In order to assure that you are prepared for the Final Exam, I have been reviewing almost 50 questions for clear wording, sufficient information and correct answers. Most importantly, I wanted to make sure we have covered in class the relevant financial concepts and applications to enable you to respond appropriately. Although I did not generate the Final Exam, I took the liberty of making a few changes in the questions when absolutely necessary.
If you stayed to the end of our last class, you have already benefited from my review of the last 3 charts I had added to the Lecture for Week 5, covering “MM Extension Theory” for levered and unlevered firms with growth. Please note the appropriate discount rate rTS is the unlevered cost of equity rsu, which will come up again in this week’s material on mergers and valuation.
Bond refunding decisions might appear, either with flotation cost expressed as a percentage of face value or with annual flotation cost tax savings, which will be handled similarly to our treatment of annual post-tax interest savings.
I have also added a few charts to the Lectures for Weeks 6 and 7, and have earlier today updated their files in Doc Sharing.
The Final Exam, to be taken online, will be open on either Sunday, October 27 or Monday, October 28, to be determined, from 1 PM until 11:30 PM. You will have 4 hours [not 3] and 30 minutes to answer 12 short-answer questions worth 20 points each, for a total of 240 points. They appear on 3 separate pages under Week 8 in eCollege. Please do not stop and submit after completing the first page of the exam. The exam is comprehensive and covers Chapters 8, 14, 15, 17-23, 25, and 26; Weeks 1-7 content; and all course TCOs.
The 12 questions you will encounter come from a pool of questions. While you will encounter the same 12 topics, the questions may be different and might appear in a different order. None of the questions are proper essay-type questions, requiring you to compose a one-sentence response; rather, you will have to select one of the sentences offered as most appropriate.
I will grade the online Final Exam, but it is important for you to include a bit of backup for some quantitative questions, possibly an equation, calculation or inputs to your calculator, supplementing just the final number requested. With only the numerical answer, I cannot provide part credit. The questions are structured like those in the Quizzes, with 5 answers from which to select.
However, you must check your progress in entering material against your clock to make certain you will complete the entire exam during the 4 hours and 30 minutes. While you are all veteran exam takers, a suggested approach is to perform preliminary calculations on a piece of paper or in Excel or a calculator, enter the answers required (both numerical and short sentences) and then enter backup material, time permitting. Also, please Save your answers frequently before the final submission.
Please understand that there are no retakes or second entries into the Final Exam and it must be taken on the day and during the time agreed upon (see above). You must dedicate the time span with no personal interruptions. As usual, any technical problems concerning access must immediately be brought to the attention of the Help Desk by phone.
The Final Exam is open-book and open-notes. However, please also remember that Keller’s strict Academic Integrity Policy is in effect for the Exam. Collaboration among classmates or other students who may have taken similar exams is not permitted, nor is accessing the Internet trolling for information permitted.
We can briefly discuss any broad issues associated with the Final Exam in our next class on Thursday, October 10, but I need the full time to cover mergers and restructuring. Or please send me an email with any questions.
Good luck!
Serge L. Wind, PhD