Chapter 5 Time Value of Money
5-1: Time Lines
a. The first step in time value analysis is a time line.
i. Time Line: a graphical representation used to show the timing of cash
flows. It helps you visualize whats happening in a particular probl
CHAPTER 9: STOCKS AND THEIR VALUATIONS
9-1: Legal Rights and Privileges of Common Stockholders
a. A corporations common stockholders are the owners of the corporation
i. They have right to elect its directors, who, in turn, elect the officers who
CHAPTER 8: RISK AND RATE OF RETURN
8-1: The Risk-Return Trade-Off
a. Figure 8.1 on page 259 shows the slope of the risk-return line. A steeper line
suggest that an investor is very averse to taking on risk, whereas a flatter line
would suggest that
Chapter 4: Analysis of Financial Statements
4-1: Ratio Analysis
a. Ratios are used by comparing each firms debt to its assets and comparing interest
expense to the income and cash available to pay that interest
b. Five categories of rations:
Chapter 7: Bonds and Their Valuations
7-1: Who Issues Bonds?
a. A bond is a long-term contract under which a borrower agrees to make payments
of interest and principal on specific dates to the holders of the bond. Theyre a
long term debt instrument
CHAPTER 3: Financial Statements, Cash Flow, and Taxes
Looking at the balance sheet we can see how large a company is, the types of assets it holds, and
how it finances those assets.
Looking at the income statement, we can see if the companys sales
Chapter 1: An Overview of Financial Management
For corporations, managements goal should be to maximize shareholder wealth, which
means maximizing the value of the stock.
o By maximizing the value of the stock, we mean true, long-run value, which