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ch8

Course: NIKA 101, Spring 2011
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Word Count: 10442

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_______________________________________________________________________________________ Multiple ch8 Student: Choice Questions 1. An analysis of what happens to the estimate of the net present value when you examine a number of different likely situations is called _____ analysis. A. B. C. D. E. forecasting scenario sensitivity simulation break-even 2. An analysis of what happens to the estimate of net present...

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Coursehero >> Texas >> Acton School of Business >> NIKA 101

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Acton School of Business - NIKA - 101
ch9Student: _Multiple Choice Questions1. The excess return required from a risky asset over that required from a risk-free asset is called the:A.B.C.D.E.risk premium.geometric premium.excess return.average return.variance.2. The average squa
Acton School of Business - NIKA - 101
ch10Student: _Multiple Choice Questions1. A portfolio is:A.B.C.D.E.a group of assets, such as stocks and bonds, held as a collective unit by an investor.the expected return on a risky asset.the expected return on a collection of risky assets.t
Acton School of Business - NIKA - 101
ch11Student: _Multiple Choice Questions1. In the equation R =+ U, the three symbols stand for:A.B.C.D.E.average return, expected return, and unexpected return.required return, expected return, and unbiased return.actual total return, expected
Acton School of Business - NIKA - 101
ch12Student: _Multiple Choice Questions1. The weighted average of the firm's costs of equity, preferred stock, and after tax debt isthe:A.B.C.D.E.reward to risk ratio for the firm.expected capital gains yield for the stock.expected capital gai
Acton School of Business - NIKA - 101
ch13Student: _Multiple Choice Questions1. An efficient capital market is one in which:A.B.C.D.E.brokerage commissions are zero.taxes are irrelevant.securities always offer a positive rate of return to investors.security prices are guaranteed b
Acton School of Business - NIKA - 101
ch14Student: _Multiple Choice Questions1. A stock certificate often has a stated value on it. This amount is the:A.B.C.D.E.book value.stated book value.subordinated liquidation value.par value.None of the above.2. The dedicated capital of a
Acton School of Business - NIKA - 101
ch15Student: _Multiple Choice Questions1. The use of personal borrowing to change the overall amount of financial leverage to which anindividual is exposed is called:A.B.C.D.E.homemade leverage.dividend recapture.the weighted average cost of c
Acton School of Business - NIKA - 101
ch16Student: _Multiple Choice Questions1. The explicit costs, such as the legal expenses, associated with corporate default are classified as_ costs.A.B.C.D.E.flotationbeta conversiondirect bankruptcyindirect bankruptcyunlevered2. The costs
Acton School of Business - NIKA - 101
ch17Student: _Multiple Choice Questions1. The flow-to-equity (FTE) approach in capital budgeting is defined to be the:A. discounting all cash flows from a project at the overall cost of capital.B. scale enhancing discount process.C. discounting of t
Acton School of Business - NIKA - 101
ch18Student: _Multiple Choice Questions1. Payments made out of a firm's earnings to its owners in the form of cash or stock are called:A.B.C.D.E.dividends.distributions.share repurchases.payments-in-kind.stock splits.2. Payments made by a fi
Acton School of Business - NIKA - 101
ch19Student: _Multiple Choice Questions1. An equity issue sold directly to the public is called:A.B.C.D.E.a rights offer.a general cash offer.a restricted placement.a fully funded sales.a standard call issue.2. An equity issue sold to the fi
Acton School of Business - NIKA - 101
ch20Student: _Multiple Choice Questions1. The length of time debt remains outstanding with some unpaid balance is called the:A.B.C.D.E.funded period.sinking fund period.deferred call period.maturity.None of the above.2. Long-term debt is som
Acton School of Business - NIKA - 101
ch21Student: _Multiple Choice Questions1. In a lease arrangement, the owner of the asset is:A.B.C.D.E.the lesser.the lessee.the lessor.the leaser.None of the above.2. In a lease arrangement, the user of the asset is:A.B.C.D.E.the lesse
Acton School of Business - NIKA - 101
ch22Student: _Multiple Choice Questions1. A financial contract that gives its owner the right, but not the obligation, to buy or sell a specifiedasset at an agreed-upon price on or before a given future date is called a(n) _ contract.A.B.C.D.E.o
Acton School of Business - NIKA - 101
ch23Student: _Multiple Choice Questions1. The option to abandon is:A.B.C.D.E.a real option.usually of little value because of the cost associated with abandonment.irrelevant in capital budgeting analysis.nearly always less relevant the option
Acton School of Business - NIKA - 101
ch24Student: _Multiple Choice Questions1. A warrant gives the owner:A.B.C.D.E.the obligation to sell securities directly to the firm at a fixed price for a specified time.the right to purchase securities directly from the firm at a fixed price f
Acton School of Business - NIKA - 101
ch25Student: _Multiple Choice Questions1. A derivative is a financial instrument whose value is determined by:A.B.C.D.E.regulatory body such as the FTC.a primitive or underlying asset.hedging a risk.hedging a speculation.None of the above.2.
Acton School of Business - NIKA - 101
ch26Student: _Multiple Choice Questions1. The length of time between the acquisition of inventory and the collection of cash from receivablesis called the:A.B.C.D.E.operating cycle.inventory period.accounts receivable period.accounts payable
Acton School of Business - NIKA - 101
ch27Student: _Multiple Choice Questions1. Financial managers broaden their definition of cash to include:A.B.C.D.E.currency, bank deposits, stocks and bonds.currency, checking deposits, undeposited checks, and bonds.cash, bonds, bank deposits a
Acton School of Business - NIKA - 101
ch28Student: _Multiple Choice Questions1. Selling goods and services on credit is:A.B.C.D.E.an investment in a customer.never necessary unless customers cannot pay for the goods.a decision independent of customers.permissible if your bank lend
Acton School of Business - NIKA - 101
ch29Student: _Multiple Choice Questions1. The complete absorption of one company by another, wherein the acquiring firm retains its identityand the acquired firm ceases to exist as a separate entity, is called a:A.B.C.D.E.merger.consolidation.
Acton School of Business - NIKA - 101
Chapter 2Problems 1-27Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 3Problems 1-30Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 4Problems 1-76Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 5Problems 1-40Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 7Problems 1-40Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 8Problems 1-30Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 9Problems 1-30Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 10Problems 1-39Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 14Problems 1-7Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 28Problems 1-25Input boxes in tanOutput boxes in yellowGiven data in blueCalculations in redAnswers in greenNOTE: Some functions used in these spreadsheets may require thatthe &quot;Analysis ToolPak&quot; or &quot;Solver Add-in&quot; be installed in Excel.To
Acton School of Business - NIKA - 101
Chapter 1INTRODUCTION TO CORPORATE FINANCESLIDES1.11.21.31.41.51.61.71.81.91.101.111.121.131.141.151.161.171.181.191.201.21Key Concepts and SkillsChapter OutlineWhat is Corporate Finance?Balance Sheet Model of the FirmThe Capit
Acton School of Business - NIKA - 101
Chapter 2FINANCIAL STATEMENTS AND CASH FLOWSLIDES2.12.22.32.42.52.62.72.82.92.102.112.122.132.142.152.162.172.182.192.202.212.222.232.242.252.262.272.282.292.302.312.322.332.342.352.36Key Concepts and SkillsChapter
Acton School of Business - NIKA - 101
Chapter 3FINANCIAL STATEMENTS ANALYSIS AND LONGTERM PLANNINGSLIDES3.13.23.33.43.53.63.73.83.93.103.113.123.133.143.153.163.173.183.193.203.213.223.233.243.253.263.273.283.293.30Key Concepts and SkillsChapter OutlineFinan
Acton School of Business - NIKA - 101
Chapter 4DISCOUNTED CASH FLOW VALUATIONSLIDES4.14.24.34.44.54.64.74.84.94.104.114.124.134.144.154.164.174.184.194.204.214.224.234.244.254.264.274.284.294.304.314.324.334.344.354.364.374.384.394.40Key Concepts and
Acton School of Business - NIKA - 101
Appendix 4ANet Present Value: First Principles of FinanceSLIDES4A.14A.24A.34A.44A.54A.64A.74A.84A.94A.104A.114A.124A.13Key Concepts and SkillsAppendix OutlineMaking Consumption Choices over TimeIntertemporal Consumption Opportunity Set
Acton School of Business - NIKA - 101
Chapter 5HOW TO VALUE BONDS AND STOCKSSLIDESA-70 CHAPTER 55.15.25.35.45.55.65.75.85.95.105.115.125.135.145.155.165.175.185.195.205.215.225.235.245.255.265.275.285.295.305.315.325.335.345.355.365.375.385.395.40Ke
Acton School of Business - NIKA - 101
Chapter 6NET PRESENT VALUE AND OTHER INVESTMENTRULESSLIDES6.16.26.36.46.56.66.76.86.96.106.116.126.136.146.156.166.176.186.196.206.216.226.236.246.256.266.276.286.296.306.316.326.336.346.356.36Key Concepts and Skill
Acton School of Business - NIKA - 101
Chapter 7MAKING CAPITAL INVESTMENT DECISIONSSLIDES7.17.27.37.47.57.67.77.87.97.107.117.127.137.147.157.167.177.187.197.207.217.227.237.247.257.267.277.287.297.307.31Key Concepts and SkillsChapter OutlineIncremental Cash
Acton School of Business - NIKA - 101
Chapter 8RISK ANALYSIS, REAL OPTIONS, AND CAPITALBUDGETINGSLIDES8.18.28.38.48.58.68.78.88.98.108.118.128.138.148.158.168.178.188.198.208.218.228.238.248.258.268.278.288.298.30Key Concepts and SkillsChapter OutlineSensit
Acton School of Business - NIKA - 101
Chapter 9RISK AND RETURNLESSONS FROM MARKET HISTORYSLIDES9.19.29.39.49.59.69.79.89.99.109.119.129.139.149.159.169.179.189.199.209.219.229.23Key Concepts and SkillsChapter OutlineReturnsReturnsReturns: ExampleReturns: Exampl
Acton School of Business - NIKA - 101
Chapter 10RETURN AND RISKTHE CAPITAL ASSET PRICING MODEL (CAPM)SLIDESA-130 CHAPTER 1010.110.210.310.410.510.610.710.810.910.1010.1110.1210.1310.1410.1510.1610.1710.1810.1910.2010.2110.2210.2310.2410.2510.2610.2710.2810.29
Acton School of Business - NIKA - 101
Chapter 11AN ALTERNATIVE VIEW OF RISK AND RETURNTHE ARBITRAGE PRICING THEORYSLIDES11.111.211.311.411.511.611.711.811.911.1011.1111.1211.1311.1411.1511.1611.1711.1811.1911.2011.2111.2211.2311.2411.2511.2611.27Key Concepts and
Acton School of Business - NIKA - 101
Chapter 12RISK, COST OF CAPITAL, AND CAPITAL BUDGETINGSLIDES12.112.212.312.412.512.612.712.812.912.1012.1112.1212.1312.1412.1512.1612.1712.1812.1912.2012.2112.2212.2312.2412.2512.2612.2712.2812.2912.3012.3112.3212.3312.
Acton School of Business - NIKA - 101
Chapter 13CORPORATE FINANCING DECISIONS AND EFFICIENTCAPITAL MARKETSSLIDES13.113.213.313.413.513.613.713.813.913.1013.1113.1213.1313.1413.1513.1613.1713.1813.1913.2013.2113.2213.2313.2413.2513.2613.2713.2813.2913.3013.31
Acton School of Business - NIKA - 101
Chapter 14LONG-TERM FINANCINGAN INTRODUCTIONSLIDES14.114.214.314.414.514.614.714.814.914.1014.1114.1214.1314.1414.1514.1614.1714.1814.1914.2014.2114.2214.2314.2414.2514.2614.2714.2814.2914.30Key Concepts and SkillsChapte
Acton School of Business - NIKA - 101
Chapter 15CAPITAL STRUCTUREBASIC CONCEPTSSLIDES15.115.215.315.415.515.615.715.815.915.1015.1115.1215.1315.1415.1515.1615.1715.1815.1915.2015.2115.2215.2315.24Key Concepts and SkillsChapter OutlineCapital Structure and the Pie
Acton School of Business - NIKA - 101
Chapter 16CAPITAL STRUCTURELIMITS TO THE USE OF DEBTSLIDES16.116.216.316.416.516.616.716.816.916.1016.1116.1216.1316.1416.1516.1616.1716.1816.1916.2016.2116.2216.2316.24Key Concepts and SkillsChapter OutlineCosts of Financial
Acton School of Business - NIKA - 101
Chapter 17VALUATION AND CAPITAL BUDGETING FOR THELEVERED FIRMSLIDES17.117.217.317.417.517.617.717.817.917.1017.1117.1217.1317.1417.1517.1617.1717.1817.1917.2017.2117.2217.2317.24Key Concepts and SkillsChapter OutlineAdjusted
Acton School of Business - NIKA - 101
Chapter 18DIVIDENDS AND OTHER PAYOUTSSLIDES18.118.218.318.418.518.618.718.818.918.1018.1118.1218.1318.1418.1518.1618.1718.1818.1918.2018.2118.2218.2318.2418.25Key Concepts and SkillsChapter OutlineDifferent Types of Dividends
Acton School of Business - NIKA - 101
Chapter 19ISSUING SECURITIES TO THE PUBLICSLIDES19.119.219.319.419.519.619.719.819.919.1019.1119.1219.1319.1419.1519.1619.1719.1819.1919.2019.2119.2219.2319.2419.2519.2619.2719.2819.2919.30Key Concepts and SkillsChapter O
Acton School of Business - NIKA - 101
Chapter 20LONG-TERM DEBTSLIDES20.120.220.320.420.520.620.720.820.920.1020.1120.1220.1320.1420.1520.1620.1720.1820.1920.2020.2120.22Key Concepts and SkillsChapter OutlineLong-Term Debt: A ReviewFeatures of a Cisco Systems BondT
Acton School of Business - NIKA - 101
CHAPTER 21LEASINGSLIDES21.121.221.321.421.521.621.721.821.921.1021.1121.1221.1321.1421.1521.1621.1721.1821.1921.2021.2121.2221.2321.2421.2521.2621.2721.2821.2921.3021.3121.3221.3321.3421.35Key Concepts and SkillsChap
Acton School of Business - NIKA - 101
CHAPTER 22OPTIONS AND CORPORATE FINANCESLIDES22.122.222.322.422.522.622.722.822.922.1022.1122.1222.1322.1422.1522.1622.1722.1822.1922.2022.2122.2222.2322.2422.2522.2622.2722.2822.2922.3022.3122.3222.3322.3422.3522.36
Acton School of Business - NIKA - 101
CHAPTER 23OPTIONS AND CORPORATE FINANCEEXTENSIONS AND APPLICATIONSSLIDES23.123.223.323.423.523.623.723.823.923.1023.1123.1223.1323.1423.1523.1623.1723.1823.1923.2023.2123.2223.2323.2423.2523.2623.2723.2823.29Key Concepts a
Acton School of Business - NIKA - 101
CHAPTER 24WARRANTS AND CONVERTIBLESSLIDES24.124.224.324.424.524.624.724.824.924.1024.1124.1224.1324.1424.1524.1624.1724.1824.1924.2024.2124.2224.2324.24Key Concepts and SkillsChapter OutlineWarrantsWarrantsThe Difference bet
Acton School of Business - NIKA - 101
CHAPTER 25DERIVATIVES AND HEDGING RISKA-37 CHAPTER 2525.40 An Example of an Interest Rate Swap25.1 Key Concepts and Skills25.41 An Example of a Currency Swap25.2 Chapter Outline25.42 An Example of a Currency Swap25.3 Forward Contracts25.43 An Exa
Acton School of Business - NIKA - 101
Chapter 26SHORT-TERM FINANCE AND PLANNINGSLIDES26.126.226.326.426.526.626.726.826.926.1026.1126.1226.1326.1426.1526.1626.1726.1826.1926.2026.2126.2226.2326.24Key Concepts and SkillsChapter OutlineTracing Cash and Net Working C
Acton School of Business - NIKA - 101
Chapter 27CASH MANAGEMENT27.127.227.327.427.527.627.727.827.927.1027.1127.1227.1327.1427.1527.1627.1727.1827.1927.2027.2127.2227.2327.24Key Concepts and SkillsChapter OutlineReasons for Holding CashDetermining the Target Cash
Acton School of Business - NIKA - 101
Chapter 28CREDIT MANAGEMENT28.128.228.328.428.528.628.728.828.928.1028.1128.1228.1328.1428.1528.1628.1728.1828.1928.2028.2128.2228.2328.2428.2528.2628.2728.2828.2928.30Key Concepts and SkillsChapter OutlineTerms of the Sa
Acton School of Business - NIKA - 101
CHAPTER 29MERGERS AND ACQUISITIONSSLIDES29.129.229.329.429.529.629.729.829.929.1029.1129.1229.1329.1429.1529.1629.1729.1829.1929.2029.2129.2229.2329.2429.25Key Concepts and SkillsChapter OutlineThe Basic Forms of Acquisitions