_____________ is the difference between the market value of the firm (i.e., the sum of the market value of common equity, the market value of debt, and the market value of preferred stock) and the book value of the firms common equity, debt, and preferred stock. ______________ represents the residual income that remains after the cost of all capital, including equity capital, has been deducted.

_______________ is the profit from the sale of a capital asset for more (less) than its purchase price. ____________ can be carried backward for 2 years or forward for 20 years to offset taxable income in a given year.

__________________ is the amount of interest bearing debt, preferred stock, and common equity used to acquire the companys net operating assets. Without this capital a firm cannot exist, as there is no source of funds with which to finance operations.

_______________ is the amount of net income a company would generate if it had no debt and held no financial assets. So it is a better measure of the performance of a companys operations because debt lowers income.

19. _____________ and ________ ___ are two important types of derivatives, and their values depend on the prices of other assets.

20. The four most fundamental factors affecting the cost of money are ___________________, _______________ for consumption, _____________, and _______________.

21. Corporations that own less than 20% of the stock of the dividend paying company can exclude 70% of the dividends received; firm that own more than ____________% but less than ___________% can exclude _________% of the dividends; and firms that own more than _____________% can exclude the entire dividend payment.