Questions from Corporate Finance

Q: In May 2002, Hewlett-Packard acquired Compaq Computer in a

In May 2002, Hewlett-Packard acquired Compaq Computer in a takeover that featured considerable drama. In deliberating the acquisition, HP director Walter Hewlett, son of founder William Hewlett, sugge...

Q: In 2001 the chief executive of AOL Time Warner, Gerald Levin

In 2001 the chief executive of AOL Time Warner, Gerald Levin, sought to acquire AT&T’s cable business, the only cable business larger than the one already owned by AOL Time Warner. In doing so, he did...

Q: What are the main psychological challenges that Ford CEO Alan Mulally faced

What are the main psychological challenges that Ford CEO Alan Mulally faced in respect to Ford’s regular Thursday managers’ meetings, and how do these relate to issues of process and culture at the fi...

Q: In respect to the experiences of financial firms in the lead-

In respect to the experiences of financial firms in the lead-up to the global financial crisis, for each firm identify the most important psychological phenomena that destroyed value, and wherever pos...

Q: Consider the assumptions in Exhibit 3-2 that underlie the valuations

Consider the assumptions in Exhibit 3-2 that underlie the valuations associated with P/E, PEG, and price-to-sales. Analyze the degree to which these assumptions are mutually consistent, and correspond...

Q: The financial instability hypothesis holds that firms take on excessive debt during

The financial instability hypothesis holds that firms take on excessive debt during periods of euphoria. Discuss the behavioral basis for this perspective, drawing if necessary from discussions in pre...

Q: Problem 7 in Chapter 9 pertains to Volkswagen’s having installed “defeat

Problem 7 in Chapter 9 pertains to Volkswagen’s having installed “defeat devices.” In describing the issue, media reports pointed to Volkswagen’s corporate culture, which according to the New York Sta...

Q: Discuss whether the comments of John McCormack that were quoted in Section

Discuss whether the comments of John McCormack that were quoted in Section 12.2 involve any behavioral issues.

Q: Imagine that the current date is t1. A year ago (

Imagine that the current date is t1. A year ago (t0), the firm invested $125 million in the project depicted in the illustrative example in Section 12.5 at a time when expected cash flows were $25 mil...

Q: Suppose that the firm just had the one project (see Question

Suppose that the firm just had the one project (see Question 2) and you were thinking about acquiring the firm. What would the fair value of the acquisition be today, under the assumption that the fir...