QUIZ||FUNDAMENTALS OF
CORPORATE FINANCE (LATEST
UPDATE) 20242025!!
capex decisions (CORRECT ANSWERS) capital expenditure
decision:decisions to invest in tangible/intangible assets
capex (CORRECT ANSWERS) Capital Expenditure-land,property,
equip, long term real assets
free cash flow (CORRECT ANSWERS) Cash available once the firm
has covered it's capital expenditures
financing decisions (CORRECT ANSWERS) concerned with the ways
in which firms obtain and manage long term financing to acquire and
support their productive assets(finance or pay for assets)
-the form and amount of financing a firm's investment, how to get $ in
the door, should I issue debt or isssue equity?
real assets (CORRECT ANSWERS) Assets used to produce goods and
services, not financial
asset (CORRECT ANSWERS) future benefit
economic resource
,future economic value will produce profit/value in the future
financial asset (CORRECT ANSWERS) financial claims to income
generated by real assets
-bonds
corporation (CORRECT ANSWERS) A business owned by stockholders
who share in its profits but are not personally responsible for its debts
-organized as a seperate legal identity owned by stockholders
"a nexus of contracts"
A distinct legal entity, owned by shareholders
Organized under 'articles of incorporation'
Limited liability - shareholders not personally responsible for debts of
corporation
May be 'private' or 'public' (latter has shares issued and trading on
exchanges)
May be 'closely held,' or widely dispersed shareholders
, Shareholders elect a board of directors, who appoint and monitor
managers
"Separation of ownership and control" - shareholders defer to board,
managers
Managers may quit, or be replaced, and corporation continues
Downside? "Agency costs"
Berle and Means, The Modern Corporation and Private Property
Two other downsides
Expensive legal/compliance machinery
"Double taxation" - corporate income taxed, and so are dividends and
capital gains for shareholders
llimited liability (CORRECT ANSWERS) the owners of a corp are not
personally liable for obligations of the corp- but can still be sued for
personal decisions
cfo (CORRECT ANSWERS) chief financial officer-leader, the most
important
leads financial decisions and execution
CORPORATE FINANCE (LATEST
UPDATE) 20242025!!
capex decisions (CORRECT ANSWERS) capital expenditure
decision:decisions to invest in tangible/intangible assets
capex (CORRECT ANSWERS) Capital Expenditure-land,property,
equip, long term real assets
free cash flow (CORRECT ANSWERS) Cash available once the firm
has covered it's capital expenditures
financing decisions (CORRECT ANSWERS) concerned with the ways
in which firms obtain and manage long term financing to acquire and
support their productive assets(finance or pay for assets)
-the form and amount of financing a firm's investment, how to get $ in
the door, should I issue debt or isssue equity?
real assets (CORRECT ANSWERS) Assets used to produce goods and
services, not financial
asset (CORRECT ANSWERS) future benefit
economic resource
,future economic value will produce profit/value in the future
financial asset (CORRECT ANSWERS) financial claims to income
generated by real assets
-bonds
corporation (CORRECT ANSWERS) A business owned by stockholders
who share in its profits but are not personally responsible for its debts
-organized as a seperate legal identity owned by stockholders
"a nexus of contracts"
A distinct legal entity, owned by shareholders
Organized under 'articles of incorporation'
Limited liability - shareholders not personally responsible for debts of
corporation
May be 'private' or 'public' (latter has shares issued and trading on
exchanges)
May be 'closely held,' or widely dispersed shareholders
, Shareholders elect a board of directors, who appoint and monitor
managers
"Separation of ownership and control" - shareholders defer to board,
managers
Managers may quit, or be replaced, and corporation continues
Downside? "Agency costs"
Berle and Means, The Modern Corporation and Private Property
Two other downsides
Expensive legal/compliance machinery
"Double taxation" - corporate income taxed, and so are dividends and
capital gains for shareholders
llimited liability (CORRECT ANSWERS) the owners of a corp are not
personally liable for obligations of the corp- but can still be sued for
personal decisions
cfo (CORRECT ANSWERS) chief financial officer-leader, the most
important
leads financial decisions and execution
