Questions from Corporate Finance

Q: Why is a preferred stock with a dividend tied to short-

Why is a preferred stock with a dividend tied to short-term interest rates an attractive short-term investment for corporations with excess cash?

Q: Are poison pills good or bad for stockholders? How do you

Are poison pills good or bad for stockholders? How do you think acquiring firms are able to get around poison pills?

Q: A company produces an energy-intensive product and uses natural gas

A company produces an energy-intensive product and uses natural gas as the energy source. The competition primarily uses oil. Explain why this company is exposed to fluctuations in both oil and natura...

Q: What are the costs of shortages? Describe them.

What are the costs of shortages? Describe them.

Q: In each of the following pairings, indicate which firm would probably

In each of the following pairings, indicate which firm would probably have a longer credit period and explain your reasoning. a. Firm A sells a miracle cure for baldness; Firm B sells toupees. b. Firm...

Q: Describe the advantages and disadvantages of a taxable merger as opposed to

Describe the advantages and disadvantages of a taxable merger as opposed to a tax-free exchange. What is the basic determinant of tax status in a merger? Would an LBO be taxable or nontaxable? Explain...

Q: What is the absolute priority rule?

What is the absolute priority rule?

Q: Given that many multinationals based in many countries have much greater sales

Given that many multinationals based in many countries have much greater sales outside their domestic markets than within them, what is the particular relevance of their domestic currency?

Q: Consider the following financial statement information for the Rivers Corporation:

Consider the following financial statement information for the Rivers Corporation: Calculate the operating and cash cycles. How do you interpret your answer?

Q: Suppose the exchange rate for the Swiss franc is quoted as SF

Suppose the exchange rate for the Swiss franc is quoted as SF 1.09 in the spot market and SF 1.11 in the 90-day forward market. a. Is the dollar selling at a premium or a discount relative to the fran...