.
To help prevent a hostile takeover.
To help retain valued employees.
To increase worker productivity.
Question 3
Rohter Galeano Inc. is considering how to set its dividend policy. It has a capital budget of
$3,000,000. The company wants to maintain a target capital structure that is 15% debt and 85%
equity. The company forecasts that its net income this year will be $3,500,000. If the company
follows a residual dividend policy, what will be its total dividend payment?
Answer
$205,000
$500,000
$950,000
$2,550,000
$3,050,000
Question 4
If a firm adheres strictly to the residual dividend policy, the issuance of new common stock
would suggest that
Answer
the dividend payout ratio is increasing.
no dividends were paid during the year.
the dividend payout ratio is decreasing.
the dollar amount of investments has decreased.
the dividend payout ratio has remained constant.
Question 5
Which of the following statements is correct?
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Document Details

University
Strayer University
Subject
Finance

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