Questions from Corporate Finance

Q: Watkins Resources faces a smooth annual demand for cash of $1

Watkins Resources faces a smooth annual demand for cash of $1,500,000, incurs transaction costs of $75 every time they sell marketable securities, and can earn 3.7 percent on their marketable securiti...

Q: HotFoot Shoes would like to maintain their cash account at a minimum

HotFoot Shoes would like to maintain their cash account at a minimum level of $25,000, but expect the standard deviation in net daily cash flows to be $4,000, the effective annual rate on marketable s...

Q: Using the information in the table, compute the required return for

Using the information in the table, compute the required return for each company using both CAPM and the constant growth model. Compare and discuss the results. Assume that the market portfolio will e...

Q: Veggie Burgers, Inc., would like to maintain their cash account

Veggie Burgers, Inc., would like to maintain their cash account at a minimum level of $245,000, but expect the standard deviation in net daily cash flows to be $12,000, the effective annual rate on ma...

Q: Your bank offers you a $140,000 line of credit

Your bank offers you a $140,000 line of credit with an interest rate of 2.30 percent per quarter. The loan agreement also requires that 7 percent of the unused portion of the credit line be deposited...

Q: Go to the SEC’s Edgar site at http://www.sec

Go to the SEC’s Edgar site at http://www.sec.gov/edgar.shtml and download the latest annual (“10-K”) report for the firm of your choice. Use the financial statements in the report to calculate the fir...

Q: Is it possible for a firm to have negative net working capital

Is it possible for a firm to have negative net working capital? How?

Q: Would it be possible for a decision to deny credit to your

Would it be possible for a decision to deny credit to your customers be value maximizing? How?

Q: Which of the following will result in an increase in net working

Which of the following will result in an increase in net working capital?

Q: Would it be possible for a firm to have a negative cash

Would it be possible for a firm to have a negative cash cycle? How?