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Study sets matching "cfa corporate finance"

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Study sets matching "cfa corporate finance"

9 terms
CFA corporate finance`
The typical steps in the capital budge…
Projects susceptible to capital budget…
The average accounting rate of return…
The profitability index
1) generating ideas, 2) analyzing individual proposals, 3) pl…
1) replacement, 2) expansion, 3) new products and services, a…
The typical steps in the capital budge…
1) generating ideas, 2) analyzing individual proposals, 3) pl…
Projects susceptible to capital budget…
1) replacement, 2) expansion, 3) new products and services, a…
91 terms
corporate finance cfa
compute beta capital using debt to cap…
The unlevered beta is often referred t…
beta estimates are sensitive to
two methods to estimate the before-tax…
The unlevered beta is often referred to as the asset beta bec…
the method of estimation and data used.
the yield-to-maturity approach and debt-rating approach.
compute beta capital using debt to cap…
The unlevered beta is often referred t…
The unlevered beta is often referred to as the asset beta bec…
117 terms
Corporate Finance - CFA 1
Capital Budgeting
Typical capital budgeting steps (4)
5 key principles of capital budgeting
Independent projects
the process that companies use for decision making on long-te…
1) Generate good investment ideas... 2) forecast CF for each pro…
1) Decisions are based on *incremental cash flows*... 2) Conside…
two projects do not depend on each other
Capital Budgeting
the process that companies use for decision making on long-te…
Typical capital budgeting steps (4)
1) Generate good investment ideas... 2) forecast CF for each pro…
106 terms
CFA - Corporate Finance
What are the four administrative steps…
What are the five key principals of ca…
What is cannibalization?
What is a conventional and unconventio…
1. Idea generation... 2. Analyzing project proposals... 3. Create t…
1. Decisions are based on cash flows, not accounting income.…
Occurs when a new project takes sales from an existing product.
It is conventional if the sign on the cash flows changes only…
What are the four administrative steps…
1. Idea generation... 2. Analyzing project proposals... 3. Create t…
What are the five key principals of ca…
1. Decisions are based on cash flows, not accounting income.…
27 terms
CFA L1 -- Corporate Finance
Operating breakeven quantity
Breakeven quantity
Float factor
Secondary sources of liquidity
Average daily float/Average daily deposit
- Re-negotiating debt... - Liquidating assets... - Bankruptcy/Re-…
Operating breakeven quantity
Breakeven quantity
117 terms
Corporate Finance - CFA 1
Capital Budgeting
Typical capital budgeting steps (4)
5 key principles of capital budgeting
Independent projects
the process that companies use for decision making on long-te…
1) Generate good investment ideas... 2) forecast CF for each pro…
1) Decisions are based on *incremental cash flows*... 2) Conside…
two projects do not depend on each other
Capital Budgeting
the process that companies use for decision making on long-te…
Typical capital budgeting steps (4)
1) Generate good investment ideas... 2) forecast CF for each pro…
117 terms
Corporate Finance - CFA 1
Capital Budgeting
Typical capital budgeting steps (4)
5 key principles of capital budgeting
Independent projects
the process that companies use for decision making on long-te…
1) Generate good investment ideas... 2) forecast CF for each pro…
1) Decisions are based on *incremental cash flows*... 2) Conside…
two projects do not depend on each other
Capital Budgeting
the process that companies use for decision making on long-te…
Typical capital budgeting steps (4)
1) Generate good investment ideas... 2) forecast CF for each pro…
36 terms
CFA 2 Corporate Finance
Agency costs (dividends and share repos)
Cash vs stock mergers... Takeaways:... • St…
Clientele effect (Dividend policies)…
Conglomerate mergers... Not so attractiv…
Investors are worried that management may take on new project…
*Cash offer: target shareholder's gains are capped at the amo…
*Different groups of investors prefer different dividend poli…
Least likely for mature growth and stabilised companies. In t…
Agency costs (dividends and share repos)
Investors are worried that management may take on new project…
Cash vs stock mergers... Takeaways:... • St…
*Cash offer: target shareholder's gains are capped at the amo…
90 terms
CFA Corporate Finance
Capital Budgeting
Incremental
Sunk Cost
externalities
4 steps of the ____ _____ process are 1. Idea Generation, 2.…
____ Cash Flows are the changes in CFs that will occur if the…
A ____ _____ is a cost that cannot be avoided even if the pro…
the effects the acceptance of a project may have on other fir…
Capital Budgeting
4 steps of the ____ _____ process are 1. Idea Generation, 2.…
Incremental
____ Cash Flows are the changes in CFs that will occur if the…
52 terms
Corporate Finance CFA 1
Capital budgeting steps
Capital budgeting assumptions
Externality
Cannibalization
1. Generating Ideas... 2. Analyzing individual proposals... 3. Plan…
1. Decisions are based on CF rather than accounting concepts,…
effect of an investment on other things beside investment its…
when an investment takes customers and sales from another par…
Capital budgeting steps
1. Generating Ideas... 2. Analyzing individual proposals... 3. Plan…
Capital budgeting assumptions
1. Decisions are based on CF rather than accounting concepts,…
44 terms
CFA II: Corporate Finance
Capital Budgeting:... calculate the yearl…
Capital Budgeting:... explain how inflati…
Capital Budgeting:... evaluate capital pr…
Capital Budgeting:... describe types of r…
The depreciation method and speed effects the book value- suc…
- Have to determine whether or not to use real or nominal cas…
Least Common multiple of Lives - the analyst extends the time…
Timing Options - ... Instead of investing now, the company can d…
Capital Budgeting:... calculate the yearl…
The depreciation method and speed effects the book value- suc…
Capital Budgeting:... explain how inflati…
- Have to determine whether or not to use real or nominal cas…
35 terms
CFA 2 - Corporate Finance
Capital Budgeting Expansion... (initial o…
Capital Budgeting Expansion... (Op. Cash…
Capital Budgeting Expansion... (TNOCF)
Capital Budgeting (replacement)
Initial outlay = FCInv + WCInv
CF = (S-C)(1-T) + DT
TNOCF = Sal + NWCInv - T(Sal - BV)
- Same as expansion, except current after-tax salvage of old…
Capital Budgeting Expansion... (initial o…
Initial outlay = FCInv + WCInv
Capital Budgeting Expansion... (Op. Cash…
CF = (S-C)(1-T) + DT
117 terms
Corporate Finance - CFA 1
Capital Budgeting
Typical capital budgeting steps (4)
5 key principles of capital budgeting
Independent projects
the process that companies use for decision making on long-te…
1) Generate good investment ideas... 2) forecast CF for each pro…
1) Decisions are based on *incremental cash flows*... 2) Conside…
two projects do not depend on each other
Capital Budgeting
the process that companies use for decision making on long-te…
Typical capital budgeting steps (4)
1) Generate good investment ideas... 2) forecast CF for each pro…
97 terms
CFA Level 1 - Corporate Finance
Capital Budgeting process
Capital Budgeting Steps
Cap Budgeting Principals
Externalities
identifying and evaluating capital projects....projects where…
1) idea generation... 2) analyzing project proposals... 3) create t…
1) decisions based on cash flows, not accounting income... 2) Ca…
effects the acceptance of a project may have on other firm ca…
Capital Budgeting process
identifying and evaluating capital projects....projects where…
Capital Budgeting Steps
1) idea generation... 2) analyzing project proposals... 3) create t…
34 terms
CFA 1 - Corporate Finance (Concepts)
Capital budgeting
Categories of capital projects
NPV
payback (discounted payback) period
Process of evaluating capital projects (projects with cash fl…
1. Replacement projects for maintaining the business or for c…
sum of the present values of a project's expected cash flows…
the number of years required to recover the original cost of…
Capital budgeting
Process of evaluating capital projects (projects with cash fl…
Categories of capital projects
1. Replacement projects for maintaining the business or for c…
39 terms
Corporate Finance - CFA
Capital Budgeting
Categories of capital budgeting projects
5 Key Principles of Capital Budgeting
Capital Budgeting Methods
Identifying and evaluating projects for which the cash flows…
- Replacement projects to maintain the business... - Replacement…
1. Decisions are based on incremental cash flows. Sunk costs…
Payback period - the number of years taken to recover the ini…
Capital Budgeting
Identifying and evaluating projects for which the cash flows…
Categories of capital budgeting projects
- Replacement projects to maintain the business... - Replacement…
117 terms
Corporate Finance - CFA 1
Capital Budgeting
Typical capital budgeting steps (4)
5 key principles of capital budgeting
Independent projects
the process that companies use for decision making on long-te…
1) Generate good investment ideas... 2) forecast CF for each pro…
1) Decisions are based on *incremental cash flows*... 2) Conside…
two projects do not depend on each other
Capital Budgeting
the process that companies use for decision making on long-te…
Typical capital budgeting steps (4)
1) Generate good investment ideas... 2) forecast CF for each pro…
8 terms
CFA - Corporate Finance
Operating Break even Quantity
Breakpoint
Business Risk
NPV
Fixed Operating Cost / (Price Per Unit/VC Per Unit)
amount of capital where component cost changes / weight of co…
demand variability, sales price variability, input price vari…
preferred criterion when ranking projects because it measures…
Operating Break even Quantity
Fixed Operating Cost / (Price Per Unit/VC Per Unit)
Breakpoint
amount of capital where component cost changes / weight of co…
20 terms
CFA Corporate Finance Sheet
d/p
d1/p0 + g
irr
asset beta
cost of preferred stock (kp)
cost of equity capital (ke)
discount rate that makes NPV equal to 0
using the pure-play method for project beta. To delever the _…
d/p
cost of preferred stock (kp)
d1/p0 + g
cost of equity capital (ke)
20 terms
CFA II Corporate Finance
Economic Income
Accounting Income
Economic Profit... (Economic value added)eq
∆PPS
∆Mkt.value + netCF
Net Income
EBIT(1-T)-wacc(Capital)
D • [(1-Td)/(1-Tcg)]
Economic Income
∆Mkt.value + netCF
Accounting Income
Net Income
117 terms
Corporate Finance - CFA 1
Capital Budgeting
Typical capital budgeting steps (4)
5 key principles of capital budgeting
Independent projects
the process that companies use for decision making on long-te…
1) Generate good investment ideas... 2) forecast CF for each pro…
1) Decisions are based on *incremental cash flows*... 2) Conside…
two projects do not depend on each other
Capital Budgeting
the process that companies use for decision making on long-te…
Typical capital budgeting steps (4)
1) Generate good investment ideas... 2) forecast CF for each pro…
35 terms
CFA Level 1 - Corporate Finance
Capital Budgeting Process (4 Steps)
Categories of Capital Budgeting Proces…
Unconventional Cash Flows
5 Principles of Capital Budgeting
1. Generate Idea... 2. Analyze Projects... 3. Create Firm Budget... 4.…
1. Replacement to Maintain or Reduce Costs... 2. Expansion of cu…
More than one sign change
1. Cash Flow based, not accounting Income... 2. Opportunity cost…
Capital Budgeting Process (4 Steps)
1. Generate Idea... 2. Analyze Projects... 3. Create Firm Budget... 4.…
Categories of Capital Budgeting Proces…
1. Replacement to Maintain or Reduce Costs... 2. Expansion of cu…
90 terms
CFA Level II Corporate Finance
Shareholders wealth includes two eleme…
Principles of capital budgeting... 五大原则
Profit index
MACRS-half year convention... Modified ac…
Capital gain=P1-P0... Dividend income=D1... Holding period yield=…
1. NPV based on cash flow, not profit... 2. Based on incremental…
1.Assume the asset is placed in service in the middle of the…
Shareholders wealth includes two eleme…
Capital gain=P1-P0... Dividend income=D1... Holding period yield=…
Principles of capital budgeting... 五大原则
1. NPV based on cash flow, not profit... 2. Based on incremental…
35 terms
CFA Level 1 - Corporate Finance
Capital Budgeting Process (4 Steps)
Categories of Capital Budgeting Proces…
Unconventional Cash Flows
5 Principles of Capital Budgeting
1. Generate Idea... 2. Analyze Projects... 3. Create Firm Budget... 4.…
1. Replacement to Maintain or Reduce Costs... 2. Expansion of cu…
More than one sign change
1. Cash Flow based, not accounting Income... 2. Opportunity cost…
Capital Budgeting Process (4 Steps)
1. Generate Idea... 2. Analyze Projects... 3. Create Firm Budget... 4.…
Categories of Capital Budgeting Proces…
1. Replacement to Maintain or Reduce Costs... 2. Expansion of cu…
97 terms
CFA Level 1 - Corporate Finance
Capital Budgeting process
Capital Budgeting Steps
Cap Budgeting Principals
Externalities
identifying and evaluating capital projects....projects where…
1) idea generation... 2) analyzing project proposals... 3) create t…
1) decisions based on cash flows, not accounting income... 2) Ca…
effects the acceptance of a project may have on other firm ca…
Capital Budgeting process
identifying and evaluating capital projects....projects where…
Capital Budgeting Steps
1) idea generation... 2) analyzing project proposals... 3) create t…
97 terms
CFA Level 1 - Corporate Finance
Capital Budgeting process
Capital Budgeting Steps
Cap Budgeting Principals
Externalities
identifying and evaluating capital projects....projects where…
1) idea generation... 2) analyzing project proposals... 3) create t…
1) decisions based on cash flows, not accounting income... 2) Ca…
effects the acceptance of a project may have on other firm ca…
Capital Budgeting process
identifying and evaluating capital projects....projects where…
Capital Budgeting Steps
1) idea generation... 2) analyzing project proposals... 3) create t…
20 terms
CFA Level 1 - Corporate Finance
Weighted Average Cost of Capital
Cost of preferred stock
Cost of Equity using CAPM
Project Beta ... Pure play method
B asset = unlevered beta
Weighted Average Cost of Capital
Cost of preferred stock
27 terms
CFA Level II - Corporate Finance
Investment Outlay
NWCInv
After-tax Cash Flow (CF)
Terminal Year After-tax non operating…
=FCinv+NWCInv
=∆non-cash current assets - ∆non-debt current liabilities... li…
=(S-C-D)(1-t)+D... =(S-C)(1-t)+(D*t)... S=Sales... C=cash operating c…
=Sal(t)+NWCInv-(Sal(t)-B(t))*t... Sal(t)=pre-tax cash proceeds…
Investment Outlay
=FCinv+NWCInv
NWCInv
=∆non-cash current assets - ∆non-debt current liabilities... li…
91 terms
CFA Level 2 Corporate Finance
Externality
Cash flows
Modified Accelerated Cost Recovery Sys…
half year convention
the analyst should subtract the lost sales of the existing pr…
need to be considered on an after-tax basis
A "depreciation" approach common to the tac code; generally p…
assumes that the asset is placed in service in the middle of…
Externality
the analyst should subtract the lost sales of the existing pr…
Cash flows
need to be considered on an after-tax basis
67 terms
CFA Level II - Corporate Finance
TNOCF
NWCinv
Impact of Higher Depreciation on cash…
Initial Outlay
Terminal non-operating cash flows represent the salvage value…
change in non cash current assets - change in non debt curren…
Higher depreciation leads to lower tax expenses and thus high…
FCinv + NWCinv
TNOCF
Terminal non-operating cash flows represent the salvage value…
NWCinv
change in non cash current assets - change in non debt curren…
78 terms
CFA Level II - Corporate Finance
MM Proposition I Without Taxes (5 assu…
MM Proposition II without taxes: Highe…
Agency Costs
Financial Distress
1. Investors have homogenous expectations regarding the cash…
i.e., the cost of equity is a linear function of the company'…
Costs associated with the conflict of interest present when a…
heightened uncertainty regarding a company's ability to meet…
MM Proposition I Without Taxes (5 assu…
1. Investors have homogenous expectations regarding the cash…
MM Proposition II without taxes: Highe…
i.e., the cost of equity is a linear function of the company'…
97 terms
CFA Level 1 - Corporate Finance
Capital Budgeting process
Capital Budgeting Steps
Cap Budgeting Principals
Externalities
identifying and evaluating capital projects....projects where…
1) idea generation... 2) analyzing project proposals... 3) create t…
1) decisions based on cash flows, not accounting income... 2) Ca…
effects the acceptance of a project may have on other firm ca…
Capital Budgeting process
identifying and evaluating capital projects....projects where…
Capital Budgeting Steps
1) idea generation... 2) analyzing project proposals... 3) create t…
20 terms
CFA-Quick Sheet-Corporate Finance
WACC
Cost of Preferred Stock (Kps)
Cost of Equity Capital (Ke) not using…
Cost of Equity (Ke) using CAPM
(Wd)(Kd(1-t))+(Wps)(Kps)+(We)(Ke)
Dps/P
(D1/Po)+g ... dividend at time 1 over price at time 0 plus growth
Rf+b*(Rmarket-Rf)
WACC
(Wd)(Kd(1-t))+(Wps)(Kps)+(We)(Ke)
Cost of Preferred Stock (Kps)
Dps/P
97 terms
CFA Level 1 - Corporate Finance
Capital Budgeting process
Capital Budgeting Steps
Cap Budgeting Principals
Externalities
identifying and evaluating capital projects....projects where…
1) idea generation... 2) analyzing project proposals... 3) create t…
1) decisions based on cash flows, not accounting income... 2) Ca…
effects the acceptance of a project may have on other firm ca…
Capital Budgeting process
identifying and evaluating capital projects....projects where…
Capital Budgeting Steps
1) idea generation... 2) analyzing project proposals... 3) create t…
97 terms
CFA Level 1 - Corporate Finance
Capital Budgeting process
Capital Budgeting Steps
Cap Budgeting Principals
Externalities
identifying and evaluating capital projects....projects where…
1) idea generation... 2) analyzing project proposals... 3) create t…
1) decisions based on cash flows, not accounting income... 2) Ca…
effects the acceptance of a project may have on other firm ca…
Capital Budgeting process
identifying and evaluating capital projects....projects where…
Capital Budgeting Steps
1) idea generation... 2) analyzing project proposals... 3) create t…
48 terms
CFA Level 1 - Corporate Finance
Internal rate of return
IRR decision rule
Payback period
Profitability Index (PI)
discount rate that makes the PV of the expected incremental a…
determine required rate of return for given project.... IRR > re…
full years until recover + (unrecovered cost at beginning of…
PV of a projects future cash flows divided by the initial cas…
Internal rate of return
discount rate that makes the PV of the expected incremental a…
IRR decision rule
determine required rate of return for given project.... IRR > re…
125 terms
CFA level 2 corporate finance
FCInv+WCInv
(S-C)(1-T)+DT
SalT+NWCInv-T(SalT-BT)
delta non-cash current assets-delta no…
initial outlay formula for an expansion project
Cash flow formula for and expansion project... where ... S=sales... C…
TNOCF=?... Terminal year after tax non operating cash flows for…
NWCInv formula
FCInv+WCInv
initial outlay formula for an expansion project
(S-C)(1-T)+DT
Cash flow formula for and expansion project... where ... S=sales... C…
97 terms
CFA Level 1 - Corporate Finance
Capital Budgeting process
Capital Budgeting Steps
Cap Budgeting Principals
Externalities
identifying and evaluating capital projects....projects where…
1) idea generation... 2) analyzing project proposals... 3) create t…
1) decisions based on cash flows, not accounting income... 2) Ca…
effects the acceptance of a project may have on other firm ca…
Capital Budgeting process
identifying and evaluating capital projects....projects where…
Capital Budgeting Steps
1) idea generation... 2) analyzing project proposals... 3) create t…
113 terms
CFA Level II - Corporate Finance
What are the 5 principles of capital b…
Explain the 3 stages of evaluating cas…
What is the formula for a initial inve…
What is the formula for after-tax oper…
1. Decisions are based on incremental cash flows, not account…
1. Initial investment outlay ... 2. After-tax operating cash flo…
outlay = (FC)Inv + (NWC)Inv... NWC(Inv) = WC(Inv) - Salvage + T…
CF = (S - C)(1 - T) + (TD)... S = sales... C = cash operating cost…
What are the 5 principles of capital b…
1. Decisions are based on incremental cash flows, not account…
Explain the 3 stages of evaluating cas…
1. Initial investment outlay ... 2. After-tax operating cash flo…
200 terms
CFA: Corporate Finance and Portfolio Management
Cost of Debt
Sunk Cost
Opportunity Cost
Incremental Cash Flow
The cost of debt financing to a company, such as when it issu…
A cost that has already been incurred.
The value that investors forgo by choosing a particular cours…
The cash flow that is realized because of a decision; the cha…
Cost of Debt
The cost of debt financing to a company, such as when it issu…
Sunk Cost
A cost that has already been incurred.
17 terms
Corporate Finance CFA Level 1
Capital Budget Process
Capital Budgeting Projects
Capital Budgeting Assumptions
Sunk Cost vs. Opportunity Cost
Generating Ideas... Analyzing Individual Proposals... Planning the…
Replacement... Expansion... New Products and Services... Regulatory, S…
Decisions based on CF... Timing is crucial ... CF are based on op…
cost already been incurred... vs.... resource's worth in its nex…
Capital Budget Process
Generating Ideas... Analyzing Individual Proposals... Planning the…
Capital Budgeting Projects
Replacement... Expansion... New Products and Services... Regulatory, S…
127 terms
CFA Level 1 - Corporate Finance
Capital Budgeting process
Capital Budgeting Steps
Capital budgeting projects can be clas…
Capital budgeting concepts
The process that companies use for making long-term investmen…
1) idea generation - most important... 2) analyzing individual p…
-replacement projects - maintain normal business... -expansion p…
Sunk costs - costs that cannot be recovered once they have be…
Capital Budgeting process
The process that companies use for making long-term investmen…
Capital Budgeting Steps
1) idea generation - most important... 2) analyzing individual p…
110 terms
CFA Level 2 - Corporate Finance (5-15%)
Capital Budgeting Principal
Incremental Cash Flows
Initial Investment Outlay
After-Tax Operating CF
1. Decisions are based on incremental AFTER TAX cash flow.... -…
Cash flows are evaluated in 3 stages... - Initial investment out…
FCInv = cost of investment, getting it there... NWCInv = Change…
Add back depreciation tax shield because it is a non cash exp…
Capital Budgeting Principal
1. Decisions are based on incremental AFTER TAX cash flow.... -…
Incremental Cash Flows
Cash flows are evaluated in 3 stages... - Initial investment out…
48 terms
CFA Level 1 - Corporate Finance
Internal rate of return
IRR decision rule
Payback period
Profitability Index (PI)
discount rate that makes the PV of the expected incremental a…
determine required rate of return for given project.... IRR > re…
full years until recover + (unrecovered cost at beginning of…
PV of a projects future cash flows divided by the initial cas…
Internal rate of return
discount rate that makes the PV of the expected incremental a…
IRR decision rule
determine required rate of return for given project.... IRR > re…
48 terms
CFA Level II Corporate Finance
MACRS
MACRS Half-year convention
Depreciable basis
Calculating investment in net working…
Modified accelerated cost recovery system. An alternate metho…
Assumes that the asset is placed in service at the middle of…
Purchase price plus any shipping, handling or installation co…
change in non cash current assets - change in non debt curren…
MACRS
Modified accelerated cost recovery system. An alternate metho…
MACRS Half-year convention
Assumes that the asset is placed in service at the middle of…
98 terms
Corporate finance - CFA lvl 2
When will borrowing fund to pay divide…
traditional view in financing
MM dividend irrelevance
Bird-in-hand arguments
when after tax debt cost < earning yield (=EPS/P)
shareholders are indifferent to the addition of a SMALL amoun…
assume no tax/transaction cost... => investor can make homemade…
Re will increase when dividend payout is low, because more risk
When will borrowing fund to pay divide…
when after tax debt cost < earning yield (=EPS/P)
traditional view in financing
shareholders are indifferent to the addition of a SMALL amoun…
88 terms
CFA Lvl 2 Volume 2 Corporate Finance
Sunk costs
Externalities
cannibalization
5 principles of corp finance
costs that cannot be avoided, even if the project is not unde…
the effects the acceptance of a project may have on other fir…
occurs when a new project takes sales from an existing produc…
1) Decisions are based on cash flows, not accounting income.…
Sunk costs
costs that cannot be avoided, even if the project is not unde…
Externalities
the effects the acceptance of a project may have on other fir…
480 terms
My Corporate Finance_ CFA Level 1
Capital Budgeting Process
Steps in the Capital Budgeting Process
Types of Capital Projects
Principles of Capital Budgeting
Used to determine and select the most profitable long-term gr…
1. Idea generation... 2. analyze the project proposal ... 3. Create…
1 Replacement projects to maintain the business... 2 Replacement…
1 Decisions are made based on the changes in after-tax cash f…
Capital Budgeting Process
Used to determine and select the most profitable long-term gr…
Steps in the Capital Budgeting Process
1. Idea generation... 2. analyze the project proposal ... 3. Create…
26 terms
CFA Level II 2016: Corporate Finance
How does ... SENSITIVITY ANALYSIS ... look…
How does ... SCENARIO ANALYSIS ... look at r…
How does ... MONTE CARLO ANALYSIS ... look…
What is the static trade off theory?
One variable at a time
Multiple variables at a time; considers bull/base/bear case
Creates a simulation of several random variables at a time... L…
A firm should continue to add leverage until the ... cost of fi…
How does ... SENSITIVITY ANALYSIS ... look…
One variable at a time
How does ... SCENARIO ANALYSIS ... look at r…
Multiple variables at a time; considers bull/base/bear case
16 terms
CFA Level II Corporate Finance Part 2
Internal stakeholders
External stakeholders
Unethical behavior arises from
Friedman doctrine
• Shareholders... • Managers... • Employees... • BOD
• Customers... • Suppliers... • Creditors... • Unions... • Government... • L…
• Agents whose personal ethics are flawed are more likely to…
narrowly addresses the social responsibility of business and…
Internal stakeholders
• Shareholders... • Managers... • Employees... • BOD
External stakeholders
• Customers... • Suppliers... • Creditors... • Unions... • Government... • L…
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