Deneme Sınavı Soruları

Proportion of debt financing in the capital structure 

Proportion of equity financing in the capital structure 

Cost of debt financing 

Cost of equity financing 

Dividend payout ratio

Strategies for company’s whole portfolio of resources, and strategies for business unit’s products as well

The outlay of funds by the firm that is expected to produce benefits over a period of time longer than one year

A cash outlay that has already been incurred and that cannot be recovered regardless of whether the project is accepted or rejected

The return on the best alternative use of an asset; the highest return that will not be earned if funds are invested in a particular project

The process of evaluating and selecting long-term investments which are consistent with the firm's main objective of maximizing shareholders' wealth

Government bonds

Callable bonds

Convertable bonds 

Premium bonds

Securitized bonds 

Economic analysis

Strategic analysis 

Capital expenditure

Capital structure

Capital budgeting 

I, II and III

III, IV and V

I, II, III and IV

I, II, IV and V

II, III, IV and V

Return of invested capital

Weighted average cost of capital

Total liabilites and equity

Working capital

Degree of operating leverage

Securitization.

Borrowing from special institutions.

Debt issuance and equity finance.

Trading of auto-issued bonds.

Bank borrowing.

15.80%

16.40%

18.50%

20.60%

22.70%

The project that provides the highest IRR 

The project that provides the lowest IRR 

The project that provides IRR greater than the expected rate of return

The project that provides IRR smaller than the expected rate of return 

The project that provides IRR equal to the maximum rate of return

I and II

III and IV

I, II and IV

II, III and IV

I, II, III and IV

I and II

I and III

II, III and IV

I, II, IV and V

I, II, III, IV and V

Theory that the firm's capital structure is determined by a trade-off of the value of tax shields against the costs of bankruptcy

Capital markets are perfect with rational investors that can freely buy and sell assets.

Investors and companies can borrow at the same rate with no restrictions.

There are no transaction costs in financial asset trading.

All investors can access the same information as the managers of a company without paying any information cost.

Net Income Approach

Net Operating Income Approach

Traditional Approach

Profit Approach

Net Cost Approach

The weight of debt

The before-tax cost of debt

The after-tax cost of debt

The cost of equity

The weighted average cost of capital

greater, greater, positive 

smaller, smaller, negative 

greater, smaller, positive

smaller, greater, positive

smaller, greater, negative

The traditional approach to capital structure suggests that there exist an optimal debt to cash ratio where the overall cost of capital is the minimum and market value of the firm is the maximum. 

Accounting for financial transactions can be classified into two types of approaches. One is the Traditional Approach and another one is the modern approach.  

Traditional management systems focus on goals and objectives that the senior management of the company establishes.

An optimal capital structure is the best mix of debt, preferred stock and common stock that maximizes a company's stock price by minimizing its cost of capital.

A traditional approach is an intermediate model, compromising between the net income approach and the net operating income approach. Traditional approach assumes an optimal capital structure where the weighted average cost of capital (WACC) is minimized and the value of the firm is maximized.

I and II

III and IV

I, IV and V

I, II, IV and V

I, II, III, IV and V

Equity financing provides a tax shield. 

Cost of debt financing increases with bankcuptcy risk. 

Cost of capital depends on the capital structure as well as cost of debt financing and cost of equity financing. 

Value of the debt of a company depends on the cost of debt financing. 

The smaller the tax rate, the smaller the after-tax cost of debt financing. 

Fixed assets

Total assets

Capital structure

Bankruptcy

The value of the firm

Investors have homogenous expectations

There are no bankruptcy costs

There are no taxes

There are no transaction costs in financial asset trading

Investors and companies cannot borrow at the same rate without any restrictions