Questions from Corporate Finance

Q: Watters Umbrella Corp. issued 15-year bonds 2 years ago

Watters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 6.4 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM...

Q: For the company in the previous problem, what is the dividend

For the company in the previous problem, what is the dividend yield? What is the expected capital gains yield?

Q: Purple Feet Wine, Inc., receives an average of $16

Purple Feet Wine, Inc., receives an average of $16,000 in checks per day. The delay in clearing is typically three days. The current interest rate is .018 percent per day. a. What is the company’s flo...

Q: The Trektronics store begins each week with 750 phasers in stock.

The Trektronics store begins each week with 750 phasers in stock. This stock is depleted each week and reordered. If the carrying cost per phaser is $65 per year and the fixed order cost is $395, what...

Q: When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every Sunday as long as he lived. The week after she died in 1962, a bunch of fresh flowers that the former...

Q: An insurance company is offering a new policy to its customers.

An insurance company is offering a new policy to its customers. Typically the policy is bought by a parent or grandparent for a child at the child’s birth. The details of the policy are as follows: Th...

Q: Kyoto Joe, Inc., sells earnings forecasts for Japanese securities.

Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 2/15, net 30. Based on experience, 65 percent of all customers will take the discount. a. What is the average co...

Q: Explain why diversification per se is probably not a good reason for

Explain why diversification per se is probably not a good reason for merger.

Q: Assume that the following balance sheets are stated at book value.

Assume that the following balance sheets are stated at book value. The fair market value of James’ fixed assets is equal to the book value. Jurion pays $15,000 for James and raises t...

Q: Paul Adams owns a health club in downtown Los Angeles. He

Paul Adams owns a health club in downtown Los Angeles. He charges his customers an annual fee of $500 and has an existing customer base of 600. Paul plans to raise the annual fee by 6 percent every ye...