CORPORATE FINANCE - EXAM 1 QUESTIONS AND
ANSWERS 2024 - 25
What,is,corporate,finance?,,,ANS,-What,assets,a,company,should,buy
What,projects,to,invest,in
How,to,raise,cash,to,finance,these,investments,
in,order,to,MAINTAIN,AND,MAXIMIZE,ECONOMIC,VALUE
Ultimately,,the,firm,must,be,a,__,,,ANS,-cash,generating,activity
The,cash,flows,from,the,firm,must,__,the,cash,flows,from,the,financial,markets,,,ANS,-exceed
2,main,questions,,,ANS,-1.,Capital,budgeting
2.,Capital,structure
Capital,budgeting,decision,,,ANS,-What,long-term,investments,should,the,firm,choose?
Fixed,Assets
Capital,structure,decision,,,ANS,-How,should,the,firm,raise,funds,for,the,selected,investments
Liabilities,and,SH,Equity
Ultimate,goal,of,financial,managers,,,ANS,-Shareholder,wealth,maximization,
=,maximizing,firm,value,
=,maximizing,stock,price
SH,wealth,,,ANS,-stock,price,(fluctuates,,want,to,maximize),*,shares,outstanding,(relatively,stable)
Financial,analyst,reports,are,___,looking,,,ANS,-forward
, Annual,and,quarterly,reports,are,__,looking,,,ANS,-backward
Media,is,___,information,,,ANS,-current
Financial,analyst,reports,,annual,and,quarterly,reports,,and,media,are,all,___,information,,,ANS,-public
Insider,trading,,,ANS,-any,time,a,person,trades,while,aware,of,material,nonpublic,information
Illegal
Mr.,Rajaratnam,sentenced,to,11,years,-,tips,from,company,executives,and,technology,consultants
Tips,from,Goldman,Sachs,director,,classmate,-,got,advanced,warning,of,Warren,Buffet,investment
types,of,financial,statements,,,ANS,-balance,sheet
income,statement
accounting,cash,flow,statement
finance,cash,flow,statement
other
balance,sheet,,,ANS,-firm's,accounting,value,at,a,specific,point,in,time
assets,go,from,most,liquid,to,least,liquid
liabilities,go,from,debt,(current,to,long-term),to,SHE
liquidity,,,ANS,-
the,ease,and,quickness,with,which,assets,can,be,converted,to,cash,without,a,significant,loss,in,value
NWC,,,ANS,-measure,of,short-term,liquidity
current,assets,-,current,liabilities
ANSWERS 2024 - 25
What,is,corporate,finance?,,,ANS,-What,assets,a,company,should,buy
What,projects,to,invest,in
How,to,raise,cash,to,finance,these,investments,
in,order,to,MAINTAIN,AND,MAXIMIZE,ECONOMIC,VALUE
Ultimately,,the,firm,must,be,a,__,,,ANS,-cash,generating,activity
The,cash,flows,from,the,firm,must,__,the,cash,flows,from,the,financial,markets,,,ANS,-exceed
2,main,questions,,,ANS,-1.,Capital,budgeting
2.,Capital,structure
Capital,budgeting,decision,,,ANS,-What,long-term,investments,should,the,firm,choose?
Fixed,Assets
Capital,structure,decision,,,ANS,-How,should,the,firm,raise,funds,for,the,selected,investments
Liabilities,and,SH,Equity
Ultimate,goal,of,financial,managers,,,ANS,-Shareholder,wealth,maximization,
=,maximizing,firm,value,
=,maximizing,stock,price
SH,wealth,,,ANS,-stock,price,(fluctuates,,want,to,maximize),*,shares,outstanding,(relatively,stable)
Financial,analyst,reports,are,___,looking,,,ANS,-forward
, Annual,and,quarterly,reports,are,__,looking,,,ANS,-backward
Media,is,___,information,,,ANS,-current
Financial,analyst,reports,,annual,and,quarterly,reports,,and,media,are,all,___,information,,,ANS,-public
Insider,trading,,,ANS,-any,time,a,person,trades,while,aware,of,material,nonpublic,information
Illegal
Mr.,Rajaratnam,sentenced,to,11,years,-,tips,from,company,executives,and,technology,consultants
Tips,from,Goldman,Sachs,director,,classmate,-,got,advanced,warning,of,Warren,Buffet,investment
types,of,financial,statements,,,ANS,-balance,sheet
income,statement
accounting,cash,flow,statement
finance,cash,flow,statement
other
balance,sheet,,,ANS,-firm's,accounting,value,at,a,specific,point,in,time
assets,go,from,most,liquid,to,least,liquid
liabilities,go,from,debt,(current,to,long-term),to,SHE
liquidity,,,ANS,-
the,ease,and,quickness,with,which,assets,can,be,converted,to,cash,without,a,significant,loss,in,value
NWC,,,ANS,-measure,of,short-term,liquidity
current,assets,-,current,liabilities
