Introduction to Finance

See
Cost of new common stock)
defined, 15, 182, 266
elements, 267
t
par value, assignation, 267
Community Reinvestment Act of 1977 
(CRA), 94
Companies
growth/profitability, impact, 496–497
success, habits, 384
Company-specific risk, 365
Compensating balance, defined, 501
Competition, nonprice forms, 288–289
Competitive bidding, 307–308
advantages/disadvantages, 307–308
Composite balance sheet. 
See
Commercial 
bank
Compound inflation rate, 225
Compounding
concept, expression, 221–222
defined, 219, 221
inflation/purchasing power, implications, 
225
intervals, frequency (increase), 241–242
semiannual compounding, usage, 
241–242
usage, 221–225
Compound interest, defined, 221
Compute (CPT) function, usage, 275
Conditions, defined, 479
Conflicts of interest, elimination, 408
Congress, members (illegal activities), 172
Constant dividend growth model, 572
defined, 286
usage, 286–287
Constant dividends, usage, 286
Constant payout ratio, defined, 272
Consumer Advisory Council, 84
Consumer credit, cost, 241–242
Consumer credit, usage, 195
Consumer Credit Protection Act, defined, 94
Cash outflows
estimation, 464
example (
See
Monthly cash outflows)
Central bank, 98
defined, 77
Central banking, movement, 80
Certificates of deposit (CDs), defined, 66
CFO. 
See
Chief financial officer
Change in Bank Control Act of 1978, 94
Character, defined, 479
Charter, defined, 388
Chartered banks, 55, 57, 61
Chartists (technicians), defined, 357
Checkable deposits
change, calculation, 118, 119
expansion, 115–119
term, usage, 115
Checkable deposits, involvement, 39, 40
Check clearance, 95–97
Check collection, 95–96
Check routing, 97–98, 97
f
symbols, usage, 97
f
Checks, processing/clearing, 54
f
Chicago Board Options Exchange (CBOE), 
trading, 336
Chicago Mercantile Exchange (CME), quote, 
example, 336
Chick-fil-A
capital project, 525
mission, 383
Chief financial officer (CFO), defined, 
409
China, economy of, 7
Chrysler, DaimlerBenz (merger), 361
Civil War
inflation, 208
state banks, 56
U.S. banking system, 55–56
Clean draft, defined, 146
Clearing float, 477
Clinton, Bill, 106
Clinton, Bill (impeachment), 172
Closed-end funds, 358
Closed-end mortgage bond, defined, 262
Coefficient of variation (CV), 348
defined, 348
Coin (physical money), 28–33
payments mechanism, 95–97
U.S. coins, 28–29
Cold IPO markets, 310
Collateral, defined, 479
Collection
components, reduction methods, 478
t
efforts, 481–482
Co-maker loans, 514
Combined leverage, defined, 586
Commerce finance companies, loans 
(provision), 51
Commercial bank
composite balance sheet, 63
f
defined, 48
demand deposits, checking accounts, 36
difficulties, 60
function, 49
f,
51–52, 52
f
lending, 499–501
small business credit provision, 81
Capital gains, 418
Capital gains taxes, 418
Capital markets
defined, 15
securities, 15, 181–182
defined, 181
types, 182
f
Capital structure, 581
decision making, difficulty, 578–579
defined, 566
operating/financial leverage effects, 
combination, 584–588
options, 567
t
proposal, example, 582
t
question, 410
scenario analysis, usage, 583
t
selection, reasons, 566–569
theory/practice, impact, 588–593
weights, 574
CAPM. 
See
Capital asset pricing model
Carter, Jimmy, 57
Cash
balance, minimum, 463
components, 395
financial manager perspective, 389
holdings, 469
management, 476–478
revenues, flow, 199
Cash budget, 463–468
construction, 465–466
defined, 463
example (
See
Monthly cash budget)
level production (
See
Monthly cash budget)
Cash budgeting, usefulness, 466
Cash conversion cycle, 457–458
calculation, 459
defined, 458
increase, 458
length, determination, 458–459
Cash dividends, corporation payment, 393
Cash due, depository institutions, 63–64
Cash flows
adjustments, 397
data, example, 528
t
discount rate, 285
estimation, 540–546
application, 556–563
approaches, 542–546
nonfinancial information, relevance, 525
example, 558
t,
561
t,
562
t
hedging, 159–160
isolation, 540–542
level production (
See
Net monthly cash 
flows.)
patterns, differences, 538
project statement, differences, 543
t
statement, 396–398
streams, 262–263
Cash flows from investment activities, 544
Cash flows from operations, 542–544
calculation, 543–544, 545
Cash inflows
estimation, 464
example (
See
Monthly cash inflows.)
Cash management, 468–470, 484
analyst, career, 16

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622
INDEX
Current assets
components, 492
composition, change, 467
f
defined, 395
fixed assets, mixture, 495–496
management, 468–476