Questions from Corporate Finance

Q: Unicom is a regulated utility serving Northern Illinois. The following table

Unicom is a regulated utility serving Northern Illinois. The following table lists the stock prices and dividends on Unicom from 1989 to 1998. a. Estimate the average annual return you would have made...

Q: U.S. steel companies have generally been considered mature in

U.S. steel companies have generally been considered mature in terms of growth and often take on high leverage to finance their plant and equipment. Steel companies in some emerging markets often have...

Q: You have a project that does not require an initial in-

You have a project that does not require an initial in- vestment but has its expenses spread over the life of the project. Can the IRR be estimated for this project? Why or why not?

Q: Assume that you are advising a Turkish firm on corporate financial questions

Assume that you are advising a Turkish firm on corporate financial questions and that you do not believe that the Turkish stock market is efficient. Would you recommend stock price maximization as the...

Q: You are the supervisor of a town where the roads are in

You are the supervisor of a town where the roads are in need of repair. You have a limited budget and are considering two options: • You can patch up the roads for $100,000, but you will have to repea...

Q: IPOs are difficult to value because firms going public tend to be

IPOs are difficult to value because firms going public tend to be small, and little information is available about them. Investment bankers have to underprice IPOs because they bear substantial pricin...

Q: Pfizer, one of the largest pharmaceutical companies in the United States

Pfizer, one of the largest pharmaceutical companies in the United States, is considering what its debt capacity is. In March 1995, Pfizer had an outstanding market value of equity of $24.27 billion, d...

Q: You are trying to decide whether the debt structure that Bethlehem Steel

You are trying to decide whether the debt structure that Bethlehem Steel has currently is appropriate, given its assets. You regress the changes in firm value against changes in interest rates and arr...

Q: InTech, a computer software firm that has never paid dividends before

InTech, a computer software firm that has never paid dividends before, is considering whether it should start doing so. This firm has a cost of equity of 22% and a cost of debt of 10% (the tax rate is...

Q: You have been asked to value Office Help, a private firm

You have been asked to value Office Help, a private firm providing office support services in the New York area. The firm reported pretax operating income of $10 million in its most recent financial y...