C214 Final Exam Questions & Answers 100% Correct
The interest rate that a company promises to pay on bonds - ANSWER-Coupon Rate The interest rate on other comparable bonds - ANSWER-Market Rate The amount payable on maturity of the bond - ANSWER-Par Value Same as YTM - Yield to Maturity - ANSWER-Market rate Assumes stable growth rates and does not incorporate risk - ANSWER-Gordon Growth Model Allows to determine expected return on stocks and incorporates risk - ANSWER-CAPM Model By maximizing Earnings Per Share - ANSWER-How do public companies maximize shareholder value? By keeping control within the company - ANSWER-How do private companies maximize shareholder value? Lowers cost of capital - ANSWER-Positive credit rating has what effect on capital? It is cash flow generated for sale of products and services - ANSWER-What is cash flow from operating activities? Ending retained earnings=Beginning retained earnings + Net Income = Dividends - ANSWER-What is the formula for retained earnings?
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