<\/p>\n
1. The Apex Company has just hired Mr. Smith, who is age 25 and is expected to retire at age 60. Mr. Smith\u2019s current salary is $30,000 per year, but his wages are expected to increase by 5 percent annually over the next 35 years. Apex has a defined benefit pension plan in which workers receive 2 percent of their final year\u2019s wages for each year of employment. Assume a world of certainty. Further, assume that all payments occur at year-end. What is Mr. Smith\u2019s expected annual retirement benefit, rounded to the nearest thousands of dollars?<\/strong><\/p>\n a. $ 35,000<\/p>\n b. $ 57,000<\/p>\n c. $ 89,000<\/p>\n d. $116,000<\/p>\n e. $132,000<\/p>\n 2. Midwest Investment Consultants (MIC) operates several stock investment portfolios that are used by firms for investment of pension plan assets. Last year, one portfolio had a realized return of 12.6 percent and a beta coefficient of 1.15. The average T-bond rate was 7 percent and the realized rate of return on the S&P 500 was 12 percent. What was the portfolio\u2019s alpha?<\/strong><\/p>\n a. -0.75%<\/p>\n b. -0.15%<\/p>\n c. 0%<\/p>\n d. 0.15%<\/p>\n e. 0.75%<\/p>\n 3. The Ritz Company has a 40-year-old employee that will retire at age 60 and live to age 75. The firm has promised a retirement income of $20,000 at the end of each year following retirement until death. The firm\u2019s pension fund is expected to earn 7 percent annually on its assets and the firm uses 7% to discount pension benefits. What is Ritz\u2019s annual pension contribution to the nearest dollar for this employee? (Assume certainty and end-of-year cash flows.)<\/strong><\/p>\n a. $2,756<\/p>\n b. $3,642<\/p>\n c. $4,443<\/p>\n d. $4,967<\/p>\n e. $5,491<\/p>\n 4. Which of the following statements about municipal bond financing is most correct? <\/strong><\/p>\n a. In contrast to corporate bonds, municipal bond issues are not required to be registered with the Securities and Exchange Commission.<\/p>\n b. Whereas the vast majority of Treasury and corporate bonds are held by institutions, no municipal bonds are held by individual investors.<\/p>\n c. The primary attraction of municipal bonds to individual investors is their high before-tax yields.<\/p>\n d. Municipal bonds usually pay higher coupon rates than corporate bonds with similar ratings.<\/p>\n e. Municipal bonds are risk-free.<\/p>\n \u00a0<\/p>\n 5.<\/strong> Which of the following statements about a not-for-profit firm\u2019s ownership is most correct?<\/strong><\/p>\n a. Not-for-profit firms are governed by a board of trustees whose members are elected by the community at large.<\/p>\n b. The residual earnings (profits) of not-for-profit firms can be distributed to the firm\u2019s top managers.<\/p>\n c. Not-for-profit firms are exempt from federal taxes, but they must pay state and local taxes, including property taxes.<\/p>\n d. Upon liquidation of a not-for-profit firm, the proceeds from the sale of its assets are distributed, on a pro rata basis, to the firm\u2019s employees.<\/p>\n e. None of the profits are used for private inurement.<\/p>\n \u00a0<\/p>\n 6.<\/strong> Which of the following statements about a not-for-profit firm\u2019s cost of capital estimate is most correct?<\/strong><\/p>\n a. Since a not-for-profit firm has no shareholders, its WACC estimate does not include a cost of equity (fund capital) estimate.<\/p>\n b. The capital structure weights for a not-for-profit firm are set at 50\/50, because such firms can raise $1 of debt financing for each dollar of retained earnings.<\/p>\n c. The cost of tax-exempt debt issued by not-for-profit firms is increased (\u201cgrossed up\u201d) by 1 – T in the WACC estimate to reflect the fact that such firms do not pay taxes.<\/p>\n d. Equity (fund) capital has a cost that is roughly equivalent to the cost of retained earnings to similar investor-owned companies.<\/p>\n e. Not-for-profit firms have a zero cost of capital.<\/p>\n \u00a0<\/p>\n 7. Which of the following statements about a not-for-profit firm\u2019s fund capital is most correct? <\/strong><\/p>\n a. Fund capital is equivalent to equity capital in investor-owned firms.<\/p>\n b. The sole source of fund capital is the excess of revenues over expenses.<\/p>\n c. Fund capital has a zero opportunity cost.<\/p>\n d. Fund capital can only come from donations.<\/p>\n e. Fund capital does not change over time.<\/p>\n \u00a0<\/p>\n 8. Which of the following statements about a not-for-profit firm\u2019s sources of capital is most correct?<\/strong><\/p>\n a. Since not-for-profit firms are tax exempt, there is no tax advantage to debt capital.<\/p>\n b. Fund capital is obtained by retaining earnings–if all earnings are paid out as dividends, no fund capital is created.<\/p>\n c. Preferred stock is never used by not-for-profit firms.<\/p>\n d. Not-for-profit firms are not allowed to raise capital by borrowing.<\/p>\n e. Not-for-profit firms usually have high dividend payouts.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" 1. The Apex Company has just hired Mr. Smith, who is age 25 and is expected to retire at age 60. Mr. Smith\u2019s current salary\u2026<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10601,10596,10882,479,537,172,478,10597,10599,10595],"tags":[10524,10522,10890,10561,10883,10889,10515,10521,10696,10518,10888,10887,10886,10885,10884,10525],"class_list":["post-127726","post","type-post","status-publish","format-standard","hentry","category-assignment-help-by-uks-no-1-writing-service","category-assignment-writers-canada-university-cost","category-free-ai-english-assignment-writers-china","category-nursing-course-hero","category-nursing-essay-pro","category-nursing-study-bay","category-nursing-study-pool","category-professional-assignment-writers-usa","category-uae-1-cheap-assignment-writing-service","category-write-a-word-essay","tag-apa-citation-format-assignment","tag-assignment-writers-australia-college-student","tag-best-nursing-case-study-writing-services","tag-buy-essay-usa","tag-case-study-nursing-writing-services-for-care-plans","tag-free-nursing-case-study-writing-services","tag-help-write-a-page-assignment","tag-i-need-someone-to-do-my-assignment-within-hours","tag-need-assistance-completing-the-assignment","tag-need-to-write-an-essay","tag-nursing-case-studies-with-answers","tag-nursing-case-study-paper-example","tag-nursing-case-study-template-examples-of-case-studies-nursing","tag-pharmacology-case-study","tag-soap-note-case-study","tag-write-pages"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/127726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=127726"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/127726\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=127726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=127726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=127726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}