Busıness Fınance I

Yanıt Açıklaması: Yield curve plots the relationship between bond yields and maturity. Therefore, the correct option is D.

Yanıt Açıklaması: The basic aims to preparethe cash budgets are: To make available the required amount of cash for the realization of planned activities, To determine the cash shortfall and/or excess, To coordinate the cash management for working capital, sales, liabilities and procurements, To define the funding sources when necessary, To plan an effective collection policy, To stipulate the availability of cash for investments, To define the minimum acceptable cash amount, To enable the control of cash inflows and outflows.

Yanıt Açıklaması: Capital-Asset-Pricing Model is a model describing the relationship between the systematic risk of a security, namely beta, and expected returns. As long as the market risk premium is positive, higher beta value bring higher returns.

Yanıt Açıklaması: Turkish Commercial Code has accepted two capital systems for all Joint Stock Companies: (1) basic capital and (2) registered capital.

Yanıt Açıklaması: A, B, C and E are false, whereas D is correct: If semistrong form efficiency holds, it should not be possible for investors using publicly available information to obtain consistent excess profits.

Yanıt Açıklaması: Aggressive policy, as the name suggests, is specified as the most risky working capital financing policy as a higher proportion of current assets including permanent ones is financed by the short-term debt. To apply such a policy, the company should ensure that the receivables are supposed to be collected on time and payments to the creditors are easily made as late as possible.

Yanıt Açıklaması: The working capital policy of a company should focus on maintaining sufficient liquidity. It is a fact that in ideal cases, companies determine their optimal working capital level and also their funding strategy in order to create value. In this regard, the decision makers should decide about not only the amount of current assets but also the proportions of short-term and long-term sources for financing these current assets.

Yanıt Açıklaması: A bond is a debt security that contractually obligates the issuer to make fixed coupon payments at fixed intervals for a fixed amount of time plus it also pays out the face value of the bond at maturity together with the last coupon payment. The total annual coupon payments are equal to the coupon rate multiplied by the face value of the bond. The coupon payments may be split into more than one payment per year.

Yanıt Açıklaması: BIST 100 is expected to yield more based on the historical data for the Turkey Economy over the period of 2006-2017

Yanıt Açıklaması: The coupon rate of a bond determines the coupon (interest) payments. Coupon payments are the periodic payments received by bondholders until the bond matures. The annual coupon payment is equal to the coupon rate times the par value of the bond.

Yanıt Açıklaması: When deciding on an investment, we should take into account not only their expected returns and risk levels, but also possible interactions/ co-movements with other securities.

Yanıt Açıklaması: The higher the default risk, the higher is the yield on the bonds. The difference between the promised yield on the corporate bond and the yield on government bond with the same coupon rate and maturity is called default premium. The higher the probability of being defaulted, the higher default premium will be.

Yanıt Açıklaması: Scenario Analysis:The flexibility of financial planning by the use of the capabilities of information technology enables to realize scenario analysis to evaluate the effects of the possible financial and environmental changes on corporate activities in the future.

Yanıt Açıklaması: Option D is about assumptions of financial planning.

Yanıt Açıklaması: The primary objective of management of receivables should not be limited to expansion of sales but should involve maximization of overall returns on investment. So, receivables management should not be the only focus on the collection within the shortest possible period but also other possible related benefit and costs should be considered. Companies should establish clear principles with regards to trade credits which includes the following aspects (Mishra, 1973): 1. Allocation of Authority: The efficiency of a credit management in formulation and execution of sound and effective credit and collection policies largely depends on the location of credit department in the organizational structure. As credit and collection policies directly influence the solvency of the firm, they are considered to be under the responsibility of the chief finance officer. The other approach, referring to the receivables as a representation of sales and the value is not created until the collection is realized, proposes placing the authority of allocation under the direct charge of the marketing executive or the sales department. The choice of allocation of authority to administer credit and collection policies depends on either to a financial executive or the marketing executive or both of them jointly depending upon the organizational structure and the objectives of the company.

Yanıt Açıklaması: Corporate bonds are long term credit source, thus cant be considered as financing source of working capital.

Yanıt Açıklaması: Danger level is the level below the minimum level. It leads to stoppage of the production process. It is calculated as the formula below: Danger Level = (Average Consumption)x(Maximum reorder period for emergency purchase)

Yanıt Açıklaması: Working capital is also defined as the available capital for day-to-day production of goods to be sold by a company represented by its net current assets

Yanıt Açıklaması: Yield-to-maturity is the average rate of return that will be earned on a bond if it is bought at the market price and held until it matures. It is the discount rate that makes the present value of its future cash flows equal to its market price. It is like an internal rate of return of a bond. Therefore, the correct option is C.

Yanıt Açıklaması: Divisional proforma and realized budgets and divisional financial reports are required for the financial planning process. Cash flow estimations and funding requirements are amongst the outputs of the financial planning process.