The goal of the corporation is to
Maximize the stock price
Which of the following is not a requirement for an efficient market
Well-managed
... [Show More] firms
What is the relationship between risk and required return?
Higher risk causes higher required return
The value of money depends upon
The timing of the receipt The certainty of receipt and theRiskiness of receipt
What is the purpose of the SEC 10-K filing requirement?
Promote transparency and market efficiency
Which line item is not part of net working capital?
Bonds
Which action causes a cash outflow?
Increase in inventory
Which of the following is correct?
Gross PPE equals Net PPE plus accumulated depreciation
Net Margin is defined as
Net Income divided by sales
Which item is transferred from the income statement to the balance sheet?
Depreciation expense and Addition to retained earnings
What item is added to net income to calculate net cash flow?
Depreciation expense
Which cash flow statement represents cash earned by producing and selling the product
Cash flow operations
Which ratio reflects a firm's reliance on debt financing?
Financial leverage
If two firms use different inventory valuation methods
it is called:, Accounting difference
What affects the required return on a security?
Perceived riskiness of the security, Financial decisions of the firm, Trading in financial markets
Which ratio might be used in working capital management?
Quick Ratio
How might a firm incent customers to pay sooner?
Larger discount
Which ratio is used to value a private firm?
PE
The SEC regulates financial markets to achieve what goal?
Protect investors Increase transparency and Increase market efficiency
The Accredited Investor designation is used for...
Rule 144A and Hedge funds
FX hedging is used to...
Reduce FX risk
A strong dollar has what effect?
Increases imports
Relatively high interest rates in the U.S. has what effect?
Strong dollar
If a firm's combined leverage is high what is the implication?
Profits are more volatile as sales fluctuate
Why would a company buy back outstanding stock?
To boost the price of the stock increase financial leverage and Lack of investment opportunities
Which can best be described as a present value problem?
Valuation of bonds Valuation of stock and Evaluation of potential investment
What attributes of cash should be considered in evaluating investments? Size of cash flow Timing of the cash flow and Risk of cash flows
...
Firms use "sensitivity analysis" because:
To anticipate impact of erroneous forecasts
If IRR is greater than WACC an adopted project
Increases shareholder value
If firm increases leverage
Indeterminant impact on price
Which measures sales growth that can be financed internally?
SGR
Why are accurate sales forecast desirable?
To plan resource acquisition [Show Less]