公司理财名词解释习题.doc

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1、CONCEPTQUESTIONS-CHAPTER11.1·Whatarethethreebasicquestionsofcorporatefinance?a.Investmentdecision(capitalbudgeting):Whatlong-terminvestmentstrategyshouldafirmadopt?171/171b.Financingdecision(capitalstructure):Howmuchcashmustberaisedfortherequiredinvestments?c.Short-te

2、rmfinancedecision(workingcapital):Howmuchshort-termcashflowdoescompanyneedtopayitsbills.·Describecapitalstructure.Capitalstructureisthemixofdifferentsecuritiesusedtofinanceafirm'sinvestments.·Listthreereasonswhyvaluecreationisdifficult.Valuecreationisdifficultbecausei

3、tisnoteasytoobservecashflowsdirectly.Thereasonsare:171/171a.Cashflowsaresometimesdifficulttoidentify.b.Thetimingofcashflowsisdifficulttodetermine.c.Cashflowsareuncertainandthereforerisky.1.2·Whatisacontingentclaim?Acontingentclaimisaclaimwhosepayoffsaredependentonthev

4、alueofthefirmattheendoftheyear.Inmoregeneralterms,contingentclaimsdependonthevalueofanunderlyingasset.·Describeequityanddebtascontingentclaims.Bothdebtandequitydependonthevalueofthefirm.Ifthevalueofthefirmisgreaterthanthe171/171amountowedtodebtholders,theywillgetwhatt

5、hefirmowesthem,whilestockholderswillgetthedifference.Butifthevalueofthefirmislessthanequity,bondholderswillgetthevalueofthefirmandequityholdersnothing.1.3·Defineaproprietorship,apartnershipandacorporation.Aproprietorshipisabusinessownedbyasingleindividualwithunlimited

6、liability.Apartnershipisabusinessownedbytwoormoreindividualswithunlimitedliability.Acorporationisabusinesswhichisa"legalperson"withmanylimitedliabilityowners.171/171·Whataretheadvantagesofthecorporateformofbusinessorganization?Limitedliability,eastofownershiptransfera

7、ndperpetualsuccession.1.4·Whatarethetwotypesofagencycosts?Monitoringcostsoftheshareholdersandtheincentivefeespaidtothemanagers.·Howaremanagersbondedtoshareholders?a.Shareholdersdeterminethemembershiptotheboardofdirectors,whichselectsmanagement.b.Managementcontractsand

8、incentivesarebuildintocompensationarrangements.171/171a.Ifafirmistakenoverbecausethefirm'spricedropped,managerscouldlosethei