Finance Exam 1

Goal of the firm

Sole proprietorship

General partnership

Limited partnership

Corporation

an entity that legally functions separate and apart from its owners

S-corporation

a security offering where all investors have the opportunity to acquire a portion of the financial claims being sold

a security offering limited to a small number of potential investors

Primary market

Secondary market

the sale of additional stock by a company whose shares are already publicly traded

markets where you can buy or sell something at a future date

Exchange

formal organizations that facilitate the trading of securities

NASDAQ

a financial specialist who underwrites and distributes new securities and advises corporate clients about raising new funds

Syndicate

a group of investment bankers who contractually assist in the buying and selling of a new security issue

several underwriting groups bid for the right to purchase the new issue from the corporation that is raising funds

the process of marketing a new security issue to a select group of investors

Sarbanes-Oxley Act

Opportunity cost of funds

the additional return required by investors for securities that cannot be quickly converted into cash at a reasonably predictable price

the interest rate paid on debt securities without an adjustment for any loss in purchasing power

Term structure of interest rates

the rate of return a bondholder will receive if the bond is held to maturity

Income statement

Balance sheet

Current assets

Fixed assets

Debt

Equity

Retained earnings

Liquidity

Gross profit

Taxable income

Depreciation

Capital gain

gains from selling any asset that is not part of the ordinary operations