You have completed evaluations of two corporations, Firm D and Firm S, in which you are interested investing. Your comparative analysis shows the two firms are equally sound with regard to their current financial positions, which are about the average for the entire industry. The trend analysis you completed indicates the financial position of Firm D was well above the industry average a few years ago, whereas the financial position of Firm S was substantially lower than the industry average a few years ago. Based on this information, which firm’s stock probably would be better to purchase?

Investment J has an opportunity cost rate equal to 8 percent, compounded monthly, and Investment Q has an opportunity cost rate equal to 8 percent, compounded quarterly. Which investment provides the higher effective annual rate of return?

In which of the following situations will APR = rEAR?

Midterm Essay

Jan is committed to investing $8,000 in her retirement account at the beginning of each year for the next 40 years. The first investment will be made later today. If the investment will earn 6.8 percent, compounded annually, to the nearest dollar, how much will Jan’s investment be worth in 40 years?

Last week, Surety Links Manufacturing (SLM) issued $50 million of new bonds to raise funds to support the company’s growth. SLM’s investment banker charged a 7 percent fee on the total amount of the issue to help the company issue the bonds. Other costs associated with the issue equaled $50,000. How much of the $50 million issue does SLM get to keep after paying all issuing costs?

What is the primary difference between a proprietorship form of business and a partnership form of business?

An agency problem likely exists in a corporation if

Which of the following is not an issue/concern mentioned in both the book and the lectures that analysts should be aware of when conducting financial statement analysis?

According to the textbook, which of the following financial intermediaries was originally created to help depositors build houses for their families in particular geographic areas?