BEC Financial Management review 19

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Joens1313
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300441
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BEC Financial Management review 19
Updated:
2015-04-11 00:45:30
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BEC Financial Management review 19
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BEC Financial Management review 19
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  1. what is preferred stock?
    A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock.
  2. ---------------------- generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.
    Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.
  3. what is a put option?
    a shareholder may have the right to make the company repurchase shares for a fixed price.
  4. when evaluating individual entity, risk typically is categorized as ------------- risk or financial risk.
    when evaluating individual entity, risk typically is categorized as business risk or financial risk.
  5. when evaluating individual entity, risk typically is categorized as business risk or ---------------- risk.
    when evaluating individual entity, risk typically is categorized as business risk or financial risk.
  6. what is business risk?
    business risk is the riskiness of the entity's operations without any debt in other words risk inherent in operations.
  7. what is financial risk?
    financial risk is the additional risk that the owners bear due to the entity's decision to carry debt.
  8. ---------------------risk is the additional risk that the owners bear due to the entity's decision to carry debt.
    financial risk is the additional risk that the owners bear due to the entity's decision to carry debt.
  9. The higher the degree of -----------------------, the greater the potential danger from forecasting risk. That is, if a relatively small error is made in forecasting sales, it can be magnified into large errors in cash flow projections.
    The higher the degree of operating leverage, the greater the potential danger from forecasting risk. That is, if a relatively small error is made in forecasting sales, it can be magnified into large errors in cash flow projections.
  10. when a relatively small change in sales results in a large change in operating income (or EBIT) a high degree of -------------------- exists.
    when a relatively small change in sales results in a large change in operating income (or EBIT) a high degree of operating leverage exists.
  11. when a relatively small change in sales results in a large change in operating income (or EBIT) a --------------------- of operating leverage exists.
    when a relatively small change in sales results in a large change in operating income (or EBIT) a high degree of operating leverage exists.

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