Flashcards in Debt Financing WOB Test 3 Deck (16):
Planning for a firms money needs
What is the goal of a Financial Manager?
Maximize value of firm to its owners
What is another term that means - Maximize value of firm to its owners
Maximize shareholder value
What are the 3 fundamental concepts of financial management?
- balancing short term and long term demands
- balancing potential risks and rewards
- balancing leverage and flexibility
Arrange funding of borrowed money
Arrange funding by selling other shares
Short term Financing
Covers current expenses repaid within a year
Long term Financing
Covers long term expenses repaid over a period more than a year
Increasing rate of return by financing with borrowed funds
Firms mix of debt and equity financing
What are the 5 Cs of credit scores?
Form of debt that has interest
Coupon interest rate
Percentage of par value paid out annually
Amount returned to bond owner at time of maturity
Length of time until bond issuer returns value to bond holder