Store

Test Bank for Foundations of Finance 9th Edition by Arthur J. Keown John D. Martin J. William Petty

By: Arthur J. Keown John D. Martin J. William Petty
ISBN-10: 0134083288
/ ISBN-13: 9780134084046

Resource Type Information

Edition: 9th Edition
Authors: Arthur J. Keown John D. Martin J. William Petty
Secure Stripe Payment Logo.png

$30.00 $28.50

Instant Download to your account.

Description

PART 1 The Scope and Environment of Financial Management

    • 1 An Introduction to the Foundations of Financial Management
    • The Goal of the Firm
    • Five Principles That Form the Foundations of Finance
    • Principle 1: Cash Flow Is What Matters
    • Principle 2: Money Has a Time Value
    • Principle 3: Risk Requires a Reward
    • Principle 4: Market Prices Are Generally Right
    • Principle 5: Conflicts of Interest Cause Agency Problems
    • The Global Financial Crisis
    • Avoiding Financial Crisis—Back to the Principles
    • The Essential Elements of Ethics and Trust
    • The Role of Finance in Business
    • Why Study Finance?
    • The Role of the Financial Manager
    • The Legal Forms of Business Organization
    • Sole Proprietorships
    • Partnerships
    • Corporations
    • Organizational Form and Taxes: The Double Taxation on Dividends
    • S-Corporations and Limited Liability Companies (LLCs)
    • Which Organizational Form Should Be Chosen?
    • Finance and the Multinational Firm: The New Role
    • Chapter Summaries
    • Review Questions
    • Mini Case
    • 2 The Financial Markets and Interest Rates
    • Financing of Business: The Movement of Funds Through the Economy
    • Public Offerings Versus Private Placements
    • Primary Markets Versus Secondary Markets
    • The Money Market Versus the Capital Market
    • Spot Markets Versus Futures Markets
    • Stock Exchanges: Organized Security Exchanges Versus Over-the-Counter Markets, a Blurring Difference
    • Selling Securities to the Public
    • Functions
    • Distribution Methods
    • Private Debt Placements
    • Flotation Costs
    • Regulation Aimed at Making the Goal of the Firm Work: The Sarbanes-Oxley Act
    • Rates of Return in the Financial Markets
    • Rates of Return over Long Periods
    • Interest Rate Levels in Recent Periods
    • Interest Rate Determinants in a Nutshell
    • Estimating Specific Interest Rates Using Risk Premiums
    • Real Risk-Free Interest Rate and the Risk-Free Interest Rate
    • Real and Nominal Rates of Interest
    • Inflation and Real Rates of Return: The Financial Analyst’s Approach
    • The Term Structure of Interest Rates
    • Shifts in the Term Structures of Interest Rates
    • What Explains the Shape of the Term Structure?
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • 3 Understanding Financial Statements and Cash Flows
    • The Income Statement
    • Coca-Cola’s Income Statement
    • Restating Coca-Cola’s Income Statement
    • The Balance Sheet
    • Types of Assets
    • Types of Financing
    • Coca-Cola’s Balance Sheet
    • Working Capital
    • Measuring Cash Flows
    • Profits Versus Cash Flows
    • The Beginning Point: Knowing When a Change in the Balance Sheet Is a Source or Use of Cash
    • Statement of Cash Flows
    • Concluding Suggestions for Computing Cash Flows
    • What Have We Learned about Coca-Cola?
    • GAAP and IFRS
    • Income Taxes and Finance
    • Computing Taxable Income
    • Computing the Taxes Owed
    • The Limitations of Financial Statements and Accounting Malpractice
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • Appendix 3A: Free Cash Flows
    • Computing Free Cash Flows
    • Computing Financing Cash Flows
    • Study Problems
    • 4 Evaluating a Firm’s Financial Performance
    • The Purpose of Financial Analysis
    • Measuring Key Financial Relationships
    • Question 1: How Liquid Is the Firm—Can It Pay Its Bills?
    • Question 2: Are the Firm’s Managers Generating Adequate Operating Profits on the Company’s Asset
    • Managing Operations
    • Managing Assets
    • Question 3: How Is the Firm Financing Its Assets?
    • Question 4: Are the Firm’s Managers Providing a Good Return on the Capital Provided by the Company
    • Question 5: Are the Firm’s Managers Creating Shareholder Value?
    • The Limitations of Financial Ratio Analysis
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case

PART 2 The Valuation of Financial Assets

    • 5 The Time Value of Money
    • Compound Interest, Future Value, and Present Value
    • Using Timelines to Visualize Cash Flows
    • Techniques for Moving Money Through Time
    • Two Additional Types of Time Value of Money Problems
    • Applying Compounding to Things Other Than Money
    • Present Value
    • Annuities
    • Compound Annuities
    • The Present Value of an Annuity
    • Annuities Due
    • Amortized Loans
    • Making Interest Rates Comparable
    • Calculating the Interest Rate and Converting It to an EAR
    • Finding Present and Future Values With Nonannual Periods
    • Amortized Loans With Monthly Compounding
    • The Present Value of an Uneven Stream and Perpetuities
    • Perpetuities
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • 6 The Meaning and Measurement of Risk and Return
    • Expected Return Defined and Measured
    • Risk Defined and Measured
    • Rates of Return: The Investor’s Experience
    • Risk and Diversification
    • Diversifying Away the Risk
    • Measuring Market Risk
    • Measuring a Portfolio’s Beta
    • Risk and Diversification Demonstrated
    • The Investor’s Required Rate of Return
    • The Required Rate of Return Concept
    • Measuring the Required Rate of Return
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • 7 The Valuation and Characteristics of Bonds
    • Types of Bonds
    • Debentures
    • Subordinated Debentures
    • Mortgage Bonds
    • Eurobonds
    • Convertible Bonds
    • Terminology and Characteristics of Bonds
    • Claims on Assets and Income
    • Par Value
    • Coupon Interest Rate
    • Maturity
    • Call Provision
    • Indenture
    • Bond Ratings
    • Defining Value
    • What Determines Value?
    • Valuation: The Basic Process
    • Valuing Bonds
    • Bond Yields
    • Yield to Maturity
    • Current Yield
    • Bond Valuation: Three Important Relationships
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • 8 The Valuation and Characteristics of Stock
    • Preferred Stock
    • The Characteristics of Preferred Stock
    • Valuing Preferred Stock
    • Common Stock
    • The Characteristics of Common Stock
    • Valuing Common Stock
    • The Expected Rate of Return of Stockholders
    • The Expected Rate of Return of Preferred Stockholders
    • The Expected Rate of Return of Common Stockholders
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • 9 The Cost of Capital
    • The Cost of Capital: Key Definitions and Concepts
    • Opportunity Costs, Required Rates of Return, and the Cost of Capital
    • The Firm’s Financial Policy and the Cost of Capital
    • Determining the Costs of the Individual Sources of Capital
    • The Cost of Debt
    • The Cost of Preferred Stock
    • The Cost of Common Equity
    • The Dividend Growth Model
    • Issues in Implementing the Dividend Growth Model
    • The Capital Asset Pricing Model
    • Issues in Implementing the CAPM
    • The Weighted Average Cost of Capital
    • Capital Structure Weights
    • Calculating the Weighted Average Cost of Capital
    • Calculating Divisional Costs of Capital
    • Estimating Divisional Costs of Capital
    • Using Pure Play Firms to Estimate Divisional WACCs
    • Using a Firm’s Cost of Capital to Evaluate New Capital Investments
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Cases

PART 3 Investment in Long-Term Assets

    • 10 Capital-Budgeting Techniques and Practice
    • Finding Profitable Projects
    • Capital-Budgeting Decision Criteria
    • The Payback Period
    • The Net Present Value
    • Using Spreadsheets to Calculate the Net Present Value
    • The Profitability Index (Benefit–Cost Ratio)
    • The Internal Rate of Return
    • Computing the IRR for Uneven Cash Flows with a Financial Calculator
    • Viewing the NPV–IRR Relationship: The Net Present Value Profile
    • Complications with the IRR: Multiple Rates of Return
    • The Modified Internal Rate of Return (MIRR)
    • Using Spreadsheets to Calculate the MIRR
    • A Last Word on the MIRR
    • Capital Rationing
    • The Rationale for Capital Rationing
    • Capital Rationing and Project Selection
    • Ranking Mutually Exclusive Projects
    • The Size-Disparity Problem
    • The Time-Disparity Problem
    • The Unequal-Lives Problem
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • 11 Cash Flows and Other Topics in Capital Budgeting
    • Guidelines for Capital Budgeting
    • Use Free Cash Flows Rather Than Accounting Profits
    • Think Incrementally
    • Beware of Cash Flows Diverted from Existing Products
    • Look for Incidental or Synergistic Effects
    • Work in Working-Capital Requirements
    • Consider Incremental Expenses
    • Remember That Sunk Costs Are Not Incremental Cash Flows
    • Account for Opportunity Costs
    • Decide If Overhead Costs Are Truly Incremental Cash Flows
    • Ignore Interest Payments and Financing Flows
    • Calculating a Project’s Free Cash Flows
    • What Goes into the Initial Outlay
    • What Goes into the Annual Free Cash Flows over the Project’s Life
    • What Goes into the Terminal Cash Flow
    • Calculating the Free Cash Flows
    • A Comprehensive Example: Calculating Free Cash Flows
    • Options in Capital Budgeting
    • The Option to Delay a Project
    • The Option to Expand a Project
    • The Option to Abandon a Project
    • Options in Capital Budgeting: The Bottom Line
    • Risk and the Investment Decision
    • What Measure of Risk Is Relevant in Capital Budgeting?
    • Measuring Risk for Capital-Budgeting Purposes with a Dose of Reality—Is Systematic Risk All There
    • Incorporating Risk into Capital Budgeting
    • Risk-Adjusted Discount Rates
    • Measuring a Project’s Systematic Risk
    • Using Accounting Data to Estimate a Project’s Beta
    • The Pure Play Method for Estimating Beta
    • Examining a Project’s Risk Through Simulation
    • Conducting a Sensitivity Analysis Through Simulation
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • Appendix 11A: The Modified Accelerated Cost Recovery System
    • What Does All This Mean?
    • Study Problems

PART 4 Capital Structure and Dividend Policy

    • 12 Determining the Financing Mix
    • Understanding the Difference Between Business and Financial Risk
    • Business Risk
    • Operating Risk
    • Break-Even Analysis
    • Essential Elements of the Break-Even Model
    • Finding the Break-Even Point
    • The Break-Even Point in Sales Dollars
    • Sources of Operating Leverage
    • Financial Leverage
    • Combining Operating and Financial Leverage
    • Capital Structure Theory
    • A Quick Look at Capital Structure Theory
    • The Importance of Capital Structure
    • Independence Position
    • The Moderate Position
    • Firm Value and Agency Costs
    • Agency Costs, Free Cash Flow, and Capital Structure
    • Managerial Implications
    • The Basic Tools of Capital Structure Management
    • EBIT-EPS Analysis
    • Comparative Leverage Ratios
    • Industry Norms
    • Net Debt and Balance-Sheet Leverage Ratios
    • A Glance at Actual Capital Structure Management
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Cases
    • 13 Dividend Policy and Internal Financing
    • Key Terms
    • Does Dividend Policy Matter to Stockholders?
    • Three Basic Views
    • Making Sense of Dividend Policy Theory
    • What Are We to Conclude?
    • The Dividend Decision in Practice
    • Legal Restrictions
    • Liquidity Constraints
    • Earnings Predictability
    • Maintaining Ownership Control
    • Alternative Dividend Policies
    • Dividend Payment Procedures
    • Stock Dividends and Stock Splits
    • Stock Repurchases
    • A Share Repurchase as a Dividend Decision
    • The Investor’s Choice
    • A Financing or an Investment Decision?
    • Practical Considerations—The Stock Repurchase Procedure
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case

PART 5 Working-Capital Management and International Business Finance

    • 14 Short-Term Financial Planning
    • Financial Forecasting
    • The Sales Forecast
    • Forecasting Financial Variables
    • The Percent of Sales Method of Financial Forecasting
    • Analyzing the Effects of Profitability and Dividend Policy on DFN
    • Analyzing the Effects of Sales Growth on a Firm’s DFN
    • Limitations of the Percent of Sales Forecasting Method
    • Constructing and Using a Cash Budget
    • Budget Functions
    • The Cash Budget
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • 15 Working-Capital Management
    • Managing Current Assets and Liabilities
    • The Risk–Return Trade-Off
    • The Advantages of Current versus Long-term Liabilities: Return
    • The Disadvantages of Current versus Long-term Liabilities: Risk
    • Determining the Appropriate Level of Working Capital
    • The Hedging Principle
    • Permanent and Temporary Assets
    • Temporary, Permanent, and Spontaneous Sources of Financing
    • The Hedging Principle: A Graphic Illustration
    • The Cash Conversion Cycle
    • Estimating the Cost of Short-Term Credit Using the Approximate Cost-of-Credit Formula
    • Sources of Short-Term Credit
    • Unsecured Sources: Accrued Wages and Taxes
    • Unsecured Sources: Trade Credit
    • Unsecured Sources: Bank Credit
    • Unsecured Sources: Commercial Paper
    • Secured Sources: Accounts-Receivable Loans
    • Secured Sources: Inventory Loans
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • 16 International Business Finance
    • The Globalization of Product and Financial Markets
    • Foreign Exchange Markets and Currency Exchange Rates
    • Foreign Exchange Rates
    • What a Change in the Exchange Rate Means for Business
    • Exchange Rates and Arbitrage
    • Asked and Bid Rates
    • Cross Rates
    • Types of Foreign Exchange Transactions
    • Exchange Rate Risk
    • Interest Rate Parity
    • Purchasing-Power Parity and the Law of One Price
    • The International Fisher Effect
    • Capital Budgeting for Direct Foreign Investment
    • Foreign Investment Risks
    • Chapter Summaries
    • Review Questions
    • Study Problems
    • Mini Case
    • CHAPTER 17 Cash, Receivables, and Inventory Management

Appendix A: Using a Calculator

Glossary

    • A
    • B
    • C
    • D
    • E
    • F
    • G
    • H
    • I
    • J
    • L
    • M
    • N
    • O
    • P
    • R
    • S
    • T
    • U
    • V
    • W
    • Y
    • Z

Indexes

    • A
    • B
    • C
    • D
    • E
    • F
    • G
    • H
    • I
    • J
    • L
    • M
    • N
    • P
    • Q
    • R
    • S
    • T
    • U
    • V
    • W
    • Y
    • Z

Corporate

  • A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • J
  • K
  • L
  • M
  • N
  • O
  • P
  • Q
  • R
  • S
  • T
  • U
  • V
  • W
  • X
  • Y

Additional Information


Resource Type:

Ebook Title:

Authors:

Edition:

9th-editio

Related Test Books

Reviews

Your #1 Online Study Guide Resource

* We don’t share your personal info with anyone. Check out our Privacy Policy for more information