http://helpyoustudy.info Chapter 01 - Introduction to Corporate Finance Chapter 01 Introduction to Corporate Finance Answer Key Multiple Choice Questions 1. Which one of the following terms is defined as the management of a firm ’s long-term investments? A. working capital management B. financial allocation C. agency cost analysis D. capital budgeting E. capital structure Refer to section 1.1 AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Capital budgeting
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1.1 The Role of The Financial Manager LEARNING OBJECTIVE 1 Identify the key financial decisions facing the financial manager of any business firm. The financial manager is responsible for making decisions that are in the best interests of the firm’s owners‚ whether the firm is a start-up business with a single owner or a billion-dollar corporation owned by thousands of stockholders. The decisions made by the financial manager or owner should be one and the same. In most situations this means
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CORPORATE FINANCE Formative Assessment Some reading: Adams‚ R. B.‚ Hermalin‚ B. E.‚ and Weisbach M. S. (2010) The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey‚ Journal of Economic Literature‚ Vol 48‚ No.1‚ pp. 58–107. Aggarwal‚ R. et al (2009) Differences in governance practices between US and foreign firms: measurement‚ causes and consequences‚ Review of Financial Studies‚ Vol. Bhagat‚ S.‚ and Bolton B. (2008) Corporate Governance and Firm
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MenuItem 10: (Topic 10) Medium- to long-term debt Question 1: Manufacturer Limited is seeking a five-year term loan from its bank. The bank manager has indicated that a loan can be provided and will be priced at the bank’s base rate‚ plus a margin. Which of the following is not a determinant of the margin to be paid by the company? A: the debt to equity ratio of the borrower B: the borrower’s past loan-repayment performance C*: the term structure of interest rates D: the assets available to
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Having studied this chapter you will be able to: Evaluate the potential value added to a firm arising from a specified capital investment project or portfolio using the net present value model. Project modelling should include explicit treatment of: (a) Inflation & specific price variation (b) Taxation including capital allowances and tax exhaustion (c) Single & multi-period capital rationing to include the formulation of programming methods and the interpretation of their output (d) Probability
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Chapter 01 Introduction to Corporate Finance Multiple Choice Questions 1. The person generally directly responsible for overseeing the tax management‚ cost accounting‚ financial accounting‚ and information system functions is the: A. treasurer. B. director. C. controller. D. chairman of the board. E. chief executive officer. 2. The person generally directly responsible for overseeing the cash and credit functions‚ financial planning‚ and capital expenditures is the: A. treasurer. B. director
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Question 1 Reliable Gearing currently is all-equity financed. It has 10‚000 shares of equity outstanding‚ selling at $100 a share. The firm is considering a capital restructuring. The low-debt plan calls for a debt issue of $200‚000 with the proceeds used to buy back stock. The high debt plan would exchange $400‚000 of debt for equity. The debt will pay an interest rate of 10%. The firm pays no taxes. a. What will be the debt-to-equity ratio after each possible restructuring? b. If earnings
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established between the holding companies and their subsidiaries. In a nutshell‚ the researcher exploited the subject for this study in context of the following two questions: 1) Do subsidiaries help financially a holding company in achieving the primary target or objective of growth? 2) If yes‚ then how and to what extent? These questions have been answered on the basis of collection of available data‚ analysis of facts‚ and conclusions drawn. BRIEF INTRODUCTION OF THE RESEARCHER NAME - DR
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Towson University Department of Finance Fin331 Dr. M. Rhee 2010 Spring NAME: ID#: 1. If the interest is compounded quarterly with 8% APR‚ which of the following statements is CORRECT? a. The periodic rate of interest is 2% and the effective rate of interest is 4%. b. The periodic rate of interest is 8% and the effective rate of interest is greater than 8%. c. The periodic rate of interest is 4% and the effective rate of interest is less than 8%. d. The periodic rate of interest is 2% and
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CORPORATE FINANCE EXERCISE 2012-2013 ---------------------------------------------------------------------------------------------------------------------------------CHAPTER 4. ASSETS IN A COMPANY EXERCISE 1 In order to run the business effectively‚ Enterprise X purchased a set of 4 computers by the beginning of Year N+1. Its purchasing price is 15 million VND per item (excluding VAT). The total transportation and testing cost is 5 million VND. Their estimated useful life is 5 years. Required:
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