CH1
The top financial manager within a firm is: the Chief Financial Officer
(CFO)
Capital budgeting: The process of planning and managing a firms longterm investments.
Managers must be concerned not only with how much cash they expect to
receive, but also
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Reem AlMoammer
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Sarah AlQahtani
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Hanouf AlKathiri
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Alanoud Alawwam
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INDUSTRY OVERVIEW
Banks are just one part of the world of financial institutions, standing
alongside in
201FIN
Lecture 1 tutorial
Introduction to Corporate Finance
Question 1.
Define Finance.
Question 2.
How the financial environment has changed over the last decade?
Question 3.
What is corporate finance and what are the three decisions that the financial m
201FIN
Tutorial 5
Chapter 6: Discounted cash flow valuation
Question 1.
What is the present value of the following cash flows if the discount rate is 10%. Draw the time
line and show how you do discounting with arrows.
Year
1
2
3
4
Cash flow
$950
1,040
1,
201FIN
Tutorial 4: Time value of money
Question 1.
What is the relationship between the present value, interest rate and discount period?
Question 2.
What is compounding? What is discounting?
Question 3.
As you increase the length of time involved, what h
Net Present Value & Other
Investment Criteria
CHAPTER 9
Key Concepts and Skills
Compute payback & discounted payback and understand their
shortcomings
Understand accounting rates of return and their shortcomings
Be able to compute internal rates of ret
Cost of Capital
CHAPTER 14
Maram Alnumay
Chapter Outline
The Cost of Capital: Some Preliminaries
The Cost of Equity
The Costs of Debt and Preferred Stock
The Weighted Average Cost of Capital
Flotation Costs and the Weighted Average Cost of Capital
Wh
approximately
A) $100.
B) $105.
C) $95.
D) $90.
Answer: C
Question Status: Previous Edition
15) With an interest rate of 10 percent, the present value of a security that pays $1,100 next year and $1,460 four
years from now is approximately
A) $1,000.
B) $
) A consol bond is a bond that
A) pays interest annually and its face value at maturity.
B) pays interest in perpetuity and never matures.
C) pays no interest but pays its face value at maturity.
D) rises in value as its yield to maturity rises.
Answer: B
62) (I) The average lifetime of a debt security's stream of payments is called duration.
(II) The duration of a portfolio is the weighted average of the durations of the individual securities, with the weights
reflecting the proportion of the portfolio in
The Fisher equation states that
A) the nominal interest rate equals the real interest rate plus the expected rate of inflation.
B) the real interest rate equals the nominal interest rate less the expected rate of inflation.
C) the nominal interest rate eq
Making Capital Investment
Decisions
CHAPTER 10
Maram Alnumay
Key Concepts and Skills
Understand how to determine the relevant cash
flows for various types of proposed investments
Understand the various methods for computing
operating cash flow
Relevant
Raising Capital
CHAPTER 15
Maram Alnumay
Key Concepts and Skills
Understand the venture capital market and its role in
financing new businesses
Understand how securities are sold to the public and
the role of investment bankers
Understand initial publi
201FIN: Tutorial 2
Chapter 2: Financial statements and cash flow
Questions 1.
What does liquidity measure? Explain the trade-off a firm faces between high liquidity and
low liquidity levels.
Questions 2.
Why might the revenue and cost figures shown on a s