CORPORATE ISSUERS archivos - Financertraining.com

How do we compute the cost of capital of companies using weighted averages?

In order to determine the cost of capital of corporations, we take the different components of capital and calculate a weighted average known as WACC (Weighted Average Cost of Capital). Which of the following sentences is correct regarding the calculation of WACC? a) It is a marginal cost. b) The marginal cost of ordinary equity

What are the main types of capital investments in Corporate Finance?

In the Corporate Issuers (Corporate Finance) area, we define capital investments as those with a life longer than one year, so they are included in the long-term portion of balance sheets. Which of the following types of capital investments is associated to machine replacement and infrastructure improvement? a) Going Concern Projects. b) Regulatory / Compliance

What is the main difference between the operating cycle and the net operating cycle?

When dealing with relevant periods in each company, such as the reception of inventory from suppliers, the reception of cash from clients or the payment of cash to suppliers, we define two relevant periods expressed in days, the operating cycle and the net operating cycle, what is the main difference between both cycles? a) The

What are the main differences between debt and equity financing used by corporations?

When comparing debt financing to equity financing used by corporations, there are some key differences. Which of the following sentences represents differential characteristics of debt financing? a) Legal repayment option, discretionary payments, and finite term commitments. b) Residual asset claim, tax-deductible expenses, and finite term commitments. c) Tax-deductible expenses, legal repayment option, and finite term

What is the difference between contract and agency relationships in corporate finance?

When analyzing the relationships between the different stakeholders in corporations, such as governments, customers, shareholders, bondholders, suppliers, managers, board of directors, and employees, we can find different types of relations, such as contractual or agency (principal-agent) relationships. Which of the following can be considered as an agency relationship? a) Managers vs. employees. b) Shareholders vs.