What has been the approximate average annual rate of return

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Reference no: EM131859601

1. The additional premium added to the real interest rate by lenders to compensate them for a debt instrument which cannot be converted to cash quickly at its existing value is called?

a. inflation premium

b. default risk premium

c. liquidity premium    

d. maturity premium

e. interest rate premium

2. Venture investors generally use which one of the following target rates to discount the projected cash flows of ventures in the “development” stage of their life cycles:

a. 10%

b. 15%

c. 20%

d. 30%

e. 50%   

3. What has been the approximate average annual rate of return on publicly traded small company stocks since the mid-1920s?

7%

16%     

27%

35%

40%

4. A firm has net income of $320,000 on sales of $3,200,000. Its assets total $2,000,000; the equity at the beginning of the year was $1,600,000 and dividends paid were $80,000. What is the sustainable growth rate?

a. 5%

b. 15%

c. 6.25%

d. 4.69%

e. none of the above

Reference no: EM131859601

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