Exam 1: Preliminary Concepts

Suppose you purchase one ANZ share at $28.38 in the morning and then sell it again at $27.57 at the close of trading that day.What has been your rate of return over the holding period?

When compared to Australian adult individuals,institutional investors rarely hold a significant portion of any one corporation.

An asset has a market value of $100,and intrinsic value of $105,and a present value of $113.What is the maximum amount you would want to pay now for the asset?

The capital market is where companies purchase and sell real (productive)assets.

Market capitalisation represents the market value of the firm.

Fisher's Separation Theorem demonstrates how individuals can substitute present consumption for future consumption.

Shares and bonds both give their holder a proportional ownership in the firm that issues them.

Individual companies will normally acquire funding through the sale of capital assets.

Capital budgeting is:

To ensure optimal benefit to an economy,corporations should apply which of the following resources in the most efficient way possible?

Who make the major decisions on how a company carries out its business?

In corporate finance we focus on which type of asset?

Cash flows generated by the firm can be ________________

An asset has a market value of $105,and an intrinsic value of $100,and a present value of $113.What is the maximum amount you would want to pay now for the asset?

Which of these is the financing decision?

The notion that $1 in the future is not the equivalent of $1 today is referred to as ____________________

Suppose you bought one NAB share for $28.38 on 1 July and then sold it for $27.57 on 1 August.On 25 July,you received a dividend of $1.47 on the share.What has been your rate of return over the holding period?

Which of the following does the ASIC not regulate?

The manner in which funds raised in capital markets are to be employed in productive activities is the subject of the ____________ decision.

Corporate finance is concerned with making decisions about what investments a company should make,how these investments are financed and how company directors should be remunerated.