Unit 7 (Videos) Flashcards
Alive bonds are …
bonds that are still part of the financial structure of the company.
We pay back to the amortized bonds a _______, and the ___________ may or may not have a premium.
refund value
refund value
When we are amortizing the premium, the refund value becomes _________ than the nominal value of the bond.
bigger
When we are talking about collection, if we issue bonds with premiums, the emission value is __________ the nominal value.
less than
Premiums are ______ for the investors.
profits
When issuing refunds, we pay back when we have _____ bonds.
amortized
Refund is the same as amortization.
True
Cost of capital, K, is …
the minimum % we need to get back on our investment
Cash flow in capital equity can be the cash flow in moment 0 of our our investment - the loans and debentures + the cash flow in our cost of equity increase.
True
If we have a percentage for a cost of increase, we need to divide the amount we are going to pay by (1+ the opening/closing/other fee)
FALSE
we divide the amount we are going to pay by (1-whatever fee)
The cost of equity (capital) is the minimum return we need on our investment.
True
We obtain the global cash flow by ….
adding each of the individual cash flows
Grants are considered a cash ______ flow
in flow
When we need to finance an investment, and we already have other sources of financing, we ask for a loan amount equal to _____________.
the pending amount we need to complete our financing + the opening costs of the loan
Whenever we have commissions that are a percentage of our payment or loan amount, we calculate the total amount, including the commissions, by …
dividing our payment or necessary loan amount by (1-i%)
When adding, the global cash-flows of a financial project, the total amount must be the same as …
our investment
IRR is the rate that makes the negative and positive cash-flows equal to 0.
True
The cost of capital can be found by finding the internal rate of return of the global cash-flows.
True
To calculate the leasing installment where the purchase option is the same as the installments, we use the formula …
Leasing amount/(1+PV), with the payment being -1 for the present value formula (for the a)ni
The alive bonds of each year is equal to the alive bonds + amortized bonds.
True
Amortized bonds are cash outflows.
True
When talking about debentures, collections are equal to the amortized bonds*the emission value.
FALSE
collections = emission value * number of bonds
When you make an issue with premium, the emission value becomes _______ than the face value.
smaller
When there is a premium, we calculate the emission value by …
emission = FV*(1-i%)
where i is the rate of the premium
$$*(1-i%) reduces $$.
True
$$$/(1-i%) increases $$$
True
Amortization = amortized bond * refund value
True
If the problem doesn’t tell us anything about the refund value, wee assume it is the same as the face value.
True
