FM-Finals-31-60

Not a method of equity restructuring is:

• Issuing bonds

• Merging companies

• Selling assets

• Modifying stock options

The acquisition of a company using borrowed funds is known as:

• A leveraged buyout (LBO)

• A stock buyback

• A debt-to-equity swap

• A capital increase

The typical outcome of a debt-to-equity swap is:

• Higher debt obligations

• Lower debt burden

• Increased equity

• Increased leverage

Refers to the combination of two companies to form a single entity:

• A merger

• A leveraged buyout

• A stock split

• A debt restructuring

Random sampling to estimate potential outcomes is used in:

• Monte Carlo simulation

• Linear regression

• Time-series forecasting

• Trend analysis

Monte Carlo simulations are used to:

• Evaluate multiple outcomes

• Predict the exact future outcomes

• Analyze historical data

• Forecast stock prices

Maximizing returns for a given level of risk or minimizing risk for a given return is:

• Portfolio optimization

• Reducing portfolio diversification

• Selling high-risk assets

• Increasing the number of assets in the portfolio

A financial statement based on future projections is known as:

• A pro forma statement

• A balance sheet

• A statement of cash flows

• An income statement

Altering a company’s debt and equity mix is known as:

• Recapitalization

• Merging companies

• Selling assets

• Modifying stock buybacks

Changes to the capital structure are referred to as:

• Recapitalization

• A debt restructuring

• A leveraged buyout

• A stock split