- Does an unlettered firm have debt?
- The use of more debt increases financial risk, which leads to (more/less) risky equity
- The use of more debt translates to (higher/lower) interest tax shield
- Cash flow statement presents net cash flows relating to what three criteria over a certain period?
- T/F: MV is rarely different from BV
- T/F: A non cash item is an expense charged against revenues that does not directly affect cash flow
- T/F: Balance sheet and income statement combined give a reasonable estimate of the firm's cash flows and market values
- T/F: The value of a firm's assets as they appear on the balance sheet of the firm are generally equal to the market value of the firm.
- T/F: Financial managers should evaluate book values, not market values
- What is the most important pieces of information that can be derived from financial statements?
- T/F: The income statement reflects a summary of activity that occurs over some period of time while the balance sheet is a snapshot taken at a single point in time
- Can we define the relationship between the risk premium and beta so that we can estimate the expected return?
- The higher the beta, the (greater/lower) the risk premium should be
- Security market line: portion of the line that is leading up to the market portfolio
- Security market line: portion of the line that goes beyond the market portfolio
- From the put option holder's viewpoint, the underlying stock is expected to (rise/decline) in value, i.e., "put down."
- How many rights does it take to purchase one new share?
- The cash position $ in the replicating portfolio is always the minimum of three numbers:
- From the call option holder's viewpoint, the underlying stock is expected to (rise/decline) in value, i.e., "call up."
- Each existing share has how many rights?