Questions from Corporate Finance

Q: Say you own an asset that had a total return last year

Say you own an asset that had a total return last year of 11.4 percent. If the inflation rate last year was 4.8 percent, what was your real return?

Q: Suppose the real rate is 3 percent and the inflation rate is

Suppose the real rate is 3 percent and the inflation rate is 4.7 percent. What rate would you expect to see on a Treasury bill?

Q: Some companies, such as Reader’s Digest, have created classes of

Some companies, such as Reader’s Digest, have created classes of stock with no voting rights at all. Why would investors buy such stock?

Q: Referring to the previous questions, under what circumstances might a company

Referring to the previous questions, under what circumstances might a company choose not to pay dividends?

Q: Given the following information for Rosato Pizza Co., calculate the depreciation

Given the following information for Rosato Pizza Co., calculate the depreciation expense: sales=$41,000; costs=$19,500; addition to retained earnings=$5,100; dividends paid=$1,500; interest expense=$4...

Q: When it comes to voting in elections, what are the differences

When it comes to voting in elections, what are the differences between U.S. political democracy and U.S. corporate democracy?

Q: One of the assumptions of the two stage growth model is that

One of the assumptions of the two stage growth model is that the dividends drop immediately from the high growth rate to the perpetual growth rate. What do you think about this assumption? What happen...

Q: A substantial percentage of the companies listed on the NYSE and NASDAQ

A substantial percentage of the companies listed on the NYSE and NASDAQ don’t pay dividends, but investors are nonetheless willing to buy shares in them. How is this possible given your answer to the...

Q: Ragan, Inc., was founded nine years ago by brother and

Ragan, Inc., was founded nine years ago by brother and sister Carrington and Genevieve Ragan. The company manufactures and installs commercial heating, ventilation, and cooling (HVAC) units. Ragan, In...

Q: Antiques R Us is a mature manufacturing fi rm. The company

Antiques R Us is a mature manufacturing fi rm. The company just paid a $10.46 dividend, but management expects to reduce the payout by 4 percent per year indefi nitely. If you require an 11.5 percent...