Q: DGF Corporation has come to you for some advice on how best
DGF Corporation has come to you for some advice on how best to increase their leverage over time. In the most recent year, DGF had an EBITDA of $300 million, owed $1 billion in both book value and mar...
See AnswerQ: Cell Phone is a cellular firm that reported net income of $
Cell Phone is a cellular firm that reported net income of $50 million in the most recent financial year. The firm had $1 billion in debt, on which it reported interest expenses of $100 million in the...
See AnswerQ: Lube Oil, in Question 3, paid a dividend of $
Lube Oil, in Question 3, paid a dividend of $20 million and bought back $25 million in stock. Estimate how much the cash balance of the firm changed during the year.
See AnswerQ: You are analyzing a convertible preferred stock with the following characteristics for
You are analyzing a convertible preferred stock with the following characteristics for the security: • There are 50,000 preferred shares outstanding, with a face value of $100 and a 6% preferred divid...
See AnswerQ: Maximizing stock prices does not make sense because investors focus on short
Maximizing stock prices does not make sense because investors focus on short-term results and not on the long-term consequences. Comment.
See AnswerQ: You have just done a regression of monthly stock re- turns
You have just done a regression of monthly stock re- turns of HeavyTech, a manufacturer of heavy machinery, on monthly market returns over the past five years and come up with the following regression...
See AnswerQ: You have been asked to calculate the debt ratio for a firm
You have been asked to calculate the debt ratio for a firm that has the following components to its financing mix: • The firm has 1 million shares outstanding, trading at $50 per share. • The firm has...
See AnswerQ: A small manufacturing firm, which has limited access to capital,
A small manufacturing firm, which has limited access to capital, has a capital rationing constraint of $150 million and is faced with the following investment projects(numbers in millions): a. Which o...
See AnswerQ: As CEO of a major corporation, you have to make a
As CEO of a major corporation, you have to make a decision on how much you can afford to borrow. You currently have 10 million shares outstanding, and the market price per share is $50. You also curre...
See AnswerQ: STL has asked you for advice on putting together the details of
STL has asked you for advice on putting together the details of the new debt issues it is planning to make. What information would you need to obtain to provide this advice?
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