Gordon growth model Study guides, Revision notes & Summaries

What is included in the Income Statement and NOT in the Statement of Cash Flows? - Depreciation Expense Computation of Net Income: A co. sold products in 2014 for $120k and collected $100k cash and remainder in 2015. Co. incurred $70k expenses for 2014 and paid $100k which included $30k for expenses incurred in 2013. What is net income for 2014? - Computation of Net Income (R-E=NI) $50,000 Net Income = $120k - $70k = $50k, or Revenues - Expenses Incurred = Net Income Retained Ear...

Discretionary Financing Needed Formula - Answer Discretionary Financing Needed (DFN) = Projected Total Asset - Projected Total Liabilities - Projected Equity Sustainable Growth Rate Formula - Answer Sustainable Growth Rate (SGR) = Return on Equity (ROE) X (1-Divided Payout Ratio) Cash Flow from Operating Activities (CFO) Formula - Answer Cash Flow from Operating Activities (CFO) = Net Income + Depreciation +/- Decreases/Increases in Current Assets +/- Increase/Decrease in Current Liabiliti...

Coupon Rate - ANSWER-The interest rate that a company promises to pay on bonds Market Rate - ANSWER-The interest rate on other comparable bonds Par Value - ANSWER-The amount payable on maturity of the bond Market rate - ANSWER-Same as YTM - Yield to Maturity Gordon Growth Model - ANSWER-Assumes stable growth rates and does not incorporate risk CAPM Model - ANSWER-Allows to determine expected return on stocks and incorporates risk How do public companies maximize shareholder val...

The goal of the corporation is to: maximize stock price What makes an efficient market? Competitive market, liquidity, transparency What is the relationship between risk and required return? As risk increases, required return increases. What are the 3 main financial statements? Income statement, the Balance Sheet., and the statement of cash flows Which financial statement reflects a POINT in time (not a period in time) Balance sheet What is Revenue? Amoun...

WGU C214 Financial Management Exam Questions and Answers Net Income = - Answer- Revenues - Expenses Revenues - Cost of Goods Sold (COGS) - Answer- Gross Profit Gross Profit - Operating Expenses - Answer- EBIT EBIT = - Answer- Sales - Costs - Depreciation EBIT = - Answer- Operating Profit or Operating Income EBIT - Interest Expense = - Answer- Earnings Before Taxes Earnings before Taxes - Tax Expense = - Answer- Net Income (NI) Retained Earnings - Answer- End RE = Beg RE + NI - Dividends...

WGU C214 Final Exam Questions And Answers Latest Update With Complete Solution Rated A. Coupon Rate - CORRECT ANSWER-The interest rate that a company promises to pay on bonds Market Rate - CORRECT ANSWER-The interest rate on other comparable bonds Par Value - CORRECT ANSWER-The amount payable on maturity of the bond Market rate - CORRECT ANSWER-Same as YTM - Yield to Maturity Gordon Growth Model - CORRECT ANSWER-Assumes stable growth rates and does not incorporate risk CAPM M...

C214 Final Exam Practice Questions 2023/2024 Coupon Rate Correct Answer The interest rate that a company promises to pay on bonds Market Rate Correct Answer The interest rate on other comparable bonds Par Value Correct Answer The amount payable on maturity of the bond Market rate Correct Answer Same as YTM - Yield to Maturity Gordon Growth Model Correct Answer Assumes stable growth rates and does not incorporate risk

WGU C214 Financial Management Exam Questions and Answers Net Income = - Answer- Revenues - Expenses Revenues - Cost of Goods Sold (COGS) - Answer- Gross Profit Gross Profit - Operating Expenses - Answer- EBIT EBIT = - Answer- Sales - Costs - Depreciation EBIT = - Answer- Operating Profit or Operating Income EBIT - Interest Expense = - Answer- Earnings Before Taxes Earnings before Taxes - Tax Expense = - Answer- Net Income (NI) Retained Earnings - Answer- End RE = Beg RE + NI - Dividends...

Coupon Rate - The interest rate that a company promises to pay on bonds Market Rate - The interest rate on other comparable bonds Par Value - The amount payable on maturity of the bond Market rate - Same as YTM - Yield to Maturity Gordon Growth Model - Assumes stable growth rates and does not incorporate risk CAPM Model - Allows to determine expected return on stocks and incorporates risk How do public companies maximize shareholder value? - By maximizing Earnings Per Share ...

WGU C214 Financial Management Concepts Practice Exam 2023, With Complete Solution The matching principle in accrual accounting requires that: a. Expenses are matched to revenue recognition. b. Expenses are matched to the year in which they are incurred c. Revenues are matched to the year in which they are booked d. Revenues should be large enough to match expenses a The addition to retained earnings each year is: a. Net Income b. Net Income minus dividends c. Net Income plus dividend...