AFP Certified Treasury Professional CTP Exam Questions in PDF

Free AFP CTP Dumps Questions (page: 6)

The stock of a manufacturing company is priced so that its expected rate of return is below its required rate, as calculated by the Capital Asset Pricing Model (CAPM). Which of the following will occur in an efficient capital market?

  1. Buying pressure for the firm’s stock will drive the price up.
  2. Buying pressure for the firm’s stock will drive the price down.
  3. Selling pressure for the firm’s stock will drive the price up.
  4. Selling pressure for the firm’s stock will drive the price down.

Answer(s): D



XYZ Company is considering selling treasury stock but is concerned about the amount of capital it will raise given the current high volatility of the stock market. What is the BEST strategy a firm can employ to reduce its uncertainty?

  1. Hire an investment banker to underwrite the stock on a full underwriting basis.
  2. Hire an investment banker to issue the stock using a master registration statement.
  3. Hire an investment banker to underwrite the stock with no flotation costs.
  4. Hire an investment banker to underwrite the stock on a best efforts basis.

Answer(s): A



Company A is a large public company with annual revenue of $1.2 billion and high fixed costs. Its stock is listed on the New York Stock Exchange. Company B is a mid-sized company with annual revenue of $100 million and low fixed costs. Its stock is listed on the NASDAQ. Which of the following statements is MOST LIKELY to be true when comparing Company A and Company B?

  1. Company A has greater reporting requirements and more marketable stock than Company B.
  2. Company A has greater reporting requirements and less marketable stock than Company
  3. Company B has greater reporting requirements and more marketable stock than Company A.
  4. Company B has greater reporting requirements and less marketable stock than Company A.

Answer(s): A



An investor concerned about taxes on dividend distributions will MOST LIKELY purchase stock on which of the following dates?

  1. Ex-dividend date
  2. Record date
  3. Declaration date
  4. Payment date

Answer(s): A



A large mature company with limited growth opportunities (positive NPV projects) achieved abnormally high profits this year. After paying mandatory principal, interest, and taxes, the company has $200 million in surplus cash on hand. Assuming its investor base is most concerned with capital appreciation, which of the following is the BEST option for the company?

  1. Declare a special dividend.
  2. Reinvest cash into the company.
  3. Declare a cash dividend.
  4. Repurchase shares of outstanding stock.

Answer(s): D



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A
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7/11/2023 3:00:00 AM

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7/18/2023 5:05:00 AM

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6/11/2023 2:07:00 AM

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Jason
9/30/2023 1:07:00 PM

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12/29/2023 5:06:00 PM

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10/3/2023 8:19:00 AM

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8/24/2023 12:47:00 PM

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