The concept of present value relates to the idea that
The money you have now is worth more today than an identical amount you would receive in the future
The formula for calculating future value (FV) is
FV = PV x (1+r)^n
What is an annuity?
A series of equal payments at equal time periods and guaranteed for a fixed number of years
What is a DRHP?
A Draft Red Herring Prospectus, or offer document, is when a company that is planning to raise money from the public provides detailed information about its business operations and financials
What is a par value of a bond?
The amount borrowed by the issuer of the bond and returned to the investors when the bond matures
When the price of a bond is above the face value, the bond is said to be
Trading at a premium
Which of the following is true when a bond is trading at a discount?
Coupon Rate < Current Yield < Yield to Maturity
The concept of time value of money is that
The cash flows that occur earlier are more valuable than cash flows that occur later
What is the enterprise value of a business?
The entire value of the business without giving consideration to its capital structure
Which of the following is the formula to calculate cost of capital?
Net debt/Total assets x Cost of debt + Equity/Total assets x Cost of equity
What is working capital?
Current Assets - Current Liabilities