Calculation the current yield (dividend yield) of stock.
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CY = Annual Interest Payments/Bond's Current Price
How does a firm's level of debt affect the cost of common equity?
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The cost of equity rises as more debt is added because of the increased
risk due to financial distress, which is borne primarily by common
shareholders
,Projects are ________________, if the cash flows of one are unaffected by the acceptance of
the other.
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Independent
Generally, interest rates (yield) increase as the maturity ____________.
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Increases
If the AD curve shifts to the left it is an economic ____________, while a shift to the right
represents economic ______________.
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Contraction; expansion
Provides information regarding the amount of cash income that a bond will generate
in a given year, but it does not account for capital gains or losses that will be realized
if the bond is held until maturity (or call) and it does not provide an accurate measure
of the bond's total expected return
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, Current Yield
Occurs when management places a constraint on the size of the firm's capital budget
during a particular period
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Capital Rationing
Used to calculate the length of time to recoup an investment based on the
investment's discounted cash flows
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Discounted Payback Period
How do you calculate Total Net Operating Capital (TNOC)?
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TNOC = NOWC + Operating Long-Term Assets
True/False: NPV does not assume reinvestment at the cost of capital.
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, False (does assume)
The total supply of goods and services provided within an economy at a given overall
price level in a given time period
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Aggregate Supply
Too much increase in the firm's debt will __________ the value of the firm.
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Decrease
The individuals and corporations that hold deposits in banks
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Depositors
A measure for calculating risk-adjusted return, and this ratio has become the industry
standard for such calculations
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Give this one a try later!
CY = Annual Interest Payments/Bond's Current Price
How does a firm's level of debt affect the cost of common equity?
Give this one a try later!
The cost of equity rises as more debt is added because of the increased
risk due to financial distress, which is borne primarily by common
shareholders
,Projects are ________________, if the cash flows of one are unaffected by the acceptance of
the other.
Give this one a try later!
Independent
Generally, interest rates (yield) increase as the maturity ____________.
Give this one a try later!
Increases
If the AD curve shifts to the left it is an economic ____________, while a shift to the right
represents economic ______________.
Give this one a try later!
Contraction; expansion
Provides information regarding the amount of cash income that a bond will generate
in a given year, but it does not account for capital gains or losses that will be realized
if the bond is held until maturity (or call) and it does not provide an accurate measure
of the bond's total expected return
Give this one a try later!
, Current Yield
Occurs when management places a constraint on the size of the firm's capital budget
during a particular period
Give this one a try later!
Capital Rationing
Used to calculate the length of time to recoup an investment based on the
investment's discounted cash flows
Give this one a try later!
Discounted Payback Period
How do you calculate Total Net Operating Capital (TNOC)?
Give this one a try later!
TNOC = NOWC + Operating Long-Term Assets
True/False: NPV does not assume reinvestment at the cost of capital.
Give this one a try later!
, False (does assume)
The total supply of goods and services provided within an economy at a given overall
price level in a given time period
Give this one a try later!
Aggregate Supply
Too much increase in the firm's debt will __________ the value of the firm.
Give this one a try later!
Decrease
The individuals and corporations that hold deposits in banks
Give this one a try later!
Depositors
A measure for calculating risk-adjusted return, and this ratio has become the industry
standard for such calculations
Give this one a try later!
