Brainscape's Knowledge GenomeTM

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


See full index

MBA 5600 - Finance > Test 1 Notes > Flashcards

Test 1 Notes Flashcards

You may prefer our related Brainscape-certified flashcards:
Series 65 flashcards Series 63 flashcards Series 66 flashcards Series 7 Top-off Exam flashcards SIE Exam flashcards CFA flashcards Series 79 Top-Off Exam flashcards
1
Q

study of the funding of a firm’s operating assets.

A

Finance

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

Cash flows from operations are positive

A

Cash Flow Positive

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

responsible for the right side of the balance sheet and for financial reporting and decision making in a corporation. Make sure the firm has adequate funding for its operations, make sure the firm meets all financial reporting requirements and prepare a firm’s financial plan.

A

Chief Financial Officer (CFO)

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

responsible for the left side of a firm’s balance sheet.

A

Chief Operating Officer (COO)

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

where suppliers and demanders of capital interact to promote capital formation. Where corporate finance and investments come together.

A

Capital Markets

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

the speed, volume, and accuracy of information flows into the capital markets and the influence of information on prices of financial instruments traded in the capital markets. A financial market is said to be more efficient if market prices reflect all currently available information and if market prices react to new information very fast.

A

Market Efficiency

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

providing enough information about a company to provide decision makers doing their due diligence with information to make a decision.

A

Disclosure

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

ability of the reader to clearly figure out how the company is doing.

A

Transparent

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

inefficiencies in financial market prices result in one group of people having knowledge that others do not have.

A

Asymmetric Information

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

market value of the firm’s equity. Price per share of stock times the number of common shares outstanding.

A

Market Capitalization

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

refers to a firm being a good citizen within the community where the citizen does the things that will not put the firm at risk of going out of business.

A

Corporate Sustainability

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

the interest of both parties is best served by designing a loan structure that matches the expected cash inflows of a firm to the maturity date of the loan.

A

Maturity Matching Principle

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

term used to indicate that real property is committed by a borrower to back a loan.

A

Collateral

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

the higher the risk the higher the expected return. The lower the risk, the lower the expected return.

A

Principal of Risk and Return

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

Assets - Debts

A

Net Worth

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

the value today of the future expected cash flows. The most you will be willing to pay today for a future cash flow or series of cash flows given a certain rate of required return.

A

Discounted Value or Present Value

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

a compound rate of return that is taken out of the series of cash flows you construct each compounding period you select.

A

Discount Rate

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

the amount you expect to accumulate or an amount you might be required to repay in the future.

A

Future Values

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

series of equal cash flows that are expected to be received at regular time intervals.

A

Annuity

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

one single cash flow

A

Lump Sum

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

to structure a loan such that one makes an equal stream of payments at the same time each period where the amount owed falls to zero immediately after the last payment.

A

Amortize

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

the values of stocks and bonds you see on the stock exchanges.

A

Market Valuations

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

interest rates rising after purchase of bonds.

A

Interest Rate Risk

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

the possibility that a firm’s credit rating will decline because of deterioration in a firm’s financial health.

A

Credit Risk

25
Q

a cash flow that lasts forever

A

Perpetuity

26
Q

selling stock for a higher price than the purchase price.

A

Capital Gain

27
Q

the relative percentages of debt and equity a firm uses to find its operations.

A

Capital Structure

28
Q

the use of debt in a firm’s funding structure

A

Financial Leverage

29
Q

the use of fixed assets in a firm’s operating structure.

A

Operating Leverage

30
Q

a number assigned to you that reflects your credit standing.

A

Credit Rating

31
Q

the percentage of total funding supplied by creditors and the lower this ratio the better for a firm’s financial health.

A

Debt to Asset Ratio

32
Q

where your credit rating is reported

A

Credit Report

33
Q

the ability of a firm to meet its interest and principal payments on debt.

A

Debt Service

34
Q

measured by fluctuations in a firm’s earnings per share (EPS) in relation to changes in operating profits (EBIT).

A

Financial Risk

35
Q

Results when a firm will not be able to meet its debt service requirements.

A

Financial Distress

36
Q

refers to the ability of a company to meet its principal and interest payments on a timely basis.

A

Debt Service

37
Q

relates to a firm’s operating activity and environment. Factors such as a firm’s competitive or leadership position, fixed-variable production cost mix, use of technology, marketing strategy and tactics, and regulatory environment influence this.

A

Business Risk

38
Q

shows up in the Shareholder’s Equity Section of a Balance Sheet. When a firm incorporates at the Secretary of State’s office the founding directors must indicate a number of shares of common stock to authorize.

A

Shares Authorized

39
Q

number of shares issued in the IPO represents _____ in the Shareholder’s Equity Section of a Balance Sheet.

A

Shares Issued

40
Q

the number of shares of common stock that are in the hands of shareholders (and not the company). Leaves room to issue additional shares if the firm needs additional equity funding (which newly organized firms might need).

A

Shares Outstanding

41
Q

represents funds a company earns from operating that have not been paid out to the common or preferred stockholders.

A

Retained Earnings

42
Q

cash flow that some firms pay to equity investors

A

Dividends

43
Q

debt issued by a financial institution or debt acquired in the financial markets

A

Funded Debt

44
Q

a fixed interest rate a firm pays on its long-term debt

A

Coupon Rate

45
Q

when a business cannot pay its short-term creditors

A

Financial Distress

46
Q

when a firm with a long-term credit commitment with a financial institution stops paying that financial institution

A

Default

47
Q

shows the relationship between interest rates on debt instruments and the Time to Maturity of the debt.

A

Yield Curve

47
Q

the difference in paying a lower interest rate on deposits than the rate on loans

A

Spread

48
Q

Low Unemployment and Low Inflation

A

Fed Dual Mandate

49
Q

a signal that an economic downturn will occur in the future. Hint: type of yield curve.

A

Inverted Yield Curve

50
Q

help to bring suppliers and demanders of capital together. Are involved with underwriting, distributing, and advising on security placements.

A

Investment Bankers

51
Q

regulates new issues of securities and requires registration of all securities unless an exemption is made.

A

Securities Act of 1933

52
Q

established the SEC and regulates secondary issues of securities and the securities markets. Provides for regulation of insider trading. Provides for regulation of securities manipulation.

A

Securities Act of 1934

53
Q

Number of Shares of Stock Outstanding X Market Price Per Share =
Represents the value the market places on the firm’s Total Shareholder’s Equity.

A

Market Capitalization

54
Q

AKA Book Value. Total Assets - Total Debt = _________

A

Total Shareholder’s Equity

55
Q

holding different types of securities. Depends on things like your age, risk aversion, and life expectancy.

A

Asset Allocation

56
Q

holding different securities within a class of securities.

A

Diversification

57
Q

Net Income + Depreciation - Incremental Working Capital - Incremental Capital Investment

A

Free Cash Flow

58
Q

Net Income Available for Shareholders / Number of Common Shares Outstanding

A

Earnings Per Share (EPS)

MBA 5600 - Finance (1 decks)

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