Questions from Corporate Finance

Q: Given that First Solar was up by over 796 percent for 2007

Given that First Solar was up by over 796 percent for 2007, why didn’t all investors hold this stock?

Q: Explain what is meant by business risk and financial risk. Suppose

Explain what is meant by business risk and financial risk. Suppose Firm A has greater business risk than Firm B. Is it true that Firm A also has a higher cost of equity capital? Explain.

Q: How are soft rationing and hard rationing different? What are the

How are soft rationing and hard rationing different? What are the implications if a firm is experiencing soft rationing? Hard rationing?

Q: Several celebrated investors and stock pickers frequently mentioned in the financial press

Several celebrated investors and stock pickers frequently mentioned in the financial press have recorded huge returns on their investments over the past two decades. Is the success of these particular...

Q: As mentioned in the text, Continental Airlines fi led for bankruptcy

As mentioned in the text, Continental Airlines fi led for bankruptcy, at least in part, as a means of reducing labor costs. Whether this move was ethical, or proper, was hotly debated. Give both sides...

Q: The DRK Corporation has recently developed a dividend reinvestment plan, or

The DRK Corporation has recently developed a dividend reinvestment plan, or DRIP. The plan allows investors to reinvest cash dividends automatically in DRK in exchange for new shares of stock. Over ti...

Q: You have recently been hired by Piepkorn Manufacturing to work in the

You have recently been hired by Piepkorn Manufacturing to work in the newly established treasury department. Piepkorn Manufacturing is a small company that produces cardboard boxes in a variety of siz...

Q: For initial public offerings of common stock, 2007 was a relatively

For initial public offerings of common stock, 2007 was a relatively slow year, with about $35.2 billion raised by the process. Relatively few of the 160 firms involved paid cash dividends. Why do you...

Q: In the aggregate, debt offerings are much more common than equity

In the aggregate, debt offerings are much more common than equity offerings and typically much larger as well. Why?

Q: Airline announced that it would stretch out its bill payments to 45

Airline announced that it would stretch out its bill payments to 45 days from 30 days. The reason given was that the company wanted to “control costs and optimize cash flow.” The increased payables pe...