Oral Recitation Flashcards

1
Q
  • process of creating and managing
  • about stock
  • stock represent ownership ng isang individual sa isang company
A

Equity Management

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

process of registering a company’s stock for sale

A

Stock Registration

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

What are the basic requirements for primary registration of stock corporations?

A
  1. Cover sheet
  2. Reservation payment confirmation
  3. Articles of Incorporation
  4. By-Laws (BL)
  5. Treasurers affidavit (for stock)
  6. Joint Undertaking change Name
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the schedule of Availability of Service?

A

8:00-5:00 pm (Monday to Friday without noonbreak)

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

Who may avail the service?

A

all applicants corporations thru their representatives

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

What are the additional requirements for registering stock?

A
  1. Endorsement/clearance from other government agencies
  2. Clearance from other department of the commission
  3. For corporations with more than 40% foreign equity: application form for registration under the foreign investments act of 1991
  4. Endorsement/clearance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What business activity requires clearance from other SEC department and endorsement from other government agencies?

A
  • Investment company financing and lending companies issuers of proprietary
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the business requiring endorsement from other government agencies?

A

• electric power plant/ trading of petroleum products - dept of energy
• hospital, dental, medical clinics - dept of health

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

Steps to avail services

A

companies and it’s not available to investment and development stage (such as “bank check”) companies. Anyone using this exemption must also create an offering circular, similar to the one that would be requiring for a registered offering

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

Securities can only be sold under this to an accredited investor. An accredited investor is one whom the issuing company reasonably believes falls within any of these categories at the time if the securities sale:
1. A bank broker dealer, insurance company, investment company or employee benefit plan
2. A director, executive officer, or general partner of the issuing company
3. A person whose individual net worth (or joint worth with a spouse) exceeds 1 million dollars

A

Regulation D Exemption

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q
  • the policies described below apply to a company’s use of the regulation A or D exemptions
  • All unregistered securities issued by the company must carry a restrictive legend, specifying that they cannot be traded.
A

Equity Policies

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

determine a sufficient number of authorized and unused shares available for distribution by comparing the authorized number of shares listed in the articles of Incorporation to the share total reported by the company’s stock transfer agent

A

Verify available authorized shares

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

the board minutes should reflect the approval of a stock offering that includes the minimum and maximum allowed amounts of funding and the approximate terms of the offering

A

Verify Board Authorization

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

the SEC can and will reject any registration documents if information is not presented exactly in accordance with its instructions

A

Have due diligence officer review all sec filings

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

the treasurer authorizes the issuance of shares to new investors by completing a form letter to the company’s stock transfer agent.

A

Verify contents of security authorization letter

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

process of choosing and selecting and managing investments to meet specific goals of the company, while considering factors like risk and return

A

Investment Management

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

a group of people with great entrepreneurial potential. Also, a team with passion for and committed to the new business idea

A

Management Team

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

Must have a strategy to capture a significant market share or revenue

A

Market Opportunity

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

funds must be used to accelerate the company’s achievement or key milestones that increase the company’s value

A

Use of proceeds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

must have a plan to generate significant profits beyond the initial product idea

A

Growth Potential

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

must have some proprietary features that distinguish the company from potential customers

A

Competitive Advantage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

includes significant executive experience in a variety of fields. A company should atleast be composed of a pool of professionals in allied fields

A

Strategic Fit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

invest in first of a kind new ideas, rather than incremental enhancements to common products and services

A

Technology

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

must show that specific steps of operational strategy that will take to achieve the exit

A

Exit Strategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q
  • refers to a financial instrument that represents a promised future payment from a bank
  • short-term instruments that generally come with a maturity between 30 days and 180 days
A

Banker’s Acceptance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

it tends to have minimal risk of loss(or gain) on the principal amount of an investment since it has low risk interest rates that will change in short time period left before the maturity date of the bond

A

Bonds near maturity dates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

type of savings account that pays a fixed interest rate on money held for an agreed upon period of time

A

Certificate of Deposit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q
  • a common form of unsecured short term debt issued by a corporation
  • most commercial paper matures in 30 days or less and rarely matures greater than 270 days
A

Commercial Paper

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q
  • package of government instrument usually composed of Treasury bills, notes and bonds that is assembled by a fund management company
A

Money Market Fund

30
Q

short term agreement to sell securities and repurchase them later at a slightly higher price

A

Repurchase Agreement

31
Q
  • us government issues a variety of notes with maturity dates that range from:
  • Less than a year (US Treasury Certificate)
  • 1-5 years (notes)
  • more than 5 years (bonds)
A

US Treasury Issuances

32
Q

bank uses the earnings from idle balances to offset its service fee. If a company has minimal cash balances, then this is not an entirely bad strategy

A

Earning Credit Strategy

33
Q

matches the maturity date of an investment to the cash flow availability dates listed on the cash forecast

A

Matching Strategy

34
Q

involves creating a set of Investments that have a series of consecutive maturity dates

A

Laddering Strategy

35
Q

requires the treasurer to determine what cash is available for short, medium, and long term investment and to adopt different investment criteria for each of these investment tranches. The exact investment criteria will vary based on company’s individual needs

A

Tranched Cash Flow Strategy

36
Q

a strategy buying a long term securities and selling them prior to their maturity dates. This strategy works when interesr on short term securities are lower than the rates on long term securities

A

Riding the yield curve strategy

37
Q

the treasurer buys the debt of a company that may be on the verge of having its credit rating upgraded

A

Credit Rating Strategy

38
Q

it avoid investments in the securities of any single entity, in favor of investments solely in one or more money market funds

A

Risk Reduction Strategy

39
Q

is an independent agency created by the US Congress to maintain stability and public confidence in the nation’s financial system

A

FDIC (Federal Deposit Insurance Corporation)

40
Q
  • it is the easiest, most convenient way to access FDIC insurance on large deposits. It helps people with large bank deposits keep their money insured by staying below
A

CDARS (Certificate of Deposit Account Registry Service)

41
Q

It is the system of controls for investments

A
  1. Cash forecast
  2. Request for interest rate quotations
  3. Investment authorization form
  4. Investment Transaction Report
  5. Investment File
42
Q

used to define the level of risk that a company is willing to tolerate and defines the exact types of investment vehicles to be used (or not to be used)

A

Investment Management Policies

43
Q

Many companies have decided that they are not in the business of making investments, and so they avoid all risk, even though the may be losing a significant amount of investment

A

Risk management

44
Q

unsecured debt that is issued by a company and has a fixed maturity ranging
from 1 to 270 days. A company uses this to meet its short- term working capital
obligations. It is commonly sold at a discount from face value, with the discount (and therefore the
interest rate) being higher if the term is longer. A company can sell its commercial paper directly to
investors, such as money market funds, or through a dealer in exchange for a small commission

A

Commercial Paper

45
Q

is a financial transaction in which a company sells its accounts receivable to a finance
company that specializes in buying receivables at a discount ). Accounts receivable
______ is also known as invoice ______ or accounts receivable financing.

A

Factoring

46
Q

uses a company’s inventory as collateral for a loan. The inventory to
be used as collateral is segregated from the rest of the inventory by a fence, and all inventory
movements into and out of this area are tightly controlled. Alternatively, the inventory may be stored
in a public warehouse. State lien laws typically require that signs around the segregated area clearly
state that there is a lien on the inventory stored inside. It is highly transaction intensive and
recommended only for those companies that have exhausted all other less expensive forms of
financing.

A

Field Warehouse Financing

47
Q

is a method of financing inventory purchases, where a lender pays for assets that
have been ordered by a distributor or retailer, and is paid back from the proceeds from the sale of
these items. The arrangement is most commonly used when large assets, such as automobiles or
household appliances, are involved. The entity at risk in this arrangement is the lender, which is
relying upon the sale of the underlying assets in order to be repaid.

This is a way for stores to stock up on products without paying for them right away. A lender buys the products for the store, and the store pays the lender back after selling the products.

A

Floor Planning

48
Q

covers the purchase of a specific asset, which is paid for by the provider on the
company’s behalf. In exchange, the company pays a fixed rate, which includes interest and principal,
to the leasing company. It may also be charged for personal property taxes on the asset purchased.

A

Lease

49
Q

– is a lease in which the lessor only finances the lease, and all other rights of
ownership transfer to the lessee, resulting in the recording of the underlying asset as the
lessee’s property in its general ledger. The lessee can only record the interest portion of a
capital lease payment as expense, as opposed to the amount of the entire lease payment in the case of a normal lease

This is a type of lease where the person renting (lessee) essentially becomes the owner of the asset for accounting purposes, recording it as their own property. The company providing the lease (lessor) just finances it. The lessee can only list the interest part of each payment as an expense, unlike a regular lease where the whole payment is an expense.

A

Capital lease

50
Q

under the terms of which the lessor carries the asset on its books and
records a depreciation expense, while the lessee records the lease payments as an expense
on its books. This type of lease typically does not cover the full life of the asset, nor does the
buyer have a small - dollar buyout option at the end of the lease.

A

Operating Lease

51
Q

– a commitment from a lender to pay a company whenever it needs cash, up to a
preset maximum level. It is generally secured by company assets, and for that reason bears an
interest rate not far above the prime rate. It is a flexible loan from a bank or financial institution and a
defined amount of money that you can access as needed and then repay immediately or over a
prespecified period of time. It will charge interest as soon as money is borrowed, and borrowers
must be approved by the bank.

It is an agreement where a bank allows a company to borrow money as needed, up to a certain limit. The company uses its assets as security, and it only pays interest on the money it actually borrows. The company can pay back the money right away or over time. The bank must first approve the company for this arrangement.

A

Line of Credit

52
Q

is a loan that uses fixed assets or inventory as its collateral is a
common form of financing by banks. Loans may also be issued that are based on other
forms of collateral, such as the cash surrender value of life insurance, securities, or real
estate

A

Asset Based Loans

53
Q

is a fixed-income instrument since these traditionally paid a fixed interest rate
(coupon) to debtholders. Variable or floating interest rates are also now quite common. It is
also referred to as a certificate of indebtedness.

A

Bonds

54
Q

a bond that uses as collateral a company’s security investments.

A

Collateral Trust Bond

55
Q

a bond that can be converted to stock using a predetermined
conversion ratio. The presence of conversion rights typically reduces the interest cost of
these bonds, since investors assign some value to the conversion privilege.

A

Convertible Bonds

56
Q

a bond issued with no collateral. A subordinated _____ is one that
specifies debt that is senior to it.

A

Debenture

57
Q

a bond that provides for either reduced or no interest in the
beginning years of the bond term, and compensates for it with increased interest later
in the bond term. Since this type of bond is associated with firms having short - term
cash flow problems, the full-term interest rate can be high.

A

Deferred Interest Bond

58
Q

bond whose terms allow purchasers to convert them to common
stock, as well as any accrued interest. The reason for its “death spiral” nickname is
that bondholders can convert some shares and sell them on the open market, thereby
supposedly driving down the price and allowing them to buy more shares, and so on.

A

Floorless Bond

59
Q

bond whose payments are guaranteed by another party.
Corporate parents will sometimes issue this guarantee for bonds issued by
subsidiaries in order to obtain a lower effective interest rate.

A

Guaranteed Bond

60
Q

a bond that pays interest only if income has been earned. The income
can be tied to total corporate earnings or to specific projects. If the bond terms
indicate that interest is cumulative, then interest will accumulate during nonpayment
periods and be paid at a later date when income is available for doing so.

A

Income Bond

61
Q

a bond offering can be backed by any real estate owned by the
company (called a real property _______), or by company - owned equipment
(called an equipment bond), or by all assets (called a general ______).

A

Mortgage Bond

62
Q

– a bond issuance where a portion of the total number of bonds are paid off
each year, resulting in a gradual decline in the total amount of debt outstanding.

A

Serial Bond

63
Q

A bond whose stated interest rate varies as a percentage of a
baseline indicator, such as the prime rate. Treasurers should be wary of this bond
type because jumps in the baseline indicator can lead to substantial increases in
interest costs

A

Variable rate Bond

64
Q

– a bond with no stated interest rate. Investors purchase these
bonds at a considerable discount to their face value in order to earn an effective
interest rate

A

Zero Coupon Bond

65
Q

– a bond that offers no interest rate on its face but allows
investors to convert to stock if the stock price reaches a level higher than its current
price on the open market. The attraction to investors is that, even if the conversion price to stock is marked up to a substantial premium over the current market price of
the stock, a high level of volatility in the stock price gives investors some hope of a
profitable conversion to equity. The attraction to a company is that the expectation of
conversion to stock presents enough value to investors that they require no interest
rate on the bond at all, or at least will only purchase the bond at a slight discount from
its face value, resulting in a small effective interest rate.

A

Zero Coupon Convertible Bond

66
Q

– is a form of short - term loan that is granted by a lending institution on the
condition that the company will obtain longer-term financing shortly that will pay off the thru this. This option is commonly used when a company is seeking to replace a construction
loan with a long-term note that it expects to gradually pay down over many years. This type
of loan is usually secured by facilities or fixtures in order to obtain a lower interest rate.

A

Bridge Loan

67
Q

usually extended by governments to guarantee
bank loans to finance a company’s working capital needs in geographic areas to attain social
improvement.

A

Economic Development Authority Loans

68
Q

are highly desirable form of financing, since a company can lock in a
favorable interest rate for a long time, and keeps it from having to repeatedly apply for shorter
- term loans during the intervening years, when business conditions may result in less
favorable debt terms.

A

Long-term loans

69
Q

a well-established funding method whereby assets such as trade
receivables, credit card receivables, or other financial assets are packaged, underwritten and sold in
the capital markets in the form of asset-backed securities

A

Receivables Securitization

70
Q

an arrangement in which the company that sells an asset can lease back that
same asset from the purchaser. With a leaseback—also called a _____—the details of the
arrangement, such as the lease payments and lease duration, are made immediately after the sale
of the asset. In a sale-leaseback transaction, the seller of the asset becomes the lessee and the
purchaser becomes the lessor.

A

Sales and Leaseback

71
Q

a company that assigns credit ratings, which rate a debtor’s ability to pay back
debt by making timely principal and interest payments and the likelihood of default. An agency may rate
the creditworthiness of issuers of debt obligations, of debt instruments, and in some cases, of the
servicers of the underlying debt, but not of individual consumers.

A

Credit Rating Agency