FINANCIAL MANAGEMENT FINALS

What financial statement shows a company's revenue and expenses over a period of time?

• Income statement

• Balance sheet

• Cash flow statement

• Statement of retained earnings

What is the difference between a public offering and a private placement?

• A public offering is open to the general public, while a private placement is only open to institutional investors

• A public offering is typically used to raise capital for a company's operations or growth initiatives, while a private placement is typically used to provide liquidity to existing shareholders

• A public offering is more expensive and time-consuming than a private placement

• A public offering involves the sale of ownership shares in a company, while a private placement involves the issuance of debt instruments

What is the purpose of a stock buyback?

• To raise capital to fund a company's operations or growth initiatives

• To reduce the number of outstanding shares of a company's stock

• To provide shareholders with a dividend payment

• To lower a company's cost of capital

What is a stock split?

• A decision by a company to issue additional shares of stock to its existing shareholders

• A decision by a company to buy back its own shares of stock from investors

• A decision by a company to merge with another company

• A decision by a company to split its operations into separate business units

What is the difference between common stock and preferred stock?

• Common stock typically pays a higher dividend than preferred stock

• Common stock typically has more voting rights than preferred stock

• Common stock is less risky than preferred stock

• Common stock is more liquid than preferred stock

What is a stock dividend?

• A payment made by a company to its shareholders in the form of additional shares of stock

• A payment made by a company to its shareholders in the form of cash

• A payment made by a company to its bondholders in the form of additional shares of stock

• A payment made by a company to its bondholders in the form of cash

What is the purpose of a convertible bond?

• To provide a fixed income stream to investors

• To allow investors to convert their bond into equity shares in the issuing company

• To provide a higher return than traditional bonds

• To provide a lower return than traditional bonds

What is the difference between a secured bond and an unsecured bond?

• A secured bond is backed by collateral, while an unsecured bond is not

• A secured bond has a lower interest rate than an unsecured bond

• A secured bond is less risky than an unsecured bond

• A secured bond is more liquid than an unsecured bond

What is a bond?

• A type of equity financing instrument

• A type of short-term loan

• A type of long-term loan

• A type of financial derivative

What is the purpose of issuing stock?

• To raise capital to fund a company's operations or growth initiatives

• To pay off existing debt

• To lower a company's cost of capital

• To provide shareholders with a dividend payment