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Finance Multiple Choice Questions with A+ Answers

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Question;Company A offers $30 per share to acquire Company B. Company's B estimated value of equity is $50 million, it has debt of 5 million, and outstanding shares of 2 million. This will probably result in:a decrease in Company A's stock pricea decrease in Company B's stock pricean increase in Company A's stock pricenone of the aboveno change in Company B's stock priceMoveFlag this QuestionQuestion 2 2 pts In a financial merger:In a financial merger:the merged companies combine operationsEquity is used to finance the mergerDebt is used to finance the mergerthe merged companies do not combine operationsnone of the aboveQuestion 3 2 pts Delta Airlines and Northwest Airlines merged in 2008. This merger is an example of:Delta Airlines and Northwest Airlines merged in 2008. This merger is an example of:a vertical mergermore information is needed to answer this questiona conglomerate mergernone of the abovea horizontal mergerQuestion 4 2 pts Delta airlines acquired a refinery in Pennsylvania in 2012. This is an example of:Delta airlines acquired a refinery in Pennsylvania in 2012. This is an example of:none of the abovea vertical mergermore information is needed to answer this questiona conglomerate mergera horizontal mergerQuestion 5 2 pts Skip to question text.Company A is interested in acquiring Company B. Estimated present value of Company B is $1 billion.Company B has 50 million shares of stock outstanding and no debt. Company B's book value is $22.50.What is the maximum price per share that Company A should offer?$25.25$20.00$16.25none of the above$22.50Question 6 2 pts The December Treasury bond futures contract has a quoted price of 95'18 and the implied interest rate is 3.2% (semiannual). If annual interest rates go up by 1.00 percentage point, what is the value of one contract?The December Treasury bond futures contract has a quoted price of 95'18 and the implied interest rate is 3.2% (semiannual). If annual interest rates go up by 1.00 percentage point, what is the value of one contract?$76,939$85,504$ 69,591$95,523none of the aboveQuestion 7 2 pts Skip to question text.Two companies are evaluating a possible swap. Company A can issue floating-rate debt at LIBOR + 1%, and it can issue fixed rate debt at 9%. Company B can issue floating-rate debt at LIBOR + 1.5%, and it can issue fixed-rate debt at 9.4%. If A issues floating-rate debt and B issues fixed-rate debt, and then they engage in the following swap: A will make a fixed 7.95% payment to B, and B will make a floating-rate payment equal to LIBOR to A. Which of the following statements is correct?none of the aboveThe swap is advantageous to both A and BThe swap is advantageous to B, but not to AThe swap is advantageous to A, but not to BThe swap is not advantageous to either A or BQuestion 8 2 pts "The June Treasury bond futures contract has a quoted price of 102'12. Are current market interest rates higher or lower than the standardized rate on a futures contract?"The June Treasury bond futures contract has a quoted price of 102'12. Are current market interest rates higher or lower than the standardized rate on a futures contract?higher, because the contract is selling at a discountmore information is required to answer this questionNone of the above answers is correctlower, because the contract is selling at a premiumhigher, because the contract is selling at a premiumQuestion 9 2 pts The June Treasury bond futures contract has a quoted price of 102'12. What is the current value of one contract in dollars?The June Treasury bond futures contract has a quoted price of 102'12. What is the current value of one contract in dollars?90,18090,563102,120102,375none of the aboveQuestion 10 2 pts The June Treasury bond futures contract has a quoted price of 102'12. What is the implied annual interest rate?The June Treasury bond futures contract has a quoted price of 102'12. What is the implied annual interest rate?2.90%5.85%3.05%5.80%none of the above

 

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