Finance Flashcards
What is the CAPM formula?
It is the expected return on the investment portfolio, the formula is:
Expected Return = Risk Free Rate + Beta * Risk Premium Rate
If there is a going concern issue, what valuation method would you use?
Liquidation approach
A business that has relatively stable earnings that approximate discretionary cash flows would be valued based on
Capitalized earnings approach
What is a future contract?
A future contract is contract that locks in a certain amount that is easily liquidated at a future date giving the user certainty to a set amount.
What is a conglomerate acquisition?
It involves a buying firm acquiring another firm within another industry to increase diversification.
What is a conglomerate acquisition?
It involves a buying firm acquiring another firm within another industry to increase diversification.
