Questions from Corporate Finance

Q: Is the following statement true or false? A risky security cannot

Is the following statement true or false? A risky security cannot have an expected return that is less than the risk-free rate because no risk-averse investor would be willing to hold this asset in eq...

Q: What factors determine the beta of a stock? Define and describe

What factors determine the beta of a stock? Define and describe each.

Q: For each of the following scenarios, discuss whether profit opportunities exist

For each of the following scenarios, discuss whether profit opportunities exist from trading in the stock of the firm under the conditions that (1) the market is not weak form efficient, (2) the mark...

Q: What is the difference between internal financing and external financing?

What is the difference between internal financing and external financing?

Q: The Phew Charitable Trust pays no taxes on its capital gains or

The Phew Charitable Trust pays no taxes on its capital gains or on its dividend income or interest income. Would it be irrational for it to have low-dividend, high-growth stocks in its portfolio? Woul...

Q: In April 2014, International Lease Finance Corporation (ILFC) announced

In April 2014, International Lease Finance Corporation (ILFC) announced a deal to purchase eight Airbus A330-200 and A350-900 passenger aircraft. ILFC then signed a long-term lease contract on the pla...

Q: A convertible bond with a par value of $1,000

A convertible bond with a par value of $1,000 has a conversion ratio of 19.2. What is the conversion price?

Q: When you take out an ordinary student loan, it is usually

When you take out an ordinary student loan, it is usually the case that whoever holds that loan is given a guarantee by the U.S. government, meaning that the government will make up any payments you s...

Q: Utility companies often face a decision to build new plants that burn

Utility companies often face a decision to build new plants that burn coal, oil, or both. If the prices of both coal and gas are highly volatile, how valuable is the decision to build a plant that can...

Q: How would the analysis of real options change if a company has

How would the analysis of real options change if a company has competitors?