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| The _____ of any investment based on cash flows the asset is expected to generate during its life |
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| The balance sheet account that indicates the total amount of earning the firm has not paid out as dividends throughout its history |
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| Assets=Liabilities+Owners Equity |
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| What is the basic accounting prinriple? |
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| What is known as a legal IOU? |
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| Market that corporations use to raise new capital. |
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| Agency in charge of regulating banks and other financial institutions. |
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| Improve Economic Well-Being |
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| What is the benefit from intermediaries that is most important? |
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| Rate the fed charges for loans it makes to banks to meet temporary shortages in required reserves. |
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| Factor that influences the market. |
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| Concept that we should improve the quality of life of all stakeholders for all generations, both current and future |
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| Results in greater efficiency by reducing waste and excess. |
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| Asset that represents a promise to distribute cash flows at some future time. |
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| Sum of common stock + paid in capital + retained earnings |
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| Total common equity equals |
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| Most common form of debt. |
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| Virtually Risk less Debt. |
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| Interest paid on a bond that is stated as a percentage of its face value. |
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| Debt similar to post dated check. |
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| High risk High yield bond. |
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| Stock or any other security representing ownership interest. |
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| Disadvantage of preferred stock |
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| Document that gives one persons right to vote to another person. |
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| Gives holder right to purchase stock at predetermined price |
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| Type of transfer where a business sells its stock directly to investors |
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| Indirect transfer through financial intermediary |
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| Bank or mutual fund obtains funds from savers and uses the money to lend or purchase securities. |
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| Most common over the counter security that is traded. |
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| National association of securities dealers automated quotation system |
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| Organization that underwrites and distributes new issues of securities |
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| Securities exchange commission |
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Definition
| Regulates all nation securities exchanges, controls trades by corporate insiders, and prohibits manipulation of securities prices |
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| Large institutions help facilitate the transfer of funds from those who have funds to those who need funds. |
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| Unlimited life, easily transferred in form of stock and limited liability. |
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| Section on a balance sheet where you find accrued expenses. |
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| Materials for production and assembly line salaries |
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Definition
| What is included in calculation of cost of goods? |
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| Statement of cash flows account will be effected when a company purchases a building to open a retail store. |
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| Get an estimated prediction for future sales |
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| Benefits you could have received by taking al alternative action. |
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| Series of payments of an equal amount at fixed, equal intervals for a specified number of periods. |
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| The value of a stock/bond is based on the present value of the cash flows that the asset is expected to produce in the future |
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Definition
| Basic valuation of stock/bond |
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| Stocks of companies that are expected to earn substantial profits in the future. |
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Definition
| Investors are attracted to what kind of stock? |
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Term
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Definition
| When rates of financial markets increase, the proces of financial assets _______. |
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| Firms current value is related to its future growth opportunities. |
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Definition
| Benefit that maximizes value for corporations. |
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| Focus on stockholder wealth maximization |
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Definition
| Primary goal of management |
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| FirmsUsed to predict company performance. |
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| Financial report does not reflect past or future company performance. |
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| Summarizes the revenues generated and expenses occurred. Also known as profit loss statement. |
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| Bottom line, or profit for the firm over the year |
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| Statement of cash flow that delivery would be listed. |
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| Problem that a company will face from forecasting smaller than actual demand. |
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| Outcome generated at the break-even point. |
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| More sales... More Profit |
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Definition
| In a highly leveraged company __________. |
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| Over valued, dont purchase. |
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Definition
| Firms can reduce risk by ________. |
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| Measure that determines the degree to which two variables movements are associated. |
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Definition
| WACC is a ___________ decision. |
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Term
| A firm should invest in projects that are expected to provide returns greater than its WACC |
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Definition
| How is the cost of capital used to make decisions? |
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| The chance that an outcome other than the expected one will occur. |
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| Most utilized and excellent tool for investing. |
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| Purchase investments with current savings in anticipation of relatively stable growth on average in the long term |
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| Offers a variety of services including research info, investment recommendations, and advisory services. |
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| Index that offers the broadest market measure available. |
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| Market characterized by pessimism |
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Definition
| If you anticipate or expect a stock to increase in price/value, you should? |
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Term
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Definition
| When shortselling, the potential for loss is ____________. |
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Definition
| Second stage of a business cycle. |
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Definition
| Shows the relationship between risk as measured b beta and the required rate of return for individual securities. |
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| Perform best during expansions and worst during contractions |
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Definition
| Cyclical industries tend to _____ |
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Term
| Increasing at a decreasing rate |
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Definition
| During an industry life cycle, the expansion (growth) phase is characterized by : |
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| Trend that lasts from a few weeks to several months |
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| Growth stocks typically____ |
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| Market that is the most similar to todays. |
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| Existing market prices reflect all public and private info |
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| Luxuries are most associated with this type in industry |
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| Analysis of past prices and volume from historical data |
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