MBA 702 EXAM 1 LATEST
Potential Problems using ________.
no underlying financial theory.
- finding comparable firms
- what to do with conglomerates, multidivisional firms
- differences in accounting practices
- differences in capital structure
- seasonal variations, one-time events - ANSWERS-DuPont Identity
Is based on the three areas of corporate finance that were discussed in
chapter one: capital budgeting decisions, capital structure decisions, and
working capital management. - ANSWERS-Financial Planning
Said to "drive" the model - ANSWERS-Sales Forecast
The output summarizing different projections. - ANSWERS-Pro Forma
Statements
Investment needed to support sales growth. - ANSWERS-Asset
Requirements
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1
, MBA 702 EXAM 1 LATEST
Debt and dividend policies - ANSWERS-Financial Requirements
Designated source(s) of external financing - ANSWERS-The "Plug"
State of the economy, anticipated changes in interest rates, inflation, etc.
- ANSWERS-Economic Assumptions
This firm will run a surplus that causes a decline in the debt-to-equity
ratio. As the growth rate increases, the surplus becomes a deficit, and the
firm will need external financing. - ANSWERS-Low Growth Firm
Is the growth rate the firm can maintain with internal financing only. -
ANSWERS-Internal Growth Rate (IGR)
Is the maximum growth rate a firm can achieve without external equity
financing, while maintaining a constant debt-to-equity ratio. -
ANSWERS-Sustainable Growth Rate (SGR)
What are the 4 factors of Determinants of Growth? - ANSWERS-
Operating Efficiency
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2
, MBA 702 EXAM 1 LATEST
Asset Use Efficiency
Financial Leverage
Dividend Policy
Operating Efficiency is also: - ANSWERS-Profit Margin
Asset Use of Efficiency is also: - ANSWERS-Total Asset Turnover
Financial Leverage is also: - ANSWERS-Equity Multiplier
Dividend Policy is also: - ANSWERS-Retention Ratio
The process of finding the present value? - ANSWERS-Discounting
The process of valuation by finding the present value? - ANSWERS-
Discounted Cash Flow (DCF)
A series of level cash flows forever - ANSWERS-Perpetuity
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3
Potential Problems using ________.
no underlying financial theory.
- finding comparable firms
- what to do with conglomerates, multidivisional firms
- differences in accounting practices
- differences in capital structure
- seasonal variations, one-time events - ANSWERS-DuPont Identity
Is based on the three areas of corporate finance that were discussed in
chapter one: capital budgeting decisions, capital structure decisions, and
working capital management. - ANSWERS-Financial Planning
Said to "drive" the model - ANSWERS-Sales Forecast
The output summarizing different projections. - ANSWERS-Pro Forma
Statements
Investment needed to support sales growth. - ANSWERS-Asset
Requirements
END OF
PAGE
1
, MBA 702 EXAM 1 LATEST
Debt and dividend policies - ANSWERS-Financial Requirements
Designated source(s) of external financing - ANSWERS-The "Plug"
State of the economy, anticipated changes in interest rates, inflation, etc.
- ANSWERS-Economic Assumptions
This firm will run a surplus that causes a decline in the debt-to-equity
ratio. As the growth rate increases, the surplus becomes a deficit, and the
firm will need external financing. - ANSWERS-Low Growth Firm
Is the growth rate the firm can maintain with internal financing only. -
ANSWERS-Internal Growth Rate (IGR)
Is the maximum growth rate a firm can achieve without external equity
financing, while maintaining a constant debt-to-equity ratio. -
ANSWERS-Sustainable Growth Rate (SGR)
What are the 4 factors of Determinants of Growth? - ANSWERS-
Operating Efficiency
END OF
PAGE
2
, MBA 702 EXAM 1 LATEST
Asset Use Efficiency
Financial Leverage
Dividend Policy
Operating Efficiency is also: - ANSWERS-Profit Margin
Asset Use of Efficiency is also: - ANSWERS-Total Asset Turnover
Financial Leverage is also: - ANSWERS-Equity Multiplier
Dividend Policy is also: - ANSWERS-Retention Ratio
The process of finding the present value? - ANSWERS-Discounting
The process of valuation by finding the present value? - ANSWERS-
Discounted Cash Flow (DCF)
A series of level cash flows forever - ANSWERS-Perpetuity
END OF
PAGE
3
