BEC 5

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  1. What term represents the residual income that remains after the cost of all capital, includ­ing equity capital, has been deducted?
    Economic value-added
  2. ----------------------------- is after-tax operating income less the weighted average cost of capital.
    Economic value added (EVA) is after-tax operating income less the weighted average cost of capital.
  3. ------------------------ is a measure of financial performance calculated as operating cash flow minus capital expenditures.
    Free cash flow is a measure of financial performance calculated as operating cash flow minus capital expenditures.
  4. ---------------------- represents the cash that a company is able to generate after paying the money to maintain its asset base.
    Free cash flow represents the cash that a company is able to generate after paying the money to maintain its asset base.
  5. The --------------------------------------------- is the average rate that a company pays its investors for the use of their funds after adjustments for taxes.
    The weighted average cost of capital (WACC) is the average rate that a company pays its investors for the use of their funds after adjustments for taxes.
  6. Treating dividends as the ---------------------- of a financing decision assumes that earnings should be retained and reinvested as long as profitable projects are available
    Treating dividends as the residual part of a financing decision assumes that earnings should be retained and reinvested as long as profitable projects are available
  7. -------------------------- are an increase in net assets from results of operations, retained by the corporation for use in the enterprise
    Retained earnings are an increase in net assets from results of operations, retained by the corporation for use in the enterprise
  8. what are retained earnings
    Retained earnings are an increase in net assets from results of operations, retained by the corporation for use in the enterprise
  9. --------------------------- is gain or loss derived from the sale or exchange of capital assets
    Capital gain or loss is gain or loss derived from the sale or exchange of capital assets
  10. The higher the risk, the higher the -------------------------, and the lower the present value of the subject company.
    The higher the risk, the higher the discount rate, and the lower the present value of the subject company.
  11. The higher the risk, the higher the discount rate, and the lower the --------------------- of the subject company.
    The higher the risk, the higher the discount rate, and the lower the present value of the subject company.
  12. A ----------------- is the minimum acceptable rate of return on an investment. It is used to calculate the present value of future cash flows.
    A discount rate is the minimum acceptable rate of return on an investment. It is used to calculate the present value of future cash flows.
  13. The ---------------------- is the method of measuring the market value of all output by adding up the factor payments and claims on the value of all final output, to yield gross national product
    The income approach is the method of measuring the market value of all output by adding up the factor payments and claims on the value of all final output, to yield gross national product
  14. ------------------ is a systematic process of evaluating the potential risks that are involved in an audit or attestation engagement.
    Risk assessment is a systematic process of evaluating the potential risks that are involved in an audit or attestation engagement.
  15. -------------------- is the process of recording a cost as an asset and deferring its recognition as an expense to future periods.
    Capitalization is the process of recording a cost as an asset and deferring its recognition as an expense to future periods.
  16. --------------- is the per-share value of capital stock fixed by the articles of incorporation or legal capital.
    Par value is the per-share value of capital stock fixed by the articles of incorporation or legal capital.
  17. what is par value?
    Par value is the per-share value of capital stock fixed by the articles of incorporation or legal capital.
  18. -------------- is the amount of capital that must be retained in the corporation.
    Par value is the amount of capital that must be retained in the corporation.
  19. --------------- is changed by a stock split
    Par value is changed by a stock split
  20. ------------------------ is the practice of selling a new issue of a security for less than its current market price.
    Underpricing is the practice of selling a new issue of a security for less than its current market price.
Author:
Joens1313
ID:
313528
Card Set:
BEC 5
Updated:
2015-12-23 04:13:42
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BEC
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Description:
BEC 5
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