Questions from Corporate Finance

Q: You work for a nuclear research laboratory that is contemplating leasing a

You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner costs $5,800,000, and it w...

Q: What is a call option? A put option? Under what

What is a call option? A put option? Under what circumstances might you want to buy each? Which one has greater potential profit? Why?

Q: What is the price of a 15-year, zero coupon

What is the price of a 15-year, zero coupon bond paying $1,000 at maturity, assuming semiannual compounding, if the YTM is: a. 6 percent? b. 8 percent? c. 10 percent?

Q: Use the option quote information shown here to answer the questions that

Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $114. a. Suppose you buy 10 contracts of the February 110 call option. How much wi...

Q: Gasworks, Inc., has been approached to sell up to 5

Gasworks, Inc., has been approached to sell up to 5 million gallons of gasoline in three months at a price of $2.65 per gallon. Gasoline is currently selling on the wholesale market at $2.34 per gallo...

Q: Eckely, Inc., recently issued bonds with a conversion ratio of

Eckely, Inc., recently issued bonds with a conversion ratio of 14.5. If the stock price at the time of the bond issue was $53.16, what was the conversion premium?

Q: Down Under Boomerang, Inc., is considering a new three-

Down Under Boomerang, Inc., is considering a new three- year expansion project that requires an initial fixed asset investment of $1.65 million. The fixed asset will be depreciated straight-line to ze...

Q: In each of the following cases, find the unknown variable.

In each of the following cases, find the unknown variable. Ignore taxes.

Q: Watters Umbrella Corp. issued 15-year bonds 2 years ago

Watters Umbrella Corp. issued 15-year bonds 2 years ago at a coupon rate of 5.9 percent. The bonds make semiannual payments. If these bonds currently sell for 105 percent of par value, what is the YTM...

Q: Rework Problems 1 and 2 assuming the ending share price is $

Rework Problems 1 and 2 assuming the ending share price is $57.