Questions from Corporate Finance


Q: Why can the book value and market value of a firm differ

Why can the book value and market value of a firm differ?

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Q: What does a negative value for AFN mean?

What does a negative value for AFN mean?

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Q: From a firm manager’s or investor’s point of view, which is

From a firm manager’s or investor’s point of view, which is more important―the book value of a firm or the market value of the firm?

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Q: What do we mean by a progressive tax structure?

What do we mean by a progressive tax structure?

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Q: What is the difference between an average tax rate and a marginal

What is the difference between an average tax rate and a marginal tax rate?

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Q: How does the payment of interest on debt affect the amount of

How does the payment of interest on debt affect the amount of taxes the firm must pay?

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Q: The income statement is prepared using GAAP. How does this affect

The income statement is prepared using GAAP. How does this affect the reported revenue and expense measures listed on the balance sheet?

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Q: Why do financial managers and investors find cash flows to be more

Why do financial managers and investors find cash flows to be more important than accounting profit?

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Q: What is the difference between cash flows from operating activities, cash

What is the difference between cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities?

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Q: What are free cash flows for a firm? What does it

What are free cash flows for a firm? What does it mean when a firm’s free cash flow is negative?

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