WGU C214 FINANCIAL MANAGEMENT FAST AND FURIOUS EXAM |GUARANTEED |VERIFIED
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Course
WGU C214 Financial Management Fast and Furious
Institution
WGU C214 Financial Management Fast And Furious
T1 Primary financial markets - Accurate Answersthe markets in which securities (stocks and bonds) are first issued. This is where the issuers (the firms) and the buyers (the investors) will engage in an exchange.
T1 Syndicate - Accurate AnswersWhen a company wants to issue stock, bonds, or other...
WGU C214 FINANCIAL
MANAGEMENT FAST AND FURIOUS
EXAM |GUARANTEED |VERIFIED
T1 Primary financial markets - Accurate Answers✔✔the markets in
which securities (stocks and bonds) are first issued. This is where the
issuers (the firms) and the buyers (the investors) will engage in an
exchange.
T1 Syndicate - Accurate Answers✔✔When a company wants to issue
stock, bonds, or other publicly traded securities, it hires an * underwriter
* to manage what is often a long and complex process.
After determining the offering structure, the underwriter usually
assembles what is called a syndicate to get help manage the minutiae
(and risk) of large offerings. A syndicate is a group of investment banks
and brokerage firms that commit to sell a certain percentage of the
offering.
A group of intermediaries that is used to oversee the issuance of stocks
and bonds. Syndicates are generally made up of large investment banks
or other types of institutional investors.
Competitive sale - Accurate Answers✔✔those wishing to underwrite the
bond issue will submit bids (on the bond's prices and interest rate) to the
issuing firm. The firm will then select the underwriter that offered the
highest price and lowest interest rate. The underwriter will then sell the
bonds to various investors at (hopefully) a slightly higher price than that
at which the bonds were purchased
,Negotiated sale - Accurate Answers✔✔is the process of underwriters
submitting proposals including bids. *involves a more thorough
interview process with the underwriters.* The issuing firm will carefully
select the management team that will place these bonds.
Secondary Financial Markets - Accurate Answers✔✔Where securities
after they are sold for the first time are traded.
Auction Market - Accurate Answers✔✔A market with a physical
location and prices are set by the investors willingness to pay. (New york
Stock Exchange)
Dealer Market - Accurate Answers✔✔*No physical location* made up
of multiple dealers who take inventory of stocks and prices (NASDAQ)
The bid Ask spread - Accurate Answers✔✔the difference between the
bid price and the ask price
Limit orders - Accurate Answers✔✔orders that are price contingent -
orders are only executed if the value of the market reaches the price of
the limit.
Market Orders - Accurate Answers✔✔Orders that are time contingent -
First come first serve
,Friedmans three roles of prices. - Accurate Answers✔✔1. Prices convey
information to consumers.
2. prices affect incentives
3. prices affect the distribution of income
Price Efficiency - Accurate Answers✔✔whether prices fully reflect all
of the available information about a particular security
Dollar Returns - Accurate Answers✔✔calculated by taking the
difference between the price of the security during the previous time
period and the price of the security at the current time period, plus any
additional cash flow that came from the security
Percentage Returns - Accurate Answers✔✔Percentage returns are
calculated by simply dividing the dollar returns by the price of the
security at time t-1, or the previous time period.
Agency Cost - Accurate Answers✔✔costs that are incurred when
management does not act in the best interests of shareholders
2 issues that effect *profit maximization* - Accurate Answers✔✔1.
Agency Costs
2. Potential effect of focusing solely on profits (Ethics)
Cash Flow Statement - Accurate Answers✔✔Cash flows from
*operations, investing and financing activities*
, Cash accounting - Accurate Answers✔✔counts cash out as expense and
cash in as revenue
Accrual accounting - Accurate Answers✔✔Revenue is recognized when
the earnings process is complete.
Revenue Recognition - Accurate Answers✔✔Timing of recognition of
sales or income based on certain rules.
Gross Profit - Accurate Answers✔✔Revenue - Cost of goods sold
(COGS)
EBIT - Accurate Answers✔✔Earnings before Interest and Taxes (AKA
*Operating Income*)
COGS - Accurate Answers✔✔Cost of goods sold = direct labor and
materials.
Gross Fixed Assets - Accurate Answers✔✔the original cost of the firm's
fixed assets before accumulated depreciation
Net PP&E - Accurate Answers✔✔original purchase price (historical
cost) minus accumulated depreciation
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