Corporate Finance

Question 1

Average Accounting Rate of Return (AAR)

Answer 1

Question 2

Profitability Index (PI)

Answer 2

Question 3

Weighted Average Cost
of Capital (WACC)

Answer 3

Question 4

Tax shield

Answer 4

Question 5

Cost of Preferred
Stock

Answer 5

Question 6

Cost of Equity
(Dividend discount model
approach)

Answer 6

Question 7

Growth Rate

Answer 7

Question 8

Cost of Equity
(Bond yield plus risk premium)

Answer 8

Question 9

Capital Asset Pricing
Model (CAPM)

Answer 9

Question 10

Beta of a Stock

Answer 10

Question 11

Pure-play Method Project
Beta (De-lever)

Answer 11

Question 12

Pure-play Method for
Subject Firm (Re-lever)

Answer 12

Question 13

Adjusted CAPM (for country risk premium)

Answer 13

Question 14

Country Risk Premium

Answer 14

Question 15

Break Point

Answer 15

Question 16

Degree of Operating Leverage

Answer 16

Question 17

Degree of Financial Leverage

Answer 17

Question 18

Degree of Total Leverage

Answer 18

Question 19

Return on Equity (ROE)

Answer 19

Question 20

The Breakeven Quantity of Sales

Answer 20

Question 21

Operating Breakeven Quantity of Sales

Answer 21

Question 22

Current Ratio

Answer 22

Question 23

Quick Ratio

Answer 23

Question 24

Accounts Receivable Turnover

Answer 24

Question 25

Number of Days of Receivables

Answer 25

Question 26

Inventory Turnover

Answer 26

Question 27

Number of Days of Inventory

Answer 27

Question 28

Payables Turnover

Answer 28

Question 29

Number of Days of Payables

Answer 29

Question 30

Net Operating Cycle

Answer 30

Question 31

Yield on a Bank Discount Basis (BDY)

Answer 31

Question 32

Effective Annual Yield (EAY)

Answer 32

Question 33

Holding Period Return

Answer 33

Question 34

Cost of Trade Credit

Answer 34

Question 35

Cost of Borrowing

Answer 35