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Ace Your CTP AFP Certification Exam

Page: 14 / 34
Question 56

An instrument that gives the right to buy a stated number of shares of common stock at a specified price is known as:

Options:

A.

an equity warrant

B.

a put option

C.

a zero coupon bond

D.

a subordinated debenture

Question 57

A company’s capital structure includes $800,000,000 in total capital, of which $200,000,000 comes from debt. The firm’s after-tax cost of debt is 6%, and its cost of equity is 12%. The marginal tax rate is currently 40%. What is the company’s weighted average cost of capital?

Options:

A.

9.9%

B.

10.3%

C.

10.5%

D.

10.8%

Question 58

What must be measured and monitored to ensure that a company has adequate liquidity?

Options:

A.

Net receivables

B.

Stock price

C.

Short-term borrowing obligations

D.

Net working capital

Question 59

A call option for a company has an exercise price of $50. The stock is currently trading at $60. At maturity, what should an investor who paid $3 for the option do?

Options:

A.

Exercise the option and gain $7.

B.

Exercise the option and gain $10.

C.

Not exercise the option and lose $3.

D.

Not exercise the option and lose $13.

Page: 14 / 34
Exam Code: CTP
Exam Name: Certified Treasury Professional
Last Update: Nov 21, 2024
Questions: 932
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