FIN 470 Final Exam Study Guide
Solutions
Investment Bankers - Ans:-Specialize in helping companies raise capital by selling securities
Land, machines, and knowledge - Ans:-Are real assets
Secondary - Ans:-Investors trade previously issued securities in the ________ market(s)
Agency Problem - A...
The product has reached full potential, profit margins are narrower, and producers are forced to
compete on price to a greater extent - Ans:✔✔-In the maturity stage of the industry life cycle,
It is difficult to predict which firms will succeed and which firms will fail, and industry growth is very
rapid - Ans:✔✔-In the start-up stage of the industry life cycle,
Fundamental Analysis - Ans:✔✔-The process of estimating the dividends and earnings that can be
expected from the firm based on determinants of value is called
The automobile industry - Ans:✔✔-An example of a highly cyclical industry is
Threat of entry and rivalry between existing competitors. - Ans:✔✔-A variety of factors relating to
industry structure affect the performance of the firm, including
expanding; ample - Ans:✔✔-A rapidly growing GDP indicates a(n) ______ economy with ______
opportunity for a firm to increase sales
stagnant or shrinking; little - Ans:✔✔-A declining GDP indicates a(n) ______ economy with ______
opportunity for a firm to increase sales
Smaller decreases in profits than firms with high operating leverage - Ans:✔✔-If the economy is
shrinking, firms with low operating leverage will experience
Consolidation stage - Ans:✔✔-The life cycle stage in which industry leaders are likely to emerge is the
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