Matching
Match the following terms with the descriptions below.
Premises:
A financing strategy that uses debt to increase the rate of return on owners' investment.
A measure of a firm's ability to service its debt.
The total number of shares the state will allow a corporation to sell.
The portion of stockholders' equity required by the state to be retained for the protection of the corporation's creditors.
An arbitrary value assigned to shares of capital stock that is approved by the state in which the business is incorporated.
The chance that a company will fail because it defaults on its debt.
A means of raising cash or other assets in exchange for an ownership interest in a company.
The number of shares sold to stockholders.
A right of common stockholders that allows them to maintain their percentage ownership interest in the corporation when new shares of stock are issued.
When a firm obtains funds (cash) in exchange for a liability to repay the borrowed funds.
A measure of the performance of the owners' investment.
The number of shares held outside the corporation.
Responses:
Financial risk
Equity financing
Legal capital
Par Value
Authorized shares
Outstanding shares
Issued shares
Preemptive right
Return on owners' equity ratio
Debt financing
Financial leverage
Times interest earned ratio
Correct Answer:
Premises:
Responses:
A financing strategy that uses debt to increase the rate of return on owners' investment.
A measure of a firm's ability to service its debt.
The total number of shares the state will allow a corporation to sell.
The portion of stockholders' equity required by the state to be retained for the protection of the corporation's creditors.
An arbitrary value assigned to shares of capital stock that is approved by the state in which the business is incorporated.
The chance that a company will fail because it defaults on its debt.
A means of raising cash or other assets in exchange for an ownership interest in a company.
The number of shares sold to stockholders.
A right of common stockholders that allows them to maintain their percentage ownership interest in the corporation when new shares of stock are issued.
When a firm obtains funds (cash) in exchange for a liability to repay the borrowed funds.
A measure of the performance of the owners' investment.
The number of shares held outside the corporation.
Premises:
A financing strategy that uses debt to increase the rate of return on owners' investment.
A measure of a firm's ability to service its debt.
The total number of shares the state will allow a corporation to sell.
The portion of stockholders' equity required by the state to be retained for the protection of the corporation's creditors.
An arbitrary value assigned to shares of capital stock that is approved by the state in which the business is incorporated.
The chance that a company will fail because it defaults on its debt.
A means of raising cash or other assets in exchange for an ownership interest in a company.
The number of shares sold to stockholders.
A right of common stockholders that allows them to maintain their percentage ownership interest in the corporation when new shares of stock are issued.
When a firm obtains funds (cash) in exchange for a liability to repay the borrowed funds.
A measure of the performance of the owners' investment.
The number of shares held outside the corporation.
Responses:
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