Revisions Questions – ACFI2005 Question One Banks invest in financial securities that they hold in their securities portfolio. A proportion of these securities may be government securities. Government securities are regarded as essentially risk-free and therefore pay a low rate of return. Why then do banks invest in this type of security? • primary source of liquidity—government securities easily converted into cash • invest short-term surplus funds—securities provide a return‚ cash does
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International finance FIN 412 Exam #2 MC: Examples of "single-currency interest rate swap" and "cross-currency interest rate swap" are: A. fixed-for-floating rate interest rate swap‚ where one counterparty exchanges the interest payments of a floating- rate debt obligations for fixed-rate interest payments of the other counter party B. fixed-for-fixed rate debt service (currency swap)‚ where one counterparty exchanges the debt service obligations of a bond denominated in one currency for
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9-207-107 REV: OCTOBER 1‚ 2007 BENJAMIN C. ESTY ALDO SESIA‚ JR. An Overview of Project Finance and Infrastructure Finance—2006 Update This note provides an introduction to the fields of project finance and infrastructure finance as well as a statistical overview of project-financed investments over the last five years. Examples of project-financed investments include the $4 billion Chad-Cameroon pipeline‚ $6 billion Iridium global satellite telecommunications system‚ €900 million A2
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100% (15 out of 15 correct) | Responses to questions are indicated by the symbol. | | | 1. | An SSU’s A. | income and expenditures for the period are equal. | B. | income for the period exceeds expenditures. | C. | expenditures for the period exceed receipts. | D. | spending is entirely financed by credit cards | A surplus position is when income for the period exceeds planned expenditures. (see page 7). | | 2. | Which of the following is an example of indirect financing
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Task 1 Identify the different sources of finance available to Mr Norman for buying the new online learning system to expand his service business. There are many different sources of finance available to Mr Norman for investment in order to expand his business. These include: Using personal savings to invest in the business growth Raising equity through issue of new shares. Short term bank loan Long term bank loan Bank overdraft Using retained earnings from the profits earned in the past
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Source of finance Match the source with advantages and disadvantages State if advantage/disadvnatage ordinary share capital: money given to a company by shareholders in return for a share certificate‚ which gives them part ownership of the company and entitles them to a share of the profits 21.Increasing ordinary share capital can make it easier to borrow more funds from a bank as the share capital can purchase assets that can be used as collateral. advantage 22.Bringing new shareholders
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MANAGERIAL FINANCE TWELFTH EDITION LAWRENCE J. GITMAN SAN DIEGO STATE UNIVERSITY PEARSON Prentice Hall Boston San Francisco New York London Toronto Sydney Tokyo Singapore Madrid Mexico City Munich Paris Cape Town Hong Kong Montreal Contents Preface xxxi Revised Content xxxiii Supplements to the Twelfth Edition Acknowledgments To the Student xxxvii xl xliii Part One Introduction to Managerial Finance 1 Chapter 1 The Role and Environment of Managerial Finance page 2 1.1 Finance and Business
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Case Studies in Finance: Managing for Corporate Value Creation Fourth Edition July‚ 2002 Robert F. Bruner Distinguished Professor of Business Administration Darden Graduate School of Business Administration University of Virginia Post Office Box 6550 Charlottesville‚ Virginia 22906 Email: brunerr@virginia.edu Web site: http://faculty.darden.edu/brunerb/ ABSTRACT: This book presents 46 case studies in finance‚ targeted toward upper-level undergraduates and introductory and intermediate-level MBA
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CHAPTER 9 THE COST OF CAPITAL (Difficulty: E = Easy‚ M = Medium‚ and T = Tough) Multiple Choice: Conceptual Easy: Capital components Answer: c Diff: E [i]. Which of the following is not considered a capital component for the purpose of calculating the weighted average cost of capital (WACC) as it applies to capital budgeting? a. Long-term debt. b. Common stock. c. Accounts payable and accruals. d. Preferred stock. Capital components Answer: d
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Integrative—WACC‚ WMCC‚ and IOS. Cartwell Products has compiled the data shown in the following table for the current costs of its three basic sources of capital—long-term debt‚ preferred stock‚ and common stock equity—for various ranges of new financing. Source of Capital Range of New Financing After Tax Cost Long-term debt $0 to 320‚000 6% $320‚000 and above 8% Preferred stock $0 and above 17% Common stock equity $0 to $200‚000 20% $200‚000 and above 24%
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