Corporate Finance Concepts - Statistics

General Stats
  • This quiz has been taken 141 times
  • The average score is 9 of 28
Answer Stats
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%
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