Questions from Corporate Finance


Q: A linear probability model you have developed finds there are two factors

A linear probability model you have developed finds there are two factors influencing the past bankruptcy behavior of firms: the equity multiplier and the total asset turnover ratio. Based on past ban...

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Q: The Altman’s Z-score model has several weaknesses. What are

The Altman’s Z-score model has several weaknesses. What are they?

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Q: A survey of a local market has provided the following average cost

A survey of a local market has provided the following average cost data: Johnson Construction Corp. (JCC) has assets of $3 million and an average cost of 20 percent. Anderson Architects (AA) has asset...

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Q: Describe the three dimensions of revenue synergies that may be achieved in

Describe the three dimensions of revenue synergies that may be achieved in a merger.

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Q: A survey of a national market has provided the following average cost

A survey of a national market has provided the following average cost data: Jackson County Construction (JCC) has assets of $2.55 million and an average cost of 30 percent. Arkansas Architects (AA) ha...

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Q: You own stock in Make-UP-Artists, Inc.

You own stock in Make-UP-Artists, Inc. which has just made a bid of $30 million to purchase MHM Corporation. MHM Corp. currently has total cash flows of $2.5 million that are expected to grow by 2 per...

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Q: Describe the difference between a forward rate selling at a discount and

Describe the difference between a forward rate selling at a discount and selling at a premium. If the spot rate between the U.S. dollar and the Brazilian real is $1 = 2.0875 real and the 3-month forwa...

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Q: What is the difference between economies of scope and economies of scale

What is the difference between economies of scope and economies of scale? Can two firms involved in a merger benefit from both economies of scale and economies of scope?

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Q: Cakes, Corp. currently has a 60 percent market share in

Cakes, Corp. currently has a 60 percent market share in banking services, followed by Cookies, Inc., with 20 percent and Dippen Dough with 20 percent. a. What is the concentration ratio as measured by...

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Q: What is the Herfindahl-Hirschman Index? How is it calculated

What is the Herfindahl-Hirschman Index? How is it calculated and interpreted?

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