D076 Finance Skills for Management new study set

A local start-up company just hit its five-year anniversary and is planning an initial public offering sometime this year. In order to issue public stock, which market will the company use? - Primary market About a year ago, the short-term Treasury bill had 1.54% interest and the long-term Treasury note had 2.54% interest. This week, the 1-year Treasury bill has an interest rate of 3.13%, while the 10-year Treasury note has an interest rate of 2.28%. What does this information indicate about the future economy? - It may indicate an economic downturn. Accounting - Focuses on the past, The system of recording, reporting, and summarizing past financial information and transactions. Annual Percentage Rate (APR) - The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. annuity due - an annuity whose payments occur at the beginning of each period Asset pricing - The process of valuing assets Auction market - type of secondary market with a physical location and where prices are determined by investors' willingness to pay Banks and credit unions - Receive deposits and extend loans to individuals and businesses bondholders - give the company credit, more interested in projects that give them a higher chance of getting their investment back while providing sufficient compensation. Business finance - Area of finance that deals with sources of funding and the capital structure of corporations, the actions that managers take to increase the value of a firm for its owners, and the tools and analysis used to allocate financial resources. Capital - A financial asset that can be used by a firm or individual. EX: machinery or cash Capital market - used for long-term assets that are held for greater than one year. Central banks - Ensure that a nation's economy remains healthy by controlling the amount of money circulating in the economy coincident indicators - economic indicators that usually change at the same time as changes in overall business activity: gross domestic product (GDP) and personal income compound interest - the interest on the principal plus the interest on earned interest compounding - finding a future value given a present value Current market value - What someone would pay right now for an asset. Dealer market - Type of secondary market; dealer buys and sells for themselves, at their own risk; over the counter (OTC) markets; most of the buying and selling is done by the dealer; has no physical location; NASDAQ discounting - finding a present value given a future value