Questions from Corporate Finance

Q: Here is recent financial data on Pisa Construction, Inc.

Here is recent financial data on Pisa Construction, Inc. Pisa has not performed spectacularly to date. However, it wishes to issue new shares to obtain $80,000 to finance expansion into a promising m...

Q: After each of the following issue methods, we have listed two

After each of the following issue methods, we have listed two types of issue. Choose the one more likely to employ that method. a. Rights issue (initial public offer/further sale of an already public...

Q: The Modern Language Corporation earned $1.6 million on net

The Modern Language Corporation earned $1.6 million on net assets of $20 million. The cost of capital is 11.5%. Calculate the net ROI and EVA.

Q: For each of the following pairs of issues, which is likely

For each of the following pairs of issues, which is likely to involve the lower proportionate underwriting and administrative costs? a. A large issue/a small issue b. A bond issue/a common stock iss...

Q: Explain the difference between a uniform-price auction and a discriminatory

Explain the difference between a uniform-price auction and a discriminatory auction. Why might you prefer to sell securities by one method rather than another?

Q: In 2014, Entergy paid a regular quarterly dividend of $.83

In 2014, Entergy paid a regular quarterly dividend of $.83 per share. a. Match each of the following dates. (A1) Friday, July 25 (B1) Record date (A2) Monday, August 11 (B2) Payment date (A3) Tuesday...

Q: Here are several “facts” about typical corporate dividend policies.

Here are several “facts” about typical corporate dividend policies. Which are true and which false? a. Companies decide each year’s dividend by looking at their capital expenditure requirements and t...

Q: Seashore Salt Co. has surplus cash. Its CFO decides to

Seashore Salt Co. has surplus cash. Its CFO decides to pay back $4 per share to investors by initiating a regular dividend of $1 per quarter or $4 per year. The stock price jumps to $90 when the pay-o...

Q: Look again at Problem 3. Assume instead that the CFO announces

Look again at Problem 3. Assume instead that the CFO announces a stock repurchase of $4 per share instead of a cash dividend. a. What happens to the stock price when the repurchase is announced? Woul...

Q: Go back to the first Rational Demiconductor balance sheet. Now assume

Go back to the first Rational Demiconductor balance sheet. Now assume that Rational wins a lawsuit and is paid $1 million in cash. Its market capitalization rises by that amount. It decides to pay out...