FINC 3610 Final Exam Dismukes
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Taxation C237 IADA Broker Exam Sample Question... AFSB 151 - Chapter 5 Manag
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Practice questions for this set
Learn 1 /7 Study with Learn
The effective annual interest rate, which takes into account the effect of
compound interest.
Choose an answer
1 Monthly stated rate (msr) 2 Effective annual rate (EAR)
3 Modified internal rate of return (MIRR) 4 Prime rate (pr)
Don't know?
Three questions that corporate finance focused on? 1. capital budgeting
2. capital structure
3. working capital management
capital budgeting what should we invest in long-term?
capital structure how do we finance those investments?
working capital structure how do we manage the day-to-day operation
of the firm?
, Forms of business organization sole proprietorship, partnership, corporation
sole proprietorship one single person--> high risk, high reward, unlimited liability, easy to start-up,
taxed as personal income, difficult to transfer ownership corpo
partnership -general: run the business, making decisions, and accepting more risk, easy to
startup, taxed as personal income
-limited: there for money and investing, limited liability, life limited of that of
owners, equity limited to combined wealth, difficulty transferring ownership
corporation a business created as a distinct legal entity composed of one or more individual
entities
-separation of ownership and control
-shareholders: anyone who owns stock in company
-directors: voted on by shareholders (proxy vote), ultimate oversight
-managers: run the company
What is the goal of financial management? maximize shareholder wealth
Agency problem/conflict The possibility of conflict of interest between the stockholders (the principal) and
management (the agent) of a firm
Financial markets and the corporation firm: invest in assets, current and fixed
financial markets: short and long term debt, equity shares
-ultimately the firm must be a cash generating activity
-cash flows from the firm must exceed the cash flows from the financial markets
The balance sheet -snapshot of the company at a point in time
-assets= liabilities + stockholders equity
The income statement -performance of a company over a period of time
-revenues - expenses= income
-the bottom line: net income or EPS (earnings per share)
The statement of cash flows operating, investing, financing activities
operating activities includes cash receipts and cash payments for transactions relating to revenue and
expense activities
investing activites Includes cash transactions involving the purchase and sale of long-term assets
and current investments
financing activites borrowing or paying back money to lenders and receiving additional funds from
stockholders or paying them dividends
average tax rate total tax divided by taxable income
marginal tax rate tax rate paid based on next dollar of income
Is depreciation a cash flow? no
Save
Students also studied
Taxation C237 IADA Broker Exam Sample Question... AFSB 151 - Chapter 5 Manag
Teacher 40 terms Teacher 13 terms Teacher 67 terms Teacher
GrayRaccoon89934 Preview wonderfulAlphabetics Preview joshuawesonga752 Preview tee
Practice questions for this set
Learn 1 /7 Study with Learn
The effective annual interest rate, which takes into account the effect of
compound interest.
Choose an answer
1 Monthly stated rate (msr) 2 Effective annual rate (EAR)
3 Modified internal rate of return (MIRR) 4 Prime rate (pr)
Don't know?
Three questions that corporate finance focused on? 1. capital budgeting
2. capital structure
3. working capital management
capital budgeting what should we invest in long-term?
capital structure how do we finance those investments?
working capital structure how do we manage the day-to-day operation
of the firm?
, Forms of business organization sole proprietorship, partnership, corporation
sole proprietorship one single person--> high risk, high reward, unlimited liability, easy to start-up,
taxed as personal income, difficult to transfer ownership corpo
partnership -general: run the business, making decisions, and accepting more risk, easy to
startup, taxed as personal income
-limited: there for money and investing, limited liability, life limited of that of
owners, equity limited to combined wealth, difficulty transferring ownership
corporation a business created as a distinct legal entity composed of one or more individual
entities
-separation of ownership and control
-shareholders: anyone who owns stock in company
-directors: voted on by shareholders (proxy vote), ultimate oversight
-managers: run the company
What is the goal of financial management? maximize shareholder wealth
Agency problem/conflict The possibility of conflict of interest between the stockholders (the principal) and
management (the agent) of a firm
Financial markets and the corporation firm: invest in assets, current and fixed
financial markets: short and long term debt, equity shares
-ultimately the firm must be a cash generating activity
-cash flows from the firm must exceed the cash flows from the financial markets
The balance sheet -snapshot of the company at a point in time
-assets= liabilities + stockholders equity
The income statement -performance of a company over a period of time
-revenues - expenses= income
-the bottom line: net income or EPS (earnings per share)
The statement of cash flows operating, investing, financing activities
operating activities includes cash receipts and cash payments for transactions relating to revenue and
expense activities
investing activites Includes cash transactions involving the purchase and sale of long-term assets
and current investments
financing activites borrowing or paying back money to lenders and receiving additional funds from
stockholders or paying them dividends
average tax rate total tax divided by taxable income
marginal tax rate tax rate paid based on next dollar of income
Is depreciation a cash flow? no
