Finance > QUESTIONS & ANSWERS > Business Finance notes final exam test 1 2023 (All)

Business Finance notes final exam test 1 2023

Document Content and Description Below

Business Finance notes final exam test 1 2023 t/f the goal of the shareholders wealth maximization considers the risk of the various financial decisions - ANS true Profit maximizatiom does not adeq ... uately describe the goal of the firm because - ANS a. profit maximization does not require the consideration of risk b. proft maximization ignores the the timing of a project's return what is the sales revenue minus cost of goods sold and operating expenses known as for income statement purposes` - ANS EBIT The debt ratio is a measure of a firms - ANS leverage what is the formula for debt ratio - ANS total debt/ total assets which of the following is always a non cash expense - ANS depreciation bonds are traded In the money markets, while common stock is traded in the capital markets. - ANS what is a non cash expense - ANS expense reported on the income statement of the current accounting period but there was no related cash payment during the period if current market interest rates rise what will happen to the value of outstanding bonds? - ANS they will fall if current market interest rates fall what will happen to the value of outstanding bonds - ANS they will increaser depreciation expense affect tax related cash flows by - ANS decreasing taxable income thus reducing taxes the most expensive source of captial - ANS new common stock put these in order of most expensive to least expensive sources of capital (highest to lowest) - ANS new common stock retained earnings preferred stock debt what are corporate bonds, common stocks, treasury bonds, financial leases classifies as money market or capital market - ANS capital market what is a negotiable certificate of deposit , commercial paper, treasury bills, classified as - ANS money market instrument money market instruments are classified as - ANS short term debt insturments what are some examples of money market instruments - ANS treasury bills, CDS commercial paper, bankers acceptances capital market insturments are classifies as - ANS long term financial securities The market in which new issues of a security are sold to initial buyers. the only time the issuing firm ever gets any money for these securites - ANS primary markets the additional shares by a company whose share are already publicly traded - ANS seasoned equity offering the market in which previously issued [Show More]

Last updated: 2 years ago

Preview 1 out of 11 pages

Buy Now

Instant download

We Accept: