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WKU - FIN 330 - Study Guide

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WKU - FIN 330 - Study Guide

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background image Finance 330 Exam #1 Preparation Study Guide for Exam #1 CPA #1  What is a financial analyst? o Financial Analysts  work closely with accounting departments but they  focus more on the cash flow of the business. They often decide 
whether to undertake a new product line, acquisition, or divestment.
What is a loan officer? o A  loan officer  works in banks or other lenders and is responsible for  analyzing financial statuses as well as advising people about borrowing
money.
What are the distinctions between a corporation’s shareholders, directors, 
and officers?
o Shareholders are the “owners” of the corporation They risk investing money in the company with the hope to gain 
a profit
o Directors manage the corporation
o Officers run the corporation
Corporations  are responsible for 80% of revenue in businesses What is the difference between an “S” and a “C” corporation? o “S” corporations are pass-through entities because the business  owners are required to file and pay the taxes on personal returns o “C” corporations file a corporate tax return and pay taxes at corporate  tax rates Shareholders pay taxes upon dividend distributions when they 
sell their shares
No more than  100  shareholders in an “S” corporation **Refer to and know tax bracket information o 0-50k  15% Tax rate o 50-75k 25% o 75-100k 34% o 100-335k 39% o 335-10M 34% o 10-15M 35% o 15-18.33M 38% o 18.33M- 35% **The KY “C” corporation tax bracket for state income taxes are: o Net income up to 50k= 4% tax rate
o Net income from 50k-100k= 5% tax rate
o Net income from 100k+ = 6% tax rate
Corporations incorporate in Delaware for the following reasons: o Cheaper startup cost
o Better sense of privacy
o More flexible laws
o Low corporate income tax rates
background image o Greater legal certainty The primary goal of  financial management  is to maximize and increase  shareholder value Stakeholders include the following: o Suppliers
o Customers
o Owners
o Employees
o Anyone else directly involved in the financial aspects of a business
CPA #2 Individuals are net suppliers for a company because they save more than 
they spend and the money the save is used by the banks for investments for 
businesses and governments
o If individuals consume more than they are saving, there will be less  money to be used for investments and this would drive up the required
return. This would cause overtime, employment, salaries, and GDP to 
decline.
Money markets are short-term markets o Firms use the funds from short-term markets for less than one year. Capital markets are typically used for fixed assets o Used over several years Transactions in short-term debt instruments or marketing securities take 
place in the money market.
Investment banking institutions are able to use the expertise developed 
through acquisition.
Financial institutions, such as investment banks, provide expertise in the 
acquisition funds
CPA #3 Financial Crisis  o Mortgages are typically issued by commercial banks to secure the  loans made o A subprime mortgage is a type of loan granted to those with credit  scores less than 600, which was done. o The investment banks grouped mortgages together into mortgage- backed securities, which were made by investment banks The securities were then sold to investors. o Rating agencies were being paid by the investment companies Capital Gains and Losses o Can be long-term or short-term If it’s more than one year, it’s a long-term gain/loss If it’s less than one year, it’s a short-term gain/loss o If you sell investments that were held for less than a year, you’ll pay  regular income tac rates on your gains CPA #4

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School: Western Kentucky University
Department: Finance
Course: Print of Finance Management
Professor: Rhoades
Term: Fall 2016
Tags:
Name: Exam #1 Review
Description: This is everything (with the exceptions of the formulas he gives us) that should be added to the cheat sheets! It is information from the CPA notes, the CPA's themselves, AND the book!
Uploaded: 09/19/2016
6 Pages 42 Views 33 Unlocks
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