Chapter 017 Financial Leverage and Capital Structure Policy
Multiple Choice Questions 1. The use of personal borrowing to change the overall amount of financial leverage to which an individual is exposed is called: A. homemade leverage. b. restructured le
Chapter 004 Long-Term Financial Planning and Growth
Multiple Choice Questions 1. The long-range time period, usually the next two to five years, over which the financial planning process focuses is known as the: A. planning horizon. b. planning strategy.
Chapter 024 Option Valuation
Multiple Choice Questions 1. Which one of the following entails the purchase of a put option on a stock to limit the downside risk associated with owning that stock? a. put-call parity b. covered call C. protective put d. stra
Chapter 003 Working with Financial Statements
Multiple Choice Questions 1. Activities of a firm which require the spending of cash are known as: a. sources of cash. B. uses of cash. c. cash payments. d. cash receipts. e. cash on hand.
SECTION: 3.1 TOPIC:
Chapter 023 Risk Management: An Introduction to Financial Engineering
Multiple Choice Questions 1. The process of lowering a firm's exposure to rate or price fluctuations is called: a. abating. b. deriving. C. hedging. d. forwarding. e. manipulating.
Chapter 006 Discounted Cash Flow Valuation
Multiple Choice Questions 1. An annuity is a(n): a. level stream of perpetual cash flows. B. level stream of cash flows occurring for a fixed period of time. c. increasing stream of perpetual cash flows. d. incre
Chapter 014 Options and Corporate Finance
Multiple Choice Questions 1. A contract that grants its owner the right to buy or sell a specified asset at an agreed-upon price on or before a given date is called a(n): A. option. b. invoice. c. exercise. d. swa
Chapter 022 International Corporate Finance
Multiple Choice Questions 1. A security issued in the United States that represents shares of a foreign stock and allows that stock to be traded in the United States is called a(n): A. American Depository Receip
Chapter 002 Financial Statements, Taxes and Cash Flow
Multiple Choice Questions 1. The financial statement summarizing the value of a firm's equity on a particular date is the: a. income statement. B. balance sheet. c. statement of cash flows. d. cash flo
Chapter 008 Stock Valuation
Multiple Choice Questions 1. The stock valuation model that determines the current stock price by dividing the next annual dividend amount by the excess of the discount rate less the dividend growth rate is called the _ model.
Chapter 009 Net Present Value and Other Investment Criteria
Multiple Choice Questions 1. The difference between an investment's market value and its cost is the: A. net present value. b. internal rate of return. c. payback period. d. profitability index.
Chapter 007 Interest Rates and Bond Valuation
Multiple Choice Questions 1. The stated interest payment, in dollars, made on a bond each period is called the bond's: A. coupon. b. face value. c. maturity. d. yield to maturity. e. coupon rate.
Chapter 011 Project Analysis and Evaluation
Multiple Choice Questions 1. Forecasting risk is defined as the: a. possibility that some proposed projects will be rejected. b. process of estimating future cash flows relative to a project. C. possibility that
Chapter 020 Cash and Liquidity Management
Multiple Choice Questions 1. The speculative motive is the need to hold cash: a. to pay outstanding checks. b. to maintain a firm's daily operations. C. to invest in opportunities which may arise. d. to compensate
Chapter 005 Introduction to Valuation: The Time Value of Money
Multiple Choice Questions 1. The amount an investment will be worth after one or more periods of time is the _ value. A. future b. present c. principal d. discounted e. simple
SECTION: 5.1 TOP
Chapter 021 Credit and Inventory Management
Multiple Choice Questions 1. The conditions under which a firm sells its goods and services for cash or credit are called the: A. terms of sale. b. credit analysis. c. collection policy. d. payables policy. e. c
Chapter 015 Cost of Capital
Multiple Choice Questions 1. The return shareholders require on their investment in a firm is called the: a. dividend yield. B. cost of equity. c. capital gains yield. d. cost of capital. e. income return.
SECTION: 15.2 TOPIC:
Chapter 025 Mergers and Acquisitions
Multiple Choice Questions 1. The complete absorption of one company by another, wherein the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity, is called a: A. merger. b. con
Chapter 001 Introduction to Corporate Finance
Multiple Choice Questions 1. The person generally directly responsible for overseeing the tax management, cost accounting, financial accounting, and data processing functions is the: a. treasurer. b. director.
Chapter 010 Making Capital Investment Decisions
Multiple Choice Questions 1. The changes in a firm's future cash flows that are a direct consequence of accepting a project are called _ cash flows. A. incremental b. stand-alone c. after-tax d. net present
Chapter 012 Some Lessons from Capital Market History
Multiple Choice Questions 1. The excess return required from a risky asset over that required from a risk-free asset is called the: A. risk premium. b. geometric premium. c. excess return. d. average re
Chapter 016 Raising Capital
Multiple Choice Questions 1. What is venture capital? a. equity funds from internal sources used to finance high-risk projects b. capital raised from issuing equity securities in order to retire debt securities C. financing for
Chapter 018 Dividends and Dividend Policy
Multiple Choice Questions 1. A payment made out of a firm's earnings to its owners in the form of either cash or stock is called a: A. dividend. b. distribution. c. repurchase. d. payment-in-kind. e. stock split.
Chapter 019 Short-Term Finance and Planning
Multiple Choice Questions 1. The length of time between the acquisition of inventory and the collection of cash from receivables is called the: A. operating cycle. b. inventory period. c. accounts receivable per
Chapter 026 Leasing
Multiple Choice Questions 1. The user of an asset in a leasing arrangement is called the: A. lessee. b. lessor. c. guarantor. d. trustee. e. manager.
SECTION: 26.1 TOPIC: LESSEE TYPE: DEFINITIONS
2. The owner of an asset in a leasing a