Sophia Finance Milestone Final_Complete Questions and Answers (Latest 2021/2022)

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Sophia Principles of Finance Milestone Final 1 Mason is a financial analyst who specializes in securities. When providing an analysis of securities to which he has a personal connection, he discl... oses his conflict of interest. By doing so, which federal regulation is he complying with? Securities Act Amendments of 1975 Securities Act of 1933 Sarbanes-Oxley Act of 2002 Securities Exchange Act of 1934 CONCEPT Market Regulation 2 You deposit $7,000 in a bank account that earns 2% compound interest annually. What is the value of your $7,000 in four years? $6,423 $7,577 $7,560 $6,440 CONCEPT Future Value, Single Cash Flows 3 Company A Company B Market Value of Equity $700,000 $900,000 Market Value of Debt $300,000 $200,000 Cost of Equity 8% 10% Cost of Debt 1.5% 3% Tax Rate 30% 25% Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 7%? Both Company A and Company B Neither Company A nor Company B Only Company B Only Company A CONCEPT The WACC 4 What must be forecasted first in order to prepare the pro forma income statement? Cost of goods sold Sales Net income Expenses CONCEPT Forecasting the Income Statement 5 Lucas is worried about his company's short-term viability. What type of financial statement should he look at? Statement of changes in equity Cash flow statement Balance sheet Income statement CONCEPT Introducing Financial Statements 6 Which of the following is true of a market maker? Market makers help companies to negotiate mergers and acquisitions. Market makers assist with market liquidity by facilitating the exchange of securities. Market makers purchase a company's securities before an IPO and then resell them at a premium. Market makers rate the creditworthiness of the issuer. CONCEPT The Role of Investment Banks in Financing 7 Bill wants to buy a bond whose face value is substantially higher than its market price. What kind of bond should he buy? Government Asset-backed Zero-coupon Inflation-linked CONCEPT Types of Bonds 8 Ashlee's friend owes her $100, but he cannot pay it back today. Instead, Ashlee's friend promises to pay her $120 in one year to account for the time value of money. That extra $20 represents the __________. pricing discount interest present value [Show More]

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