Questions from Corporate Finance

Q: Explain why diversification per se is probably not a good reason for

Explain why diversification per se is probably not a good reason for merger.

Q: The exchange rate for the Australian dollar is currently A$1

The exchange rate for the Australian dollar is currently A$1.40. This exchange rate is expected to rise by 10 percent over the next year. a. Is the Australian dollar expected to get stronger or weaker...

Q: Fair-to-Midland Manufacturing, Inc. (FMM),

Fair-to-Midland Manufacturing, Inc. (FMM), has applied for a loan at True Credit Bank. Jon Fulkerson, the credit analyst at the bank, has gathered the following information from the companyâ...

Q: Use the information in Figure 31.1 to answer the following

Use the information in Figure 31.1 to answer the following questions: a. What is the six-month forward rate for the Japanese yen in yen per U.S. dollar? Is the yen selling at a premium or a discount?...

Q: Purple Feet Wine, Inc., receives an average of $13

Purple Feet Wine, Inc., receives an average of $13,800 in checks per day. The delay in clearing is typically three days. The current interest rate is .018 percent per day. a. What is the company’s flo...

Q: Bethesda Mining is a midsized coal mining company with 20 mines located

Bethesda Mining is a midsized coal mining company with 20 mines located in Ohio, Pennsylvania, West Virginia, and Kentucky. The company operates deep mines as well as strip mines. Most of the coal min...

Q: Indicate the effect that the following will have on the operating cycle

Indicate the effect that the following will have on the operating cycle. Use the letter I to indicate an increase, the letter D for a decrease, and the letter N for no change. a. Receivables average g...

Q: Assume that the following balance sheets are stated at book value.

Assume that the following balance sheets are stated at book value. Suppose that Jurion Co. purchases James, Inc. Then suppose the fair market value of James’s fixed assets is $23,000...

Q: Kyoto Joe, Inc., sells earnings forecasts for Japanese securities.

Kyoto Joe, Inc., sells earnings forecasts for Japanese securities. Its credit terms are 1/15, net 30. Based on experience, 70 percent of all customers will take the discount. a. What is the average co...

Q: Suppose a financial manager buys call options on 50,000 barrels

Suppose a financial manager buys call options on 50,000 barrels of oil with an exercise price of $65 per barrel. She simultaneously sells a put option on 50,000 barrels of oil with the same exercise p...