BEC Unit 2 Module 1 Flashcards
1
Q
CAPM
A
RF Rate + (Beta x (Market - RF Rate)
2
Q
Net After Tax Cost of Debt
A
Pretax Cost of Debt x (1 - tax rate)
3
Q
Basis Point
A
1/100 of 1% (1% of 1%)
4
Q
Market Rate of Interest
A
RF Rate + Inflation Premium
5
Q
Discounted Cash Flow (DCF)
A
(Dividend per share at the end of one year/Current Market Value) + Growth
6
Q
Market Capitalization
A
of Common Shares Outstanding x Fair Market Value
7
Q
Beta
A
Volatility of Stock relative to market
8
Q
Cost of Preferred Stock
A
Preferred Stock Rate/Net Proceeds of Preferred Stock
9
Q
Times-Interest-Earned Ratio
A
EBIT/Interest Expense
