Test 3 Valuation Intermediate corporate Finance
Venture Capatalist
Always looking for an exit strategy investment ranged only a few years
Start Up
Financing for firms that start within the past year, funds likely to pay for marketing and development I
0
If the firm has annul debt obligations of $40 and generates cash flow of $30 how much will share holders receive
given priority over
In bankruptcy cases the claims of lawyers are ___ the claims of senior bond holders
SEO
Is a new issue for a company with securities that have been previously issued
lowering interest rates on the bonds increasing firm value
Protective covenants benefit shareholders by
Seed Money Stage
Small amount of money to prove a concept or develop a product
They reduce the value of the firm
What is the effect of a possible bankruptcy cost on the value of the firm
the static trade off theory of capital structure
Which theory of capital structure leads to a target debt ratio
fist round financing
additional money to begin sales and manufacturing after a firm has spent its start up funds
reduce
agency conflicts lead to agency costs which ___ the value of the firm
prospectus
contains much of the information put into the registration statement given to potential investors of the firm
third round financing
financing for a company that is at least breaking even and is contemplating an expansion
debt tax shield
firm value initially increases when the proportion of debt in the capital structure increases due to the ___
second round financing
funds earmarked for working capital for a firm that is currently selling its products but is still loosing money
the lawyers
if a firm is in financial distress who will get paid first
asymmetric
if a manager has more information than an investor about a firm that information is referred to as ____ information
angle investors
individuals who invest in start-up companies with high growth potential in exchange for a share of ownership
IPO
issued when the company decides to go public
forth round financing
money is provided for the firms that are likely to go public within half a year
negative
the possibility of bankruptcy cost has a ___ effect on the value of the firm
direct and indirect
the two broad types of costs of financial distress are ___ costs
stocks and bonds
the value of the firm depends on the value of its ___
the value of the firm increases with leverage
what do MM assert about the relationship between leverage and firms value in the presence of corporate taxes
bond covenants
what is the lowest cost solution to the shareholder - bondholder conflict