Questions from Corporate Finance

Q: Here are some data for five companies in the same industry:

Here are some data for five companies in the same industry: You have been asked to calculate a measure of times-interest-earned for the industry. Discuss the possible ways that you might calculate suc...

Q: If you buy a nine-month T-bill future,

If you buy a nine-month T-bill future, you undertake to buy a $1 million three-month bill in nine months’ time. Suppose that Treasury bills and notes currently offer the following yields: Mo...

Q: How would rapid inflation affect the accuracy and relevance of a manufacturing

How would rapid inflation affect the accuracy and relevance of a manufacturing company’s balance sheet and income statement? Does your answer depend on how much debt the firm has issued?

Q: Suppose that you wish to use financial ratios to estimate the risk

Suppose that you wish to use financial ratios to estimate the risk of a company’s stock. Which of those that we have described in this chapter are likely to be helpful? Can you think of other accounti...

Q: We noted that, when calculating EVA, you should calculate income

We noted that, when calculating EVA, you should calculate income as the sum of the after-tax interest payment and net income. Why do you need to deduct the tax shield? Would an alternative be to use a...

Q: Sometimes analysts use the average of capital at the start and end

Sometimes analysts use the average of capital at the start and end of the year to calculate return on capital. Provide some examples to illustrate when this does and does not make sense.

Q: Take another look at Geomorph Trading’s balance sheet in Problem 10 and

Take another look at Geomorph Trading’s balance sheet in Problem 10 and consider the following additional information: The “R&R reserve” cover...

Q: Construct a balance sheet for Galactic Enterprises given the following data:

Construct a balance sheet for Galactic Enterprises given the following data: Cash balances………….…………..……………$25,000 Inventories……………………………………… $30,000 Net plant and equipment…………………..$140,000 Accounts r...

Q: Table 28.10 gives abbreviated balance sheets and income statements for

Table 28.10 gives abbreviated balance sheets and income statements for Starbucks. Calculate the following using balance-sheet figures from the start of the year: a. Return on assets. b....

Q: Residents of the northeastern United States suffered record-setting low temperatures

Residents of the northeastern United States suffered record-setting low temperatures throughout November and December 2024. Spot prices of heating oil rose 25% to over $7 a gallon. a. What effect did...