Questions from Corporate Finance


Q: How can the return on a portfolio be expressed in terms of

How can the return on a portfolio be expressed in terms of a factor model?

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Q: Critically evaluate the following statements: Playing the stock market is like

Critically evaluate the following statements: Playing the stock market is like gambling. Such speculative investing has no social value other than the pleasure people get from this form of gambling.

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Q: Do you think preferred stock is more like debt or equity?

Do you think preferred stock is more like debt or equity? Why?

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Q: Why is the use of debt financing referred to as financial “

Why is the use of debt financing referred to as financial “leverage”?

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Q: What are the advantages of using the SML approach to finding the

What are the advantages of using the SML approach to finding the cost of equity capital? What are the disadvantages? What are the specific pieces of information needed to use this method? Are all of t...

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Q: Ren-Stimpy International is planning to raise fresh equity capital by

Ren-Stimpy International is planning to raise fresh equity capital by selling a large new issue of common stock. Ren-Stimpy is currently a publicly traded corporation, and it is trying to choose betwe...

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Q: Suppose a certain stock currently sells for $30 per share.

Suppose a certain stock currently sells for $30 per share. If a put option and a call option are available with $30 exercise prices, which do you think will sell for more? Explain.

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Q: How is the APV of a project calculated?

How is the APV of a project calculated?

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Q: Your company currently uses traditional capital budgeting techniques, including net present

Your company currently uses traditional capital budgeting techniques, including net present value. After hearing about the use of real option analysis, your boss decides that your company should use r...

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Q: Why will convertible bonds not be voluntarily converted to stock before expiration

Why will convertible bonds not be voluntarily converted to stock before expiration?

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