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The present value of Megalith's forecast future cash flows is now $267 million. What will happen to this value if Megalith plc's cost of equity rises?

A. It will rise
B. It will fall
C. It will remain the same
D. It is impossible to say

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In the last financial year, a company made $200 million profit from operations, before deducting interest charges of $10 million and tax liabilities of $55 million. Its capital employed was $800 million, consisting of debt of $80 million and equity of $720 million. What was the company's return on capital employed (ROCE) for the last financial year?

A. 16.9%
B. 18.1%
C. 23.8%
D. 25.0%

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XYZ Co's shareholders require a constant dividend payment of $2 per share. If the required rate of return has increased from 8% to 10%, how much has the value of the shares fallen by?

A. 5%
B. 10%
C. 15%
D. 20%

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Which of the following will lead to a rise in the required rate of return (ie the minimum return the investor would want in return for investing in a firm's shares)?

A reduction in a company's gearing ratio
B. Poorer outlook for business in general
C. A fall in the general level of interest rates
D. The firm adopts less risky business strategies

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Which of the following is most likely to lead to a rise in the price of a firm's shares?

A fall in the level of interest rates in the country
B. The bankruptcy of one or more of its rivals due to tough times in the industry
C. Increased borrowing by the firm
D. A fall in the firm's EPS

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The present value of Megalith's forecast future cash flows is now $267 million. What will happen to this value if Megalith plc's cost of equity rises?

A. It will rise B. It will fall C. It will remain the same D. It is impossible to say

XYZ Co's shareholders require a constant dividend payment of $2 per share. If the required rate of return has increased from 8% to 10%, how much has the value of the shares fallen by?

Which of the following will lead to a rise in the required rate of return (ie the minimum return the investor would want in return for investing in a firm's shares)?

Which of the following is most likely to lead to a rise in the price of a firm's shares?

A. It will rise
B. It will fall
C. It will remain the same
D. It is impossible to say