QUESTION: 45

"Shareholder wealth" in a firm is represented by:

The number of people employed in the firm
The book value of the firm's assets less the book value of its liabilities
The amount of salary paid to its employees
The market price per share of the firm's common stock

Answer(s): D

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QUESTION: 46

The long-run objective of financial management is to:

Maximize earnings per share
Maximize the value of the firm's common stock
Maximize return on investment
Maximize market share

Answer(s): B

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QUESTION: 47

What are the earnings per share (EPS) for a company that earned $100, 000 last year in after-tax profits, has 200, 000 common shares outstanding and $1.2 million in retained earning at the year end?

$100, 000
$6.00
$0.50
$6.50

Answer(s): C

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QUESTION: 48

A single, overall cost of capital is often used to evaluate projects because:

It avoids the problem of computing the required rate of return for each investment proposal
It is the only way to measure a firm's required return
It acknowledges that most new investment projects have about the same degree of risk
It acknowledges that most new investment projects offer about the same expected return

Answer(s): A

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Free ABA CTFA Exam Braindumps (page: 13)

QUESTION: 45

QUESTION: 46

QUESTION: 47

QUESTION: 48

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