Week 1-4 Finance Homework

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1. | Question : | (TCO 1) Why is maximization of the current value per share a more appropriate financial management goal than profit maximization? | | | Student Answer: | | Because by maximizing the current stock value you also maximize the company’s profit for the year. | | | | Because this criterion is non-ambiguous. | | | | Because financial managers always act in the best interest of shareholders. | | | | B and C | | | | Points Received: | 0 of 3 | | Comments: | | | | 2. | Question : | (TCO 1) Book values are different to market values because: | | | Student Answer: | | Book values reflect the value of the asset based on generally-accepted accounting principles. | | | | Book values are used in the company's balance sheet. | | | | Book values do not reflect the amount someone is willing to pay today for an asset. | | | | All of the above | | | | Points Received: | 3 of 3 | | Comments: | | | | 3. | Question : | For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000 (TCO 1) Suppose that Sports Baseball has 20,000 shares of stock. What is the dividends per share figure? | | | Student Answer: | | 5.0 | | | | 8.75 | | | |…...

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