| Hint | Answer | % Correct |
|---|---|---|
| The purpose of a corporation is to ____ shareholder value | Maximize | 92%
|
| Shareholder value is represented by which part of the above equation? | Equity | 77%
|
| Cash left after paying expenses | Profit / Net Income | 73%
|
| Cash collected from operating a business | Revenue | 65%
|
| Cash paid to operate a business (Costs) | Expenses | 54%
|
| What officer in a company is in charge of finances? | Chief Financial Officer (CFO) | 46%
|
| Weighted average cost of equity and debt | WACC | 44%
|
| The principle that a dollar in the future is worth less than a dollar today. | Time Value of Money/TVM | 42%
|
| The rate at which present and future values are derived | Discount Rate / Rate of Return / Rate / Interest | 41%
|
| EBIT | Earnings Before Interest and Taxes | 41%
|
| The ____ equitation is: Assets = Liabilities + Owners Equity | Accounting | 38%
|
| Costs that are variable | Variable Expenses (COGS) | 38%
|
| The present value of inflows - outflows for a project | Net Present Value (NPV) | 31%
|
| The discount rate at which PV of outflows = PV of inflows | Internal Rate of Return (IRR) | 29%
|
| Present value is derived from ____ future cash flows | Discounting | 28%
|
| When debt increases and equity remains the same, ____ increases | Leverage | 20%
|
| The tax benefit created by using debt is called | Tax Shield | 18%
|
| EBITDA | Earnings Before Interest, Taxes, Depreciation, Ammortization | 17%
|
| Costs that remained fixed | Fixed Expenses | 17%
|
| What is the mix of equity and debt called? | Capital Structure | 16%
|
| How quickly an investment pays back its initial costs | Payback Period | 15%
|
| What is it called when a company can not pay back it's debt? | Default | 14%
|
| Future value is derived from ____ present cash flows | Compounding | 11%
|
| What is it called when managers in a company act in their own interest and not in the shareholders? | Agency Problem/Risk | 7%
|
| What is it called when managers reject good projects because most of the benefits go to debt holders? | Debt Overhang | 2%
|
| The idea that capital structure does NOT affect firm value in a no-tax world is called what? | MM Proposition 1 | 2%
|
| The idea that more leverage increases equity risk is called what? | MM Proposition 2 | 2%
|
| Cost that arises from conflicts between shareholders and debt holders? | Agency Cost of Debt | 1%
|