Questions from Corporate Finance

Q: Suppose that you are offered the opportunity to accept a risk involving

Suppose that you are offered the opportunity to accept a risk involving the toss of a fair coin, in which you will win $450 if heads comes up and lose $450 if tails comes up. a. Would you accept this...

Q: In 2004, 55 percent of firms provided guidance to analysts,

In 2004, 55 percent of firms provided guidance to analysts, down from 72 percent in the prior year.30 Before Google’s IPO, the firm’s executives announced that they did not plan to issue earnings guid...

Q: Discuss whether any of the three IPO phenomena apply in regard to

Discuss whether any of the three IPO phenomena apply in regard to the Palm IPO described in the Behavioral Pitfalls box.

Q: Use the ideas developed in this chapter to assess whether Palm and

Use the ideas developed in this chapter to assess whether Palm and 3Com were efficiently priced on Palm’s first day of trading.

Q: Analyze the assessment of Palm made by analyst Paul Sagawa.

Analyze the assessment of Palm made by analyst Paul Sagawa.

Q: During a presentation in February 2001, the CFO of Palm Inc

During a presentation in February 2001, the CFO of Palm Inc. was asked how frequently her firm assesses and uses its cost of capital. In response, she stated that Palm computes its cost of capital “fr...

Q: In 1999, the S&P 500 returned 21 percent,

In 1999, the S&P 500 returned 21 percent, closing out a streak of five consecutive stellar up-years. Then in 2000, the S&P 500 returned −9.1 percent. In 2001, the S&P 500 returned −16.1 percent. At th...

Q: One behavioral school of thought holds that in complex situations where it

One behavioral school of thought holds that in complex situations where it is difficult to estimate probabilities, simple heuristics are generally better than complicated heuristics. Discuss this pers...

Q: Chapter 3 contains a discussion about how the Morgan Stanley analyst team

Chapter 3 contains a discussion about how the Morgan Stanley analyst team computed a discount rate to use in its free cash flow valuation of eBay stock. Discuss any similarities between the procedure...

Q: The Duke/CFO study on financial executives’ forecasts for the 10

The Duke/CFO study on financial executives’ forecasts for the 10-year horizon features a negative correlation between forecasts of return and forecasts of volatility. Discuss this property in light of...