Questions from Corporate Finance

Q: If increases in dividends tend to be followed by (immediate)

If increases in dividends tend to be followed by (immediate) increases in share prices, how can it be said that dividend policy is irrelevant?

Q: Zipcar, the car sharing company, went public in April 2011

Zipcar, the car sharing company, went public in April 2011. Assisted by the investment bank Goldman Sachs, Zipcar sold 9.68 million shares at $18 each, thereby raising a total of $174.24 million. By t...

Q: Zoso is a rental car company that is trying to determine whether

Zoso is a rental car company that is trying to determine whether to add 25 cars to its fleet. The company fully depreciates all its rental cars over five years using the straight-line method. The new...

Q: If the risk of a stock increases, what is likely to

If the risk of a stock increases, what is likely to happen to the price of call options on the stock? To the price of put options? Why?

Q: What is wrong with the simple view that it is cheaper to

What is wrong with the simple view that it is cheaper to issue a bond with a warrant or a convertible feature because the required coupon is lower?

Q: If a market is semistrong form efficient, is it also weak

If a market is semistrong form efficient, is it also weak form efficient? Explain.

Q: Based on the dividend growth model, what are the two components

Based on the dividend growth model, what are the two components of the total return on a share of stock? Which do you think is typically larger?

Q: Why do noninvestment-grade bonds have much higher direct costs than

Why do noninvestment-grade bonds have much higher direct costs than investment-grade issues?

Q: When is EAC analysis appropriate for comparing two or more projects?

When is EAC analysis appropriate for comparing two or more projects? Why is this method used? Are there any implicit assumptions required by this method that you find troubling? Explain.

Q: The Mango Republic has just liberalized its markets and is now permitting

The Mango Republic has just liberalized its markets and is now permitting foreign investors. Tesla Manufacturing has analyzed starting a project in the country and has determined that the project has...