Finance Exam 1

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

CapEx

Net Capital Expenditures

NWC

Net Working Capital

The Treasury yield curve plots the yields on Treasury notes and bonds relative to the ____ of those securities.

maturity

NWC

= CA - CL

OCF

= EBIT - taxes + depreciation

FCF

= EBIT - taxes + depreciation - CapEx - ∆NWC

Net Working Capital

= current assets - current liabilities

Market Capitalization

= n * P

CapEx

= ∆NFA + depreciation

Book value of firm's assets today

net fixed assets + current liabilities + net working capital

Shareholders' equity is...

the residual value of a firm.

Marginal tax rate

the tax rate that applies to the next dollar of taxable income that a firm earns

Average tax rate

total tax paid divided by the total taxable income

Coupon per period = (7.4%, semiannual)

(.074 / 2) * $1000 = $37

US Marginal Tax Rate

35%

Which one of the following statements is correct? -Bond markets have less daily trading volume than equity markets. -There are less bond issues than there are equity issues. -Municipal bond prices are highly transparent. -Bond markets are dealer based. -Most bond trades occur on the NYSE.

Bond markets are dealer based.

FCF

Free Cash Flow From Assets

What is the primary purpose of bond covenants?

Lender protection

P

Market price

OCF

Operating Cash Flow

Which one of the following indicates that a firm has generated sufficient internal cash flow to finance its entire operations for the period?

Positive cash flow from assets (2.4)

Which one of the following will increase cash flow from assets but not affect the operating cash flow?

Sale of a fixed asset

n

Shares outstanding

Which one of the following types of bonds should an investor purchase if he or she is primarily concerned about ensuring that bond ownership will increase his or her purchasing power?

TIPS

Which one of the following terms refers to a bond's rate of return that is required by the market place?

Yield to maturity

Firms that compile financial statements according to GAAP...

can still manipulate their earnings to some degree.

Balance sheet

current assets + net fixed assets = current liabilities + long-term debt + shareholders' equity

Assets are listed in _____________ order of liquidity.

descending


Ensembles d'études connexes

College American History ch.11-12

View Set

IT Unit 4 Test Review (Memory, Storage, Buying)

View Set

Types of Incontinence Chapter 55

View Set

Quiz 7 Information Security Fundamentals

View Set

CHAPTER 8:: ACCOUNTING for PURCHASES and ACCOUNTS PAYABLE

View Set

GEB4891 MIDTERM REVIEW CH. 1-6 (Chapter 2)

View Set

Unit 21 - Fair Housing and Ethical Practices

View Set