Final Exam Corporate Finance FINC 650 1. Which of the following is not considered a capital component for the purpose of calculating the weighted average cost of capital as it applies to capital budgeting? a. b. c. d. e. Long-term debt. Common stock. Short-term debt used to finance seasonal current assets. Preferred stock. All of the above are considered capital components for WACC and capital budgeting purposes. 2. A company has a capital structure which consists of 50 percent debt and 50 percent
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Corporate Finance: An Introduction (Welch) Chapter 1 Introduction 1.1 The Goal of Finance: Relative Valuation 1) Which of the following statements is true? A) In finance‚ it is important to determine an asset ’s absolute value. B) The relative value of any asset is‚ at best‚ a lucky guess. C) The true value of an asset is unaffected by externalities such as interest rate levels‚ the state of the economy‚ etc. D) Valuation is not an exact science
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retailers in the U.S. by sales. In its most recent year in 2012‚ Target who has proclaimed itself as “cheap chic” produced over $70 billion in revenue through the sales of apparel‚ house wares‚ electronics and other products (Exhibit 5). At Target‚ corporate governance practices have been in place for more than 50 years‚ and continue to evolve to balance the interests of the Board‚ shareholders and management to maximize efforts. A majority of the 12-member Board is independent and selected based on
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Name of the Researcher – Dr. Y. S. Vaishampayan Abstract: The Role of Subsidiary Companies from the Perspectives of Growth and Development THEME - Role of Competition‚ Flexibility and Trade in Economic Growth This Research Paper throws light on the efforts of Indian corporations in their objectives of maximization of shareholders wealth. To achieve this‚ they have taken the route of subsidiarization. This Paper only takes the results achieved by Indian business corporations in fulfilling
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questions of corporate finance? a. Investment decision (capital budgeting): What long-term investment strategy should a firm adopt? b. Financing decision (capital structure): How much cash must be raised for the required investments? c. Short-term finance decision (working capital): How much short-term cash flow does company need to pay its bills. ( Describe capital structure. Capital structure is the mix of different securities used to finance a firm’s investments
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CORPORATE FINANCE – CONCEPT QUESTIONS Class Notes - Introduction to Corporate Finance 1. Finance point of view: Corporation: a money processing machine? * Product markets: everything what corporates make (lead with customers‚ suppliers‚ labor) * Capital markets: generic term for the entities which supply cash to this money processing machine‚ and the processing machine uses the money to do things and then periodic sends money back to the capital market there are inflows from the
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Problems form Corporate Finance 1. Compute the following: Present Value | Years | Interest Rate | Future Value | $227‚382 | 20 | 5 | | | 16 | 17 | $886‚073 | $25‚000 | 18 | | $143‚625 | $1‚941 | | 5 | $3‚700 | 2. At 9 percent interest‚ how long does it take to double your money? To quadruple it? 3. In 2006‚ a gold $3 coin minted in 1879 was auctioned for $9.000. For this to have been true‚ what was the annual increase in the value of the coin? 4. You can earn 0
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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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of planning and managing a firm’s long-term investments is called: A. B. C. D. E. working capital management. financial depreciation. agency cost analysis. capital budgeting. capital structure. 4. The mixture of debt and equity used by a firm to finance its operations is called: A. B. C. D. E. working capital management. financial depreciation. cost analysis. capital budgeting. capital structure. 5. The management of a firm’s short-term assets and liabilities is called: A. B. C. D. E. working capital
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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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