Chapter3 The Valuation of Long-term Securities

坎贝奇三部曲的英文内容The Cambrian Trilogy is a series of novels that delves into the intricacies of the Cambrian period, a time of significant evolutionary change on Earth. The story is woven with a blend of scientific exploration and imaginative fiction, taking readers on a journey through the ancient seas and the complex ecosystems that thrived during this era.The first book in the trilogy, "The Early Sea," introduces us to a world teeming with new life forms. It describes the emergence of the first multicellular organisms and the birth of complex ecosystems. The narrative is rich with descriptions of the environment, from the depths of the ocean to the shallow waters where life first began to flourish."The Diverse Depths," the second installment, expands on the diversity of life that has begun to take root. It explores the intricate relationships between different species and the challenges they face as they adapt to their surroundings. The book delves into the fascinating world of symbiosis and the beginnings of predator-prey dynamics.The final book, "The Age of Wonders," brings the series to a close with a look at the culmination of the Cambrian explosion. It showcases the incredible variety of life that has developed and the complex interactions that have formed the basis of the ecosystems we know today. The story is atestament to the resilience and adaptability of life on Earth, and it leaves readers with a sense of awe at the wonders of nature.Throughout the trilogy, the author masterfullyintertwines scientific facts with a vivid imagination,creating a world that is both educational and captivating.The Cambrian Trilogy is a celebration of the natural worldand a reminder of the incredible journey life has taken fromits earliest beginnings to the diverse planet we inhabit today.。

tpo32三篇托福阅读TOEFL原文译文题目答案译文背景知识阅读-1 (2)原文 (2)译文 (5)题目 (7)答案 (16)背景知识 (16)阅读-2 (25)原文 (25)译文 (28)题目 (31)答案 (40)背景知识 (41)阅读-3 (49)原文 (49)译文 (53)题目 (55)答案 (63)背景知识 (64)阅读-1原文Plant Colonization①Colonization is one way in which plants can change the ecology of a site.Colonization is a process with two components:invasion and survival.The rate at which a site is colonized by plants depends on both the rate at which individual organisms(seeds,spores,immature or mature individuals)arrive at the site and their success at becoming established and surviving.Success in colonization depends to a great extent on there being a site available for colonization–a safe site where disturbance by fire or by cutting down of trees has either removed competing species or reduced levels of competition and other negative interactions to a level at which the invading species can become established.For a given rate of invasion,colonization of a moist,fertile site is likely to be much more rapid than that of a dry, infertile site because of poor survival on the latter.A fertile,plowed field is rapidly invaded by a large variety of weeds,whereas a neighboring construction site from which the soil has been compacted or removed to expose a coarse,infertile parent material may remain virtually free of vegetation for many months or even years despite receiving the same input of seeds as the plowed field.②Both the rate of invasion and the rate of extinction vary greatly among different plant species.Pioneer species-those that occur only in the earliest stages of colonization-tend to have high rates of invasion because they produce very large numbers of reproductive propagules(seeds,spores,and so on)and because they have an efficient means of dispersal(normally,wind).③If colonizers produce short-lived reproductive propagules,they must produce very large numbers unless they have an efficient means of dispersal to suitable new habitats.Many plants depend on wind for dispersal and produce abundant quantities of small,relatively short-lived seeds to compensate for the fact that wind is not always a reliable means If reaching the appropriate type of habitat.Alternative strategies have evolved in some plants,such as those that produce fewer but larger seeds that are dispersed to suitable sites by birds or small mammals or those that produce long-lived seeds.Many forest plants seem to exhibit the latter adaptation,and viable seeds of pioneer species can be found in large numbers on some forest floors. For example,as many as1,125viable seeds per square meter were found in a100-year-old Douglas fir/western hemlock forest in coastal British Columbia.Nearly all the seeds that had germinated from this seed bank were from pioneer species.The rapid colonization of such sites after disturbance is undoubtedly in part a reflection of the largeseed band on the forest floor.④An adaptation that is well developed in colonizing species is a high degree of variation in germination(the beginning of a seed’s growth). Seeds of a given species exhibit a wide range of germination dates, increasing the probability that at least some of the seeds will germinate during a period of favorable environmental conditions.This is particularly important for species that colonize an environment where there is no existing vegetation to ameliorate climatic extremes and in which there may be great climatic diversity.⑤Species succession in plant communities,i.e.,the temporal sequence of appearance and disappearance of species is dependent on events occurring at different stages in the life history of a species. Variation in rates of invasion and growth plays an important role in determining patterns of succession,especially secondary succession. The species that are first to colonize a site are those that produce abundant seed that is distributed successfully to new sites.Such species generally grow rapidly and quickly dominate new sites, excluding other species with lower invasion and growth rates.The first community that occupies a disturbed area therefore may be composed of specie with the highest rate of invasion,whereas the community of the subsequent stage may consist of plants with similar survival ratesbut lower invasion rates.译文植物定居①定居是植物改变一个地点生态环境的一种方式。

2013年对外经济贸易大学815经济学综合考研真题详解跨考网独家整理最全经济学考研真题资料库，您可以在这里查阅历年经济学考研真题，经济学考研资料，经济学参考书等内容，更有跨考考研历年辅导的经济学学哥学姐的经济学考研经验，从前辈中获得的经验对初学者来说是宝贵的财富，这或许能帮你少走弯路，躲开一些陷阱。

以下内容为跨考网独家整理，如您还需更多考研资料，可选择经济学一对一在线咨询进行解答。

一、单项选择（每小题1分，共10分）1．纳什均衡之所以稳定是因为（ ）。

A ．它们包含着占优策略B ．它们包含着常和博弈C ．它们发生于非合作博弈之中D ．一旦均衡策略被选定，没有局中人有动力单方面偏离纳什均衡【答案】D【解析】纳什均衡是一组满足给定对手的行为时各参与者所做的是它所能做的最好的策略或行为。

由于各参与者没有偏离它的纳什策略的激励，因此这种策略是稳定的。

2．假设六个工人的平均产量是15。

如果第七个工人的边际产量是18，则（ ）。

A ．边际产量上升了B ．边际产量下降了C ．平均产量上升了D ．平均产量下降了【答案】C【解析】由边际产量和平均产量的关系可知，只要边际产量大于平均产量，平均产量上升；只要边际产量小于平均产量，平均产量下降。

由于第七个工人的边际产量大于前六个人的平均产量，因此七个人的平均产量上升。

已知条件只知道前六个人的平均产量，而不知其边际产量，故边际产量的升降无法判断。

3．如果边际消费倾向MPC 为0.8，税收为定量税，则以下措施中使收入水平降低最多的是（ ）。

A ．增加税收100B ．增加税收100，同时设法使MPC 上升到0.85C ．减少政府购买100D ．减少转移支付50，同时设法使MPC 上升到0.9【答案】B【解析】由三部门乘数可知，在定量税下，政府购买乘数为11G k MPC =-，税收乘数为1T MPC k MPC -=-，转移支付乘数为1TR MPC k MPC=-。

A 项，只增加税收100，此时国民收入变化量为0.810010040010.8T Y k -∆=⨯=⨯=--；B 项，增加税收100，同时也设法使MPC 上升到0.85，此时国民收入0.85100100566.710.85T Y k -∆=⨯=⨯=--；C 项，减少政府购买100，国民收入110010050010.8G Y k ∆=⨯=-⨯=--；D 项，减少转移支付50，同时设法使MPC 上升到0.9，此时国民收入0.9505045010.9TR Y k ∆=-⨯=-⨯=--。

从《哈克贝利费恩历险记》看马克吐温的写作风格Analysis of the Writing Styles of Mark Twain in the Adventures of Huckleberry Finn从《哈克贝利??费恩历险记》看马克??吐温的写作风格Analysis of the Writing Styles of Mark Twainin the Adventures of Huckleberry FinnAbstractMark Twain, father of modern American literature, is an outstanding representative of American writers of realism in the nineteenth century. He is both a master of humor and a great novelist and establishes a new milestone for America and the world in the field of literature. As the masterpiece of Mark Twain, The Adventures of Huckleberry Finn marks the cli of Twain’s literary creativity. Hemingway once described the novel the one book from which “all modern American literature comes.” For more than one century, this novel has been listed in the canon of great novels. Works and articles of criticism on this novel have been numerous.On the textual analysis of The Adventures of Huckleberry Finn, this paper is intended to study the writing Styles of Mark Twain. In this novel, one of the most successful writing styles is a combination of colloquial language and satire. At the same time, the novel is also noted for itsunpretentious, poetic style, wide-ranging humor, and its universally shared dream of perfect innocence and freedom. All these writing styles have been analyzed in this paper.Key Words：Mark Twain; The Adventures of Huckleberry Finn; the writing styles内容摘要马克??吐温（1835―1910）是美国十九世纪伟大的作家，也是美国现实主义文学的杰出代表。

cHAPTra KI betUrM M«4duxn«x<^ ar ••••• f«g ・t plM OM<a to MB ll ・—TL —▼rMdV — ■ M 9•&・ Mtw«aH 叩■厂 1—、M»A-l S*2*0«M ■■ ^7521 1*4SeM 0|«tc4WB* ap*w ^«K « <* o az «•«!io •e ・fOMHVu ・w« Aft. xW*・9«v MBMk t» W*»|w «WM !•«•••— %-V> K ・9. ■・•( •*©> T-»» ■.空竺J 马A 空兰.…计•A SK<•4 «>A7・・1・•・R ・08*・5ZE 11*.F<<O<MI4WV ■❷•waw JttM <«•<«■■ J ・I9H74・ MrtMyiiPH—W ・(VAlw«・・，•■■■>•・" M «M 4 MI « E f R —W •字•字）vfViurutMjnr^vMtai 111 A —i"・^«hW —WI4»••一 y wt 卯 v >•*♦ *» <wr* 戸 x« tv•I Mt «wM ■*■<> «W ■・vfl !• mtvwvF k» VKM »> t»l • p< c» IW Mk vtt»•••• MM• tl»>■斗・4r.•丄防| n*kw !•*J M **vWatAM)' H MB*・朴・卜:卞”・ 4tJJ• Mm K -W ・ r ・Q.・ 9-QS.M > T-«» ・4CMP»c»to« A ■a0>■!«<•(■・•《 Mkwtaa 血”•>« «WE>y«»«vP • IF —・••—■—■科M4_ <tl ・oaMalWMi .11创n 11MM ■— 一A""・v«r■n«^»a w'«•!•<.•..»■ •> i- a-k>―初|・(« _F0R »*i!<■<■« i ・9” ■*!•«••«・》MM E ・》*k>e« —«E.r ■MIC ■一* »» ■•• ”・$«s» •• ts. no ¥ wr ■5— wK ・・«■•*・•••■•••・•••• *♦"■・••••・”•・•・~•l*« f*ASK"*""b QU ，,•・"♦(■* rI・・t ・K •WR XVIM •一刪・0|«・・・<||"• 8K kfk •■>•••<• ■…m»«*w<WH ” IK* lMW«IM iewr mu ■・—A« 巧 ki j«"U >• >^*10* t••<!•.»<»• ••••(■a * 、・r R if 。

Fundamentals of Financial ManagementEleventh Edition SOLUTIONS TO PROBLEMSCONTENTSCHAPTER4 The Valuation of Long-Term Securities CHAPTER5Risk and ReturnCHAPTER15Required Returns and the Cost of Capital CHAPTER16Operating and Financial Leverage CHAPTER17Capital Structure DeterminationCHAPTER18Dividend PolicyCHAPTER41. Price per bond $907.102. Price per bond $904.303. Current price: p0=$80.00Later price: p0=$66.67The price drops by $13.334. Rate of return = 20%5. Present value of stock V=$22.636. a) $37.5b) $30.00c) $37.50Either the present strategy (a) or strategy (c) both result in the same market price per share.7. a) 8 percentb) YTC= 9.64 percentwe solve for YTC by computer8. V=$759. V=$689.4110. a) g = 0.05b) expected dividend yield = 0.07c) expected capital gains yield =g= 0.0511. a) semiannual yield = 0.0402b) 0.0804c) effective annual yield = 0.082012. a) trying a 4 percent semiannual YTM as a starting point for a trial-and-error approach, we getP0 = $ 1,067.55Since $1,067.55 is less than $1,120, we need to try a lower discount rate, say 3 percentP0 = $ 1,223.47To approximate the actual discount rate, we interpolate between 3 and 4 percent,X =0.0066In addition, semiannual YTM= 0.03 +0.0066 = 0.0366, or 3.66 percent. (The use of a computer provides a precise semiannual YTM figure of 3.64 percent.)b) semiannual YTM * 2 = nominal YTMnominal YTM = 0.0732C) effective annual YTM = 0.075413. a) old Chicago’s 12-year bonds should show a greater price change than Red Frog’s bonds. With everything, the same except for maturity, the longer the maturity, the greater the price fluctuation associated with a given change in market required return. The closer in time that you are to the relatively large maturity value being realized, the less important are interest payments in determining the market price, and the less important is a change in market required return on the market price of the security.b) Red Frog:P0 = $1,041Old Chicago:P0 = $1,086.14Old Chicago’s price per bond changes by ($1,086.14-$1,000=$86.14, while Red Frog’s price per bond changes by less than half that amount, or ($1,041-$$1,000) =$4114. a) $36.67b) $31.14c) $44.40CHAPTER 51. a) The standard deviation is 11.36%b) There is a 30 percent probability that the actual return will be zero (prob. E(R) =0 Is 20%) or less (prob. E(R) < is 10%)also, by inspection we see that the distribution is skewed to the left.2. a) For a return that will be zero or less, standardizing the deviation from the expected value of return we obtain (0%-20%)/15%=-1.333 standard deviations. Turning to Table V at the back of the book, 1.333 falls between standard deviations of 1.30 and 1.35. These standard deviations correspond to areas under the curve of 0.0968 and 0.0885 respectively. This means that there is approximately a 9% probability that actual return will be zero or less. (Interpolating for 1.333, we find the probability to be 9.13%)b) 10 percent: Standardized deviation (10%-20%)/15%= -0.667.probability of 10 percent or less return = (approx.) 25 percent.Probability of 10 percent or more return =75 percent.20 percent: 50 percent probability of return being above 20 percent.30 percent: standardized deviation = (30%-20%)/15%=0.667. Probability f 30 percent or more return = (approx.) 25 percent.40 percent: standardized deviation = 1.333probability of 40 percent or more return= (approx.) 9 percent50 percent: Standardized deviation =2.00Probability of 50 percent or more return = 2.28 percent3. The beta is approximately 0.5. This indicates that excess returns for the stock fluctuate less than excess returns for the market portfolio. The stock has much less systematic risk than the market asa whole. It would be a defensive investment.4. Req. (R A) =0.16Req. (R B ) =0.13Req. (R C ) =0.106Req. (R D ) =0.190Req. (R E) =0.1485. Expected return =0.15387. a) Selena’s expected return is 0.1602.b) The expected return on Selena’s portfolio increases to 16.82 percent, because the additional funds are invested in the highest expected return stock.8. Required return =0.154Assuming that the perpetual dividend growth model is appropriate, we get V=$45.459. A) the beta of a portfolio is simply a weighted average of the betas of the individual securities that make up the portfolio.The portfolio beta is 1.115b) Expected portfolio return = 14.69% or 0.1469Solution to Appendix A problem10. E (Rp) =0.121The standard deviation of the portfolio equals to 0.00856Chapter 15Thus, K0 = Ki B/(B+S)+ Ke S/(B+S)2. Ki =8.4 percentKe = 18.14 percentK0 = 15.22 percent3. (January 20x1) K e =21 percent(January 20x2) P0=$57.54. Ke = 12.24 percentFlotation costs of stock = $30,000Total Flotation cost = 34,000NPV= $90,000/0.145-$600,000-$34,000 = -$13,310The proposal should be rejected. Without flotation costs, however, the net present value would have been positive and the proposal acceptable.7. a) cost of equity = 19.68 percentCost of debt = 8 percentWeighted-average required return for the project = 15 percentb) The approach assumes that unsystematic risk is not a factor of importance, which may or may not be the case. It assumes also that the average beta for the oil drilling equipment companies is a good surrogate for the systematic risk of the prospect. Finally, the estimates of the likely return on stocks in general and of the risk-free rate must be accurate. If these assumptions hold, the figure obtained will be a realistic estimate of the project’s required rate of return.8. a) Required Return =15.5 percentb) Minimum Required Return = 15 percentMaximum Required Return = 17 percentc) Expected value of required rate of return = 15.85 percent9. Using the RADR approach we would calculate the project’s net present value at theproject’s IRR and compare it to the RADR, which we would use as a hurdle rate. In this case, the project’s IRR of 13.17 percent is less than the RADR of 15 percent, so we would , once again, reject the project.Solution to Appendix A Problem:11.a. Adjusted beta of 1.45 is appropriate for the new venture if the assumptions of the capital-asset pricing model hold, except for corporate taxes.b. K0= 14.6 percentSolution to Appendix B Problem12. a) APV= $7,550The project is acceptable.b) APV =$180The project is acceptable. ----BUT , barely.Chapter 161. a) FC=$180,000b) Q BE = 3,600 unitsS BE = $ 720,000c) DOL 4,000units =10.DOL 4,400units = 5.5DOL 4,800units = 4.0DOL 5,200units = 3.25DOL 5,600units = 2.8DOL 6,000units = 2.52. a) Q BE = 1,800 unitsb) Q BE = 3,200 unitsc) Q BE = 4,000 units3. a) Q BE = 15 horsesb) EBIT = $ 2,000b.The intercepts on the horizontal axis for the four plans are $0, $240,000, $400,000 and $700,000 respectively.c. Plan #1 dominates up to $800,000 in EBIT, Plan #3 from $800,000 to $1,150,000 in EBIT, and Plan #4 after $1,150,000 in EBIT. The best plan depends upon the likely level of EBIT and the likelihood of falling below an indifference point.5. EPS of present Capital structure , plan #1, plan#2, plan#3, plan#4 is $4.40, $2.93,$3.20,$2.30,$3.04, respectively. (ooo omitted)EBIT 1,2=840,000 Above 840,000 in EBIT , debt is more favorable ; below 840,000 in EBIT, common stock is more favorable.EBIT 1,3=1,380,000 Above 1,380,000 in EBIT, Plan 3 is more favorable; below it plan 1 is more favorable.EBIT1,4=840,000 ,Above it in EBIT Plan 4 is more favorable; below 840,000 plan 1 is more favorable.For plan 2 versus plan 3 comparison , the bond alternative dominates the preferred alternative by $0.9 per share throughout all levels of EBIT.For the Plan 2 versus plan 4 comparison, the indifference point is again $840,000 in EBIT.For the plan3 versus plan4 comparison, the indifference point is 1,740,000.6.a) The level of expected EBIT is only moderately above the indifference point of 840,000. Moreover, the variance of possible outcomes is great and there is considerable probability that the actual EBIT will be below the indifference point. A two-thirds probability corresponds to one standard deviation on either side of the mean of a normal distribution. If the distribution is approximately normal, the standardized difference from the mean to the indifference point is -0.4 looking at a normal distribution table found in most any statistics text, we find that this corresponds to a 34.5 percent probability that actual EBIT will be below 840,000. while the choice of alternatives depends upon one’s risk preferences, the level and variability of EBIT point to the “all-common stock” alternative.b) Here the level of expected EBIT is significantly above the indifference point and the variability is less. IF the distribution is approximately normal ,. The standardized difference from the mean to the indifference point is -3.3the probability of actual EBIT falling below the indifference point is negligible . The situation in this case favors the all bond alternative.7. (000 omitted)a) EPS for common \ debt \ preferred is $2.5 、$2.75、$2.62 respectivelyb) EPS for common \ debt \ preferred is $1.06、$0.98、$0.85 respectively ( EBIT =3 million)EPS for common \ debt \ preferred is $1.54、$1.57、$1.44 respectively ( EBIT =4 million) EPS for common \ debt \ preferred is $3.47、$3.93、$3.80 respectively( EBIT =8 million) c) EPS for common \ debt \ preferred is $2.08、$2.28、$2.10 respectivelyEPS for common \ debt \ preferred is $2.50、$2.84、$2.75 respectivelyEPS for common \ debt \ preferred is $2.76、$2.75、$2.62 respectively8. Boehm-GAO : Interest Coverage= 3.13Debt-service = 1.01Northern California: Interest Coverage= 2.22Debt-service = 1.00The question of with which company one feels more comfortable depends on the business risk Inasmuch as an electric utility has stable cash flows and Northern California is large. THE fact that the debt service coverage ratio is 1.0 means that some of the debt will probably have to be renewed or “ rolled over” at maturity. However, this is typical for an electric utility.The supermarket is likely to have the highest portion of total debt in the form of accounts payable, a short-term liability, because purchases make up a large portion of total costs. Therefore, we would expect it to have the greatest disparity between the two debt ratios. The airline would be expected to have the highest debt ratio, most of which is long-term debt used to finance aircraft. Here the ratio of total debt to total assets is slightly less than the ratio of long- term debt to total capitalization. An apparel maker will have a sizeable amount of accounts payable , but will also have some long-term debt used to finance fixed assets. Finally, the chemical company is determined largely by elimination. Such a company has current liabilities, but relies heavily on long-term debt to finance fixed assets.CHAPTER 171. A) Total value of firm: $ 88,800,000Implied overall capitalization rate: 0.1126126b) Total value of the firm: $88,800,000Implied overall capitalization rate: 0.134352. a) 1) sell your Gottahave stock for $22,500.2) Borrow $20,000 at 12 percent interest. This personal debt is equal to 1 percent of Gottahave debt.3) Buy 1 percent of the stock of the Wannabee Company for $40,000 and still have $22,500 +$20, 00-$40,000= $ 2,500 left over for other investments.Return on investment in Wannabee $6,000Less: interest paid $2,400Net return: $3,600Your net dollar return $3,600, is the same as it was for your investment in Gottahave. However, your personal cash outlay of $20,000($40,000 less personal borrowings of $20,000) is $2,500 less than your previous $22,500 investment in Gottahave.b) When there is no further opportunity for employing fewer funds and achieving the same total dollar return the arbitrage process will cease. At this point, the total value of the two firms must be the same, as must their average costs of capital.3. a) $400,000 in debt. The market price per share of common stock is highest at this amount of financial leverage.b) Omittedc) Yes, The optimal capita structure – the one possessing the lowest overall cost of capital --- involves $400,000 in debt.b) $ 1,200,000c) Value of all-equity financed firm = 3,000,000V alue of recapitalized firm = $4,200,0005. The optimal amount of debt would be $5 million6. a) Without bankruptcy cost, the optimal capital structure is 40% equity when K0 = 0.091b) With bankruptcy cost, the optimal capital structure is 60% equity when K0 = 0.0967. According to the notion of asymmetric information between management and investors, the company should issue the overvalued security, or at least the one that is not undervalued in its mind. This would be debt in the situation described in the problem. Investors would be aware of management’s likely behavior and would view the event as” good news.” The stock price might rise, all other things the same, if this information was not otherwise conveyed.In contrast, if the common stock were believed to be overvalued, management would want to issue common stock. This assumes it wishes to maximize the wealth of existing stockholders. Investors would regard this announcement as “bad news,”and the stock price might decline. Information effects through financing assume that the information is not otherwise known by the market Management usually has a bias in thinking that the common stock of the company is undervalued.CHAPTER 182. a) Dividends =$500,000b) Dividends =0c) Dividends =0 Company should raise an additional $1 million through a new issue of common stock if a capital budgeting analysis ( in which flotation costs are treated as outlays) proves favorable.3. a) Low dividend-payout ratio. Highly taxed owners will probably want to realize their returns through capital gains.b) Low dividend-payout ratio. There will be no residual funds.c) Medium or high dividend-payout ratio. There are likely to be funds left over after funding capital expenditures. Moreover, the liquidity and access to borrowing give the company considerable financial flexibility.d) Medium or high dividend-payout ratio. Unless the company cuts its dividend, which probably is unlikely in the short run, its dividend-payout ratio will rise with the drop in earnings.e) Low dividend-payout ratio. The company will probably wish to retain earnings to build its financial strength in order to offset the high business risk.4. We would expect Jumbo to have the higher dividend-payout ratio. As a percent of expectedJumbo has a lower relative standard deviation of cash flow, lower relative capital expenditures, lower relative long-term debt, and greater relative unused bank lines. Its expected capital expenditures are less than its expected cash flow, which would imply residual funds, whereas the opposite occurs for Giant. Finally, Giant has a higher cost associated with floating common stock in order to replace dividends than dos Jumbo. For all of these reasons, we would expect Jumbo to have a higher dividend payout. The only factor working in the other direction is the fact that Giant has a higher relative as well as absolute level of liquidity.5. a) The market seems to evaluate both of these stocks in terms of dividend payments. The average dividend for both firms is approximately the same. Nevertheless, the average market price of Harpo ( about $ 4.38) has been about 13% higher than the average market price for Oprah ( about $3.88) The market has capitalized the dividends of Oprah at a higher rate than Harpo, hence giving the stock of Oprah a lower price. This might result from the constant dividend-payout ratio policy of Oprah, which has produced a volatile dividend stream.b) Neither of these companies seems to be a growth company. In fact, one would wonder whether the retention of earnings is justified for either company. Since both of these firms appear to be evaluated in terms of dividend yield, increased stock prices might ensue from higher dividend payouts.6. a) $50b) 200 sharesc) $40d) Before: $8,000After: $8,000The stock dividend in itself does not affect the value of the company.e) The stock dividend would likely to be regarded as a positive signal and the total value of your holdings would increase.b) $0.3; $ 0.15c) $ 0.2913 $0.1456d) $4.854c.9. a) 27,778 sharesb) If taxes are ignored, it should make little difference other than perhaps if there is a difference in the information content of cash dividends and the information content of the repurchase of stock.c) Taxes create an incentive for repurchase, for the reasons illustrated in the chapter; however, the Internal Revenue Service will challenge a steady program of repurchase in lieu of dividends.。

1. Define the “International Accounting” and explain its content.(1)Definition of International Accounting：Accounting is a branch of applied economics that provides information about business and financial transactions. International accounting is distinct because the information concerns a multinational enterprise(MNE) with foreign operations and transactions, or the users of the information are in a different domicile than the reporting entity.(2)Content of international accounting:①Comparison of accounting standards②Accounting harmonization or convergence③International financial accounting④International managerial accounting⑤International auditing2. Explain the effect factors of accounting development. Which factors are the most important for Chinese accounting development? Which factors are the least important for Chinese accounting development?Effect factors:(1)Source of finance: In countries where bank dominates source of finance, accounting focuses on creditor protection through conservative accounting measurements.(2)Legal system: The legal system determines how individuals and institutions interact.(3)Taxation: In many countries, tax legislation effectively determines accounting standards(4)Political and economic ties: Accounting ideas and technologies are transferred through conquest, commerce, and similar forces.(5)Inflation: Inflation distorts historical cost accounting and affects the tendency ofa country to incorporate price changes into the accounts.(6)Level of economic development: The factor affects the types of business transactions conducted in an economy.(7)Education level: In countries with developed education, concerns for accounting information is high.(8)Culture: Culture means the values and attitudes shared by a society.Most and least important:(1)China is trying to develop accounting standards that are understandable to the outside world. The model is International Financial Reporting Standards in order to attract outside investors that are vital to the makeover of China’s economy.(2) Thus the anticipatory effect of sources of finance is probably the most significant factor influencing the development of accounting today.(3) Political and economic ties are probably the least important factor in the case of China. China’s economy has been insular until recently. Even now, imports and exports as a percentage of gross domestic product are low (see Table 4.1). Thus, there is no significant influence from one particular trading partner, nor is there any colonial legacy.3. Distinguish fair presentation and compliance accounting.(1)Fair presentation:①It emphasizes substance over form and is oriented toward the decision needs of external investors.②It is capital markets oriented.③It is associated with common law countries(2)Legal compliance accounting:①It is designed to satisfy government-imposed requirements such as calculating taxable income or complying with the national government’s macroeconomic plan.②legal compliance accounting is associated with code law countries.(3) A third model is the inflation-adjusted model. It is essentially an add-on to one of the other two models in some countries with high inflation.4. The U.K and the U.S have a common accounting heritage and are linked by history and language. Anglo-American accounting is a term sometimes used to denote their accounting styles, which are similar in orientation, purpose, and approach. Yet accounting differences still exist between these two countries.Required:Identify the major differences between U.K and U.S accounting.The U.K The U.SGoodwill Capitalize & amortize Capitalize & impairmenttestedAsset valuation Historical & current cost Historical costLIFO Not acceptable usedsome noReserves for incomesmoothing(1)The two major areas of difference are asset valuation and accounting for goodwill.①In the U.K., assets may be valued at historical cost, current cost, or a mixture of the two. When fixed assets are revalued, depreciation and amortization must be calculated using the revalued amounts. Only historical cost is allowed in the U.S.②In the U.K., goodwill can be impairments tested, as in the U.S., but may also be amortized over 20 years or less.(2)Other differences between U.K. and U.S. GAAP relate to LIFO and the calculation of long-term deferred taxes.①LIFO is rarely used in the U.K., but is relatively more common in the U.S.②In the U.K., long-term deferred taxes may be valued at discounted present value.(3)Finally, the chapter mentions that opportunities for income smoothing are probably greater in the U.K. than in the U.S.5. To depict the most novel feature of the Dutch accounting scene.①The most novel feature of the Dutch accounting scene is the Enterprise Chamber of the Court of Justice of Amsterdam.②The Dutch Enterprise Chamber of the Court of Justice of Amsterdam helps ensure that filed or published Dutch financial statements conform to all applicable laws.③The Enterprise Chamber carries out its mission by determining whether the allegations of deficient financial reporting are true and how material such deficiencies are.④The Chamber is composed of three judges and two Dutch RAs. There is no jury. Appeals of any of the Chambers’ rulings are difficult, may only be lodged with the Dutch Supreme Court, and are restricted to points of law.⑤Three examples of Dutch flexibility in financial reporting are (a) financial statements can be in one of several languages, (b) companies may use historical cost or current costs, and (c) Council on Annual Reporting guidelines are recommendations only.⑥It has relatively permissive statutory accounting and financial reporting requirements but very high professional practice standards. It is a code law country, yet accounting is oriented toward fair presentation. The fairness orientation developed without a strong stock market influence. Financial reporting and tax accounting are two separate activities.6. In 1967, Gerhard Mueller proposed the developmental patterns. There are macroeconomic pattern, microeconomic pattern, Independent discipline approach and the uniform accounting approach respectively.The four patterns of accounting development still are valid today? Why or why not?The four patterns of accounting development are still valid today.Reasons:①The description of accounting for the respective exemplar countries is stillbroadly true.②The Netherlands is really the only country that can be described by the microeconomic pattern.③There are also only a few countries like Sweden that follow the macroeconomic pattern.④The independent discipline approach is not as ad hoc as it was in 1967. Most of these countries now have conceptual frameworks to guide accounting policy formulation.⑤The uniform accounting approach may break down as more and more countries privatize their economies.7. Accounting and auditing standard setting in Taiwan is patterned after that in theU.S.A. What are the similarities and differences in standard setting in the two? Similarities:(1) Accounting and auditing standard setting is a private sector activity in both Taiwan and the USA.(2)The ARDF in Taiwan and the FAF in the USA have the same oversight responsibilities for standard setting.(3)The FASC in Taiwan determines accounting standards like the FASB in theUSA.(4)A due process procedure is followed by both bodies and exposure drafts and outside opinions are solicited before a final pronouncement is issued.(5)The ASC in Taiwan uses the same process as the FASC in the USA. Differences:(1)The ARDF in Taiwan is supervised by the Ministry of Finance, but there is no comparable oversight of the FAF by a U.S government agency.(2)The ARDF in Taiwan has oversight responsibility for both accounting and auditing standard setting. However, in the USA, the FAF is responsible for accounting standards while PCAOB is responsible for auditing standards.8. What should be included in the disclosure of forward-looking information?①Forecasts of revenues, income(loss),earnings(loss) per share(EPS),capital expenditures and other financial items.②Prospective information about future economic performance or position .③Statements of management’s plans and objectives for future operations.9. Why do managers have incentives to disclose information voluntarily and how to avoid managers’ negative effect?(1)Reasons:①Voluntary disclosure are forthcoming when corporations are competing forfinance from investors, especially in a cross-border context.②Voluntary disclosure have many other benefits for the corporation. For example, Lower transaction costs in the trading of the firm’s securities; Greater interest in the company by financial analysts and investors; Increased share liquidity; Lower cost of capital.③ Delay the disclosure of adverse news, “manage” their financial reports to conveya more positive image of the firm, and overstate their firms’ financial performance and prospects.(2)Solution:①regulation such as accounting and disclosure regulation②third-party certificate such as auditing.10. What evidence is there that International Accounting Standard are becomingwidely accepted around the world?①Growing numbers of companies are adopting IFRS voluntarily and refer to theiruse of IFRS in their annual reports.②Dozens of countries base their national accounting standards on IFRS.③Many international organizations, such as IOSCO, endorse the use of IFRS.④IFRS are used as an international benchmark in many major industrialized countries.⑤IFRS are accepted by many stock exchanges and securities regulators.⑥IFRS are recognized by the European Commission (EC) and other supranational bodies.⑦Norwalk Agreement committed FASB and IASB to convergence.11. Discuss the special features for accounting standards setting, regulation and enforcement, financial reporting, and measurement in China.①Accounting standard setting is a government activity in China. The purpose of accounting was to serve the needs of the state for economic planning and control. A uniform set of standardized accounts was developed. The recent economic reforms enable accounting standards to reflect this new reality.②The China Accounting Standards Committee is the authoritative body within the Ministry of Finance responsible for developing accounting standards. The ChinaSecurities Regulatory Committee is the government agency that regulates China’s two stock exchanges. The CSRC is also responsible for enforcing financial reporting for listed companies.③Financial reporting is frequent and detailed. The main feature is a fund-management orientation where funds meant the property, goods, and materials used in the production process. Financial reporting emphasize the balance sheet.④China is likely moving toward fair presentation oriented accounting by adopting IFRS as Chinese GAAP. Despite adopting fair presentation principles, one can question whether the Chinese achieve it in application. There is an acute shortage of trained accountants in China and the profession remains undeveloped.12. Compare and contrast features of the major foreign currency translation methods which are current exchange rate method, and temporal method. Which method do you think is best? Why ?Current Rate Method(1)Advantages:①Retains the initial relationships in the foreign currency statements.②Simple to apply.(2)Limitations:②Violates the basic purpose of consolidation, which is to present the results of a parent and its subsidiaries as if they were a single entity.②Inconsistent with historical cost.③Presumes that all local assets and liabilities are subject to exchange risk. While stockholders’ equity adjustments shield an MNE’s bottom line from translation gains and losses, such adjustments could distort certain financial ratios and be confusing. Temporal Method(1)Advantages:①Theoretically valid: compatible with any accounting measurement method.②Has the effect of translating foreign subsidiaries operations as if they were originally transacted in the home currency, which is desirable for foreign operations that are extensions of the parent’s activities.(2)Limitation:A company increases its earnings volatility by recognizing translation gains and losses currently.Which is best:①There is probably no one translation method that is appropriate for allcircumstances in which translations occur and for all purposes that translation serves.②It is probably more fruitful to identify circumstances in which they think one translation method is more appropriate than another.13. What are features of FASB 52?(1) FASB 52 introduces a concept of functional currency.(2) Translation when the parent currency is functional.①Foreign currency financial statements remeasured to reporting currency using the temporal method.②Translation gains and losses resulting from the translation process are included in current income.(3)Translation when the local currency is functional.①Foreign currency financial statements translated to reporting currency using the current rate method.②Translation gains and losses disclosed as a separate component of consolidated equity.14. For three approaches that are international accounting standard, mutual recognition, and reconciliation, what do you expect is the preferred approach from the perspective of investors, company management, and regulatory authorities?(1)One of the main problems with mutual recognition: To make financial statements within the home market non-comparable(2)Reconciliation:①The United States SEC considers reconciliation to be a cost-effective means②significant differences between domestic and foreign accounting principles can increase the burdens③reconciliations do not provide a full picture of the enterprise(3) The use of International Financial Reporting Standards would provide many benefits for cross-border listings.①Investors might prefer international standards.②Company management might prefer mutual recognition.③Regulatory authorities might prefer reconciliation.15. From a user’s perspective, what is the inherent problem in attempting to analyze historical cost-based financial statements of a company domiciled in an inflationary, devaluation-prone country? （不考）①Historical-based financial statements may be misleading during periods of significant inflation.②Many resources may have been acquired in periods when the purchasing power of the monetary unit was much higher. These expenses then typically are deducted from revenues that reflect current purchasing power. The resulting income number is unintelligible.③Another problem for statement readers is that the value of assets recorded at their historical acquisition cost is typically understated as a result of inflation. Understated asset values produce understated expenses and overstated earnings.④Financial trends are also difficult to interpret, as trend statistics generally include monetary units of different purchasing power.⑤A positive trend in sales may be due to price changes, not real increases in sales.16. Describe the four steps of Business Analysis Framework.①Business strategy analysis: A qualitative understanding of a company, its competitor, and its economic environment that ensures that quantitative analysis is based on reality.②Accounting analysis: To assess the extent to which a firm’s accounting amounts reflect economic reality.③Financial analysis: To evaluate a firm’s current and past performance, and to judge whether its performance can be sustained.④Prospective analysis: It involves into forecasting a firm’s prospects based on an assessment of a firm’s business strategy, accounting policy, and its financial analysis, and arriving at an estimate of the firm’s value.。