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1) The existence of specific regulations and controls on dollar deposits in the United
States, including interest rate ceiling imposed by the government, has contributed to the
growth of the Euromarket.
2) Restrictive covenants are contractual clauses in long-term debt agreements that place
certain operating and financial constraints on the borrower.
3) Even if assets are not negatively correlated, lower the positive correlation between
them, the lower the resulting risk.
4) The effective annual rate increases with increasing compounding frequency.
5) According to Modigliani and Miller, a firm's value is determined solely by the
earning power and risk of its assets and that the manner in which it splits its earnings
stream between dividends and internally retained funds does not affect this value.
6) A firm's operating cycle (OC) is simply the sum of the average age of inventory
(AAI) and the average payment period (APP).
7) Regularly paying a fixed or increasing dividend eliminates uncertainty about the
frequency and magnitude of dividends.
