FM11 Ch 27 Banking Relationships

... balances schedule is the receivables -to-sales ratio  There is no difference in this ratio between March and June, which tells us that there has been no change in payment pattern (More ) 27 - 20 ... Underlying cause is seasonal variation 27 - 16 Construct an aging schedule for the end of March and the end of June Age of Account (Days) - 30 31-60 61-90 March A/R % $210 84% 40 16 0 $250 10...

Ngày tải lên: 06/04/2015, 19:41

... 19 - What agencies regulate securities markets?  The Securities and Exchange Commission (SEC) regulates:  Interstate public offerings  National stock exchanges  Trading ... fund 19 - Differentiate between a private placement and a public offering  In a private placement, such as to angels or VCs, securities are sold to a few investors rather than to the public ... in final...

Ngày tải lên: 06/04/2015, 19:41

... permission of the copyright owner Further reproduction prohibited without permission Reproduced with permission of the copyright owner Further reproduction prohibited without permission Reproduced ... permission of the copyright owner Further reproduction prohibited without permission Reproduced with permission of the copyright owner Further reproduction prohibited without...

Ngày tải lên: 03/06/2014, 01:52

... optimal amount of debt capital 30 - 28 What unique problems not-forprofit businesses encounter in financial analysis and planning and short-term financial management?  In general these tasks are ... of insufficient funding, or to use more than the theoretically optimal amount of debt 30 - 14 Why is capital budgeting important to not-for-profit businesses?  The financial...

Ngày tải lên: 06/04/2015, 19:41

... 29 - How important are pension funds?  They constitute the largest class of investors  They hold about 33% of all U S stocks 29 - Pension Plan Terminology  Defined benefit plan: Employer ... aggregate actuarial uncertainty 29 - 17 What risks are borne by the plan sponsor and plan beneficiaries under the four types of pension plans?  Defined benefit plan: Most risk fall...

Ngày tải lên: 06/04/2015, 19:41

... ordering costs increase  If Q > EOQ, total carrying costs increase, but ordering costs decrease 28 - 15 Suppose delivery takes weeks Assuming certainty in delivery and usage, at what inventory ... if you view cash as an operating assets, just like inventory  In this view, cash has a carrying cost, which is the opportunity cost for investing the funds, and an order cost, wh...

Ngày tải lên: 06/04/2015, 19:41

... $0.40 26 - 13 What is exchange rate risk? Exchange rate risk is the risk that the value of a cash flow in one currency translated from another currency will decline due to a change in exchange ... regulatory obstacles  To reduce risk by diversification 26 - What are the major factors that distinguish multinational from domestic financial management?  Currency differences  Economic...

Ngày tải lên: 06/04/2015, 19:41

... losses)(More ) 25 -  Break-up value: Assets would be more valuable if broken up and sold to other companies 25 - What are some questionable reasons for mergers?  Diversification  Purchase of assets ... rate would change the discount rate 25 - 26 Assume the target company has 20 million shares outstanding The stock last traded at $11 per share, which reflects the target’s value on...

Ngày tải lên: 06/04/2015, 19:41

... portfolio risk management 23 - 20 How are risk exposures identified and measured?  Large corporations have risk management personnel which have the responsibility to identify and measure risks facing ... substantially in the interim 23 - 19 Chapter 23 Extension: Insurance and Bond Portfolio Risk Management  Risk identification and measurement  Property loss, l...

Ngày tải lên: 06/04/2015, 19:41

... creditors when liquidation does occur  Companies in bankruptcy can hurt other companies in industry 24 - 24 Chapter 24 Extension  MDA to predict bankruptcy  Recent business failures 24 - 25 What ... or assignee, and then the assets are sold off 24 - 10 Describe the following terms related to U.S bankruptcy law:  Chapter 11: Business reorganization guidelines  Chapter 7: Li...

Ngày tải lên: 06/04/2015, 19:41

... 22 - Basic Definitions  Gross working capital: Total current assets  Net working capital: Current assets - Current liabilities  Net operating working capital (NOWC): Operating ... (More…) 22 -  Working capital management: Includes both establishing working capital policy and then the day-to-day control of cash, inventories, receivables, accruals, and accounts payabl...

Ngày tải lên: 06/04/2015, 19:41

... convertibles would be exercised Debt would remain outstanding 21 - 43 Recap the differences between warrants and convertibles  Warrants bring in new capital, while convertibles not  Most convertibles ... equity and 20% convertibles or bonds with warrants What effect will the two financing alternatives have on the firm’s WACC? 21 - 35 Convertibles Step 1: Find the after-t...

Ngày tải lên: 06/04/2015, 19:41

... Financial lease  Long-term and normally noncancelable  Maintenance usually not included  Sale and leaseback  Combination lease  "Synthetic" lease 20 - How are leases treated for tax purposes?  Leases ... is leased: Firm could obtain a 4-year lease which includes maintenance Lease meets IRS guidelines to expense lease payments Rental payment would be $260,000 at the beginn...

Ngày tải lên: 06/04/2015, 19:41

... investors 18 - 28 New Stock Plan  Firm issues new stock to DRIP enrollees, keeps money and uses it to buy assets  No fees are charged, plus sells stock at discount of 5% from market price, which is ... increases risk, and doesn’t appeal to any specific clientele  Conclusion: Consider residual policy when setting target payout, but don’t follow it rigidly 18 - 19 Stock Repurc...

Ngày tải lên: 06/04/2015, 19:41

... lost, so debt financing is less valuable to firms 17 - 29 What does capital structure theory prescribe for corporate managers? MM, No Taxes: Capital structure is irrelevant no impact on value or ... determined But a manager can change a firm's σ by changing the assets the firm invests in That means changing σ can change the value of the equity, even if it doesn't change the expected...

Ngày tải lên: 06/04/2015, 19:41