Financial Management

2. The nominal cash flows should be discounted by ---------------------discount rate.
3. The cost related to monitoring by the board of directors can be termed as ---------------cost.
8. ------------------------------------ in information is the basis of the pecking order theory of financing.
9. --------------- to risk is the basis of higher the risk, higher the expected return.
11. Dividends tend to follow the -------------------------------------.
12. The present value of --------------------- can be calculated as a product of the probability of default times x percentage of unlevered value.
15. The selfish strategy followed by managers or shareholders at the time of financial distress related to investment which causes an expropriation of debtholders is called -------------------------.
19. Share-repurchase is timed when the firm is usually ------------------------------.
20. An example of direct costs of bankruptcy is -----------------------costs related to bankruptcy.

1. The unique risk to the firm is called the --------------------------risk.
4. The dividend discount model for growing perpetuity case is called a ------------------- growth model.
5. Share-repurchase helps -----------------the dilution of ownership.
6. The ------------------- order theory of financing suggests that firms should have financial slack.
7. The risk which cannot be diversified away is called the --------------------------risk.
10. -----------------------annual-cost is calculated to determine the investment in replaceable machines.
13. The required return to bondholders if they plan to hold the bond till the maturity of the bond is called --------------- of the bond.
14. Beta for firms in the cyclical industry is --------------------than that of firms in the utility industry, keeping other things fixed.
16. The cost of ------------------- is used as the discount rate in the dividend discount model.
17. The ------------------ trade-off model of financing suggests an optimal capital structure when the marginal benefit of debt is equal to the marginal benefit of equity.
18. A ------------------is a contract that enables to secure the use of the tangible property for a specified period by making payments to the owner