Each of the following transactions has the effect of reducing retained earnings except ________.
I). stock splits.
II). cash dividends.
III). stock dividends.
IV). dividends in kind.

According to the Framework for the Preparation and Presentation of Financial Statements, the objective of financial statements is fair presentation of the company's
I). financial position.
II). financial performance.
III). cash flows.
IV). earning power.

Which of the following combinations of interest rate options would replicate a 6-month by 9-month forward rate agreement to pay 5% fixed? The LIBOR below refers to the 3-month LIBOR.

Watson is planning to value Alcan, Inc for the year of 2004. The financial information Watson has assembled for his valuation is as follows (in millions):
EBIT: 500.
*
Interest expense: 150.
*
Depreciation: 200.
*
Income tax rate: 35%.
*
Investment in working capital: 80.
*
Investment in fixed capital: 400.
*
What is the FCFF for the company?

What are potential liabilities of a company such as possible damage awards due to lawsuits?