CPA BEC Part 2 Risk, Return, and Cash Management Techniques

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  1. Cost of Debt
    The expected interest cost on new debt times one minus the marginal tax rate due to the fact that interest payments are tax deductible
  2. Weighted-Average Cost of Capital (WACC)
    The weighted average of the cost of debt and the various equity components of the firm's capital structure.
  3. Dividend Growth Model
    Amodel used to estimate the cost of equity.
  4. CAPM (Capital Asset Pricing Model)
    A modle used to estimate the required return on a firm's cost of capital.
  5. Reasons to hold cash
    Tranasction purposes, precaution purposes, speculative purposes, and compensating balances
  6. Transaction balances
    Cash available to make expected day-to-day payments of various obligations.
  7. Target Cash Balance
    The desired cash balance that the firm believes is necessary to safely conduct business.
  8. Sychronizing Cash Flows
    The matching of the timing of cash outflows with the timing of cash inflows.
  9. Speculative Balances
    Cash available to the firm to take advantage of business oppotunities
  10. Precautionary Balances
    Cash balances held as a reserve for random or unexpected fluctuations in cash inflows or outflows.
  11. Netting
    A cash mangement tool that maximizes cash flow by reducing the administrative and transaction fees for currency conversion.
  12. Net Float
    The sum of disbursement float and the collection float.

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CPA BEC Part 2 Risk, Return, and Cash Management Techniques
2010-04-05 01:18:35
CPA BEC Part 2 Risk Return and Cash Management Techniques

CPA BEC Part 2 Risk, Return, and Cash Management Techniques
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