Ch 15/16
Ch 17
Ch 18
Ch 19
Ch 21
100
The mix of debt and equity that maximizes the firm's stock price
What is the optimal capital structure?
100
The dividend policy that guides a firm that has more funds than it needs to pay a cash dividend to shareholders.
What is the residual dividend policy?
100
The first time securities are issued on the open market by a company is this.
What is an IPO?
100
Maintenance of the equipment by the lessor is often included in this type of lease.
What is operating lease?
100
Reducing DSO will reduce this measure of cash management.
What is the cash conversion cycle?
200
Increasing this, which can be done by increasing a firm's fixed costs, will increase a firm's business risk
What is operating leverage
200
You start with 200 shares of stock at $100 a share. After this, you have 400 shares of stock at $50 a share.
What is a stock split?
200
When securities are sold to one or a few investors, generally institutional investors.
What is a private placement?
200
This type of lease has aspects of both operating and financial leases.
What is a combination lease?
200
Name three account that are a part of net operating working capital.
What is inventory, cash, and accounts receivable? (also accounts payable and accruals)
300
The optimal capital structure is a trade-off between the present value of the tax shield and this potential cost.
What is bankruptcy cost.
300
According to MM, dividend policy is __________.
What is irrelevant?
300
Shaw Company, whose stock price is now $12, needs to raise $10 million in common stock. Securities Brokers, the underwriter, has informed Shaw that they must price the new issue to the public at $10 per share. Securities Brokers compensation will be 5% of the issue price, so Shaw will net only $9.5 per share. Shaw will also incur direct expenses in the amount of $100,000. How many shares must the firm sell to net $10 million after underwriting and direct flotation expenses?
What is 1,063,158?
300
This requires that for an unqualified audit report, financial (or capital) leases must be included in the the balance sheet by reporting the present value of future lease payments as an asset and also showing this same amount as an offsetting liability.
What is Financial Accounting Standards Board (FASB) Statement #13?
300
If annual sales are 100,000 and inventory is 10,000, what is the inventory conversion period?
What is 36.5 days?
400
The percentage change in net income will be greater than the percentage change in net operating income when this form of financing is used.
What is debt financing?
400
The dividend policy that believes investors form groups that purchase stock to get their desired dividend policy.
What is the clientele effect?
400
Ghimire Inc. is planning an IPO. Its underwriter believes the stock will sell for $12 per share, and has calculated that Ghimire will have to sell 1,000,000 shares to net its desired proceeds. Surprisingly, upon issue, the Ghirmire stock price closed its first day of trading at $15 per share. This is the amount Ghirmire left on the table.
What is $3,000,000?
400
Leasing is a substitute for this form of financing from our capital structure equation.
What is debt?
400
The inventory conversion period is 20 days, the average collection period is 25 days, and the payables deferral period is 10 days, name the cash conversion cycle.
What is 35 days?
500
Financial leverage uses more of this type of financing
What is fixed-cost or debt?
500
The dividend policy favoring paying high dividends because it is less risky than trusting management to use the funds in the best interests of shareholders.
What is bird-in-hand?
500
Establishing a market value for the firm is one of the advantages of this action by a company.
What is going public?
500
Leasing cash flows are discounted at this rate.
What is the after tax cost of debt?
500
Newell Co. had credit sales of $1,500,000 last year and its DSO was 25 days. Name the average receivables balance, based on a 365-day year.
What is $102,740?
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