Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

BEC Exam > B2 Stuff > Flashcards

B2 Stuff Flashcards

1
Q

What is the Weghted Average Cost of Capital by Definition

A

its the avg. cost of both debt and equity financing related to assets and shit that already exists

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

After tax cost of debt formula?

A

Pretax Cost of debt x (1-TAX RATE)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Cost of preferred Stock Formula

A

Dividend from PS / Net Proceeds from PS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

LEMME KNOW THE RETAINED EARNINGS USING CAPM METHOD GIMME THAT EQUATION

A

Risk Free Rate + (Beta* (Market Rate - Risk Free Rate)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

WHAT THAT COST OF RETAINED EARNINGS USING SOME DISCOUNTED CASH FLOW METHOD

A

(Dividend at end of year one / Current market value of O/S stock) + growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Whats the cost of RE under that bond yield plus risk premium equation

A

Pretax cost of Debt + Mrkt Risk Premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

WACC Formula?

A

Cost times weight of LTD, CS, and PS.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Lemme know that difference between operating leases and finance leases talking bout the recording and shit

A

Operating- ROUA & Lease Liability Recorded for the Lesssee. Amortize the shit out of the ROUA and a lease expense hits the I/S

Finance Lease: lessee records ROUA & Lease Liability. Then these fuckers make payments of interest and principle. This means theres now a Interest Expense on the I/S and the lease liability is paid down.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The fuck is the difference between a debenture and a subordinate debenture?

A

Debenture is unsecured obligation issued by someone….Subordinate is a bond issue that just ranks a tad higher in terms of liquidations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Why are debt covenants used

A

basically company A lends to company B but established this covenant to company B saying they cant lend to others or do some certain financing activities because their management are fucking idiots who need to be restricted.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Operating Leverage?

A

company uses fixed costs (salaray, depreciaion, etc…) instead of variable ones

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Financial Leverage?

A

Means the company uses debt to finance shit….this leverage is basically how it impacts the % change in EBIT and EPS.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Working Capital Equation

A

Current Assets - Current Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Lemme see that Cash Conversion Cycle Formula

A

Days in Inventory + Days Sales in AR - Days Payables Outstanding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Inventory turnover and Days in Inventory Equations?

A

Inv. Turn. = COGS / Avg. Inv

Days in Inv. = End Inv. / (COGS / 365)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

AR Turnover?

Days Sales in AR?

A

AR Turnover = Net Sales / Avg. AR

Days sales in AR = Ending AR / (Net Sales / 365)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

AP Turnover
&
Days of Payables Outstanding Equation

A

AP TURNOVER: COGS / Avg. AP

DAYS of payables O/S= End AP / (COGS / 365)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

How can a pimp defer some damn payments?

A

Defer payments, drafts, lines of credit, zero balance accts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

APR for Quick payment discounts equation

A

(360/ (pay period - discount period)) x (Dicount % / (100% - Disc. %))

20
Q

Reorder Point equation

A

Safety Stock + (Lead Time * Sales)

21
Q

EOQ Formula

A 
Two SOC
SQRT of (2SO / C)

Sales in Units
Order Cost (per P.O)
Carrying Cost per unit

22
Q

What the fuck is factoring? How does it speed up cash?

A

Company sells off an Accounts receivable to a third-party (a factor) for cash now usually a % of the receivable and will be charged interest. The factor then becomes responsible for collections.

23
Q

Three dank motives for holding cash

A

Transaction Motives: have enough cash for regular transcations

Speculative Motive: Have enough cash to take advantage of possible oppurtunities

Precautionary MotivesL have enough doe as a cushion in case some bullshit happens

24
Q

How can you speed up collections

A

screen customers, bill on time, give discounts (expensive), factor the AR

25
Q

Pros and Cons of short term financing

A

Pro: Liquidity, prfitability, lessens financing costs
Cons: More Interest rate risk, less available capital

26
Q

Pros and Cons of long term financing

A

Pro: Less Interest Rate Risk, More availbale capital
Cons: Less Liquid & Profitable, More financing costs

27
Q

difference between line and letter of credit

A

Line of credit is a loan with a bank that is defined and can be renewed before expiring

Letter of credit like a garuntee (usually made by a bank) that someone can pay off a debt, and is essentially a credit enhancement. Like I would not extend a letter of credit for craig.

28
Q

Present Value Equation

A

FV / (1+r) ^n

29
Q

Present Value of an Annuity Equation

A

PMT x [1 - (1/(1+r)^n)] / r

30
Q

The fuck is the gordon growth dividend discount model and what the fuck is the equation

A

Stocks will pay dividends in the future and grow at a constant rate.

Price @ t = Dividend @ t+1 / (Required return - growth rate)

31
Q

What are price multiples and what are 4 price multiple ratios?

A

They are used in stock valuations by using a ratio of market price to another value. it gves the intrinsic (true) value of stocks and leads to if the stock is over/under valued:

P/E Ratio
Cash to sales ratio
Price to cash flow ratio
Price to book ratio

32
Q

The frick is discounted cash flow analysis and some methods of it

A

tries to find the intrinsic value of a sock through the PV of future was flows. The Disc. Cash Flow stock price is found and then compared to market price to tell how its valued. Methods:

Dividend Discount Model
Free cash flow to firm
Free cash flow to equity
Residual income

33
Q

DUDE WHAT is even an option?

A

pretty much a contract that allows the holder to buy (call option) or sell (put option) a stock/other asset

34
Q

4 methods of valuation for tangible

A

Cost: OG cost paid
Market Value: replacement cost or NRV
Appraisal: appraise that bitch
Liquidation: what you could get for it if you sold today

35
Q

3 methods of vlauation for intangible

A

MArket: arms-length sale in market of related good
Income: Discount Future cash flows to present value
Cost: based on replacment cost

36
Q

After tax flow equation

A

Pretax cash flow x (1-Tax rate)

37
Q

wtf how do you find a depreciable tax shield aka tax savings

A

Tax Rate x Depreciation Deduction

38
Q

three general stages of a capital investment

A

Inception of project (largest $$)
operating
Disposal

39
Q

What is NPV, how do you tell if its good

A

difference of PV between inflows and outflows of a project… + NPV is good….-NPV is bad

40
Q

When should a project be taken on in terms of the IRR

A

If IRR is greater than Hurdle Rate

41
Q

Payback Method Formula

A

Net intital Investment / Increase in Annual Net After Tax Cash Flow

42
Q

P/E ratio is:

A

Current Stock Price / Expected EPS

43
Q

PEG Ratio:

A

Price Earnings Ratio / (Growth Ratex100)

44
Q

Price to Sales:

A

Current Stock Price / Expected Sales Per share

45
Q

Price to cash flow:

A

Current Stock Price / Expected Cash Flow per Share

46
Q

Price to Book Value:

A

Current Stock Price / Book Value Per Share

BEC Exam (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions