Financial Analyst 2020

The formula for calculating future value (FV) is

FV = PV x (1+r)^n

pv=

FV/(1+i)^n

interest

residual debt*i/12

What is an annuity?

A series of equal payments at equal time periods and guaranteed for a fixed number of years

Which of the following is not an investment grade credit rating?

BB+

Which of the following is true when a bond is trading at a discount?

Coupon Rate < Current Yield < Yield to Maturity

What is working capital?

Current Assets - Current Liabilities

(Internal return revenue) IRR<i=> IRR>i=>

Do not invest Invest

cost of capital

Net debt/Total assets x Cost of debt + Equity/Total assets x Cost of equity

The correct order of capital stack from the most to least secured is

Senior debt > Subordinated debt > Equity

What is a par value of a bond?

The amount borrowed by the issuer of the bond and returned to the investors when the bond matures

The concept of time value of money is that

The cash flows that occur earlier are more valuable than cash flows that occur later

What is the enterprise value of a business?

The entire value of the business without giving consideration to its capital structure

The concept of present value relates to the idea that

The money you have now is worth more today than an identical amount you would receive in the future

When the price of a bond is above the face value, the bond is said to be

Trading at a premium