Questions from Corporate Finance

Q: Allied Products, Inc., is considering a new product launch.

Allied Products, Inc., is considering a new product launch. The firm expects to have an annual operating cash flow of $10.5 million for the next 10 years. Allied Products uses a discount rate of 13 pe...

Q: You’ve just found a 10 percent coupon bond on the market that

You’ve just found a 10 percent coupon bond on the market that sells for par value. What is the maturity on this bond?

Q: Briley, Inc., is expected to pay equal dividends at the

Briley, Inc., is expected to pay equal dividends at the end of each of the next two years. Thereafter, the dividend will grow at a constant annual rate of 4 percent, forever. The current stock price i...

Q: Ritter Corporation’s accountants prepared the following financial statements for year-end

Ritter Corporation’s accountants prepared the following financial statements for year-end 2012: a. Explain the change in cash during 2012. b. Determine the change in net working capi...

Q: You are planning to save for retirement over the next 30 years

You are planning to save for retirement over the next 30 years. To do this, you will invest $800 a month in a stock account and $350 a month in a bond account. The return of the stock account is expec...

Q: Suppose an investment offers to quadruple your money in 12 months (

Suppose an investment offers to quadruple your money in 12 months (don’t believe it). What rate of return per quarter are you being offered?

Q: The Utah Mining Corporation is set to open a gold mine near

The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, “This is a golden opportunity.” The mine will cost $2,400,000 to open and will hav...

Q: You have been hired as a consultant for Pristine Urban-Tech

You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago...

Q: Applied Nanotech is thinking about introducing a new surface cleaning machine.

Applied Nanotech is thinking about introducing a new surface cleaning machine. The marketing department has come up with the estimate that Applied Nanotech can sell 15 units per year at $305,000 net c...

Q: Tesla Corporation needs to raise funds to finance a plant expansion,

Tesla Corporation needs to raise funds to finance a plant expansion, and it has decided to issue 25-year zero coupon bonds to raise the money. The required return on the bonds will be 7 percent. a. W...