A Type of Sensitivity Analysis (Called What If in Microsoft

question 95

True/False

A type of sensitivity analysis (called what if in Microsoft Excel) involves having the spreadsheet compute the amount a constant value would need to be in order for the result of a particular formula to become a specified amount. _________________________

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Definitions:

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's shares, usually at the discretion of the bondholder.

Diluted Earnings

Earnings per share (EPS) calculated using the maximum potential number of shares that could be outstanding if all sources of conversion, such as convertible bonds or employee stock options, are exercised.

Marginal Income Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, essentially the rate at which the last dollar of your income is taxed.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to some numbers than others.