Questions from Corporate Finance

Q: Primary Markets: Identify whether the following transactions are primary market or

Primary Markets: Identify whether the following transactions are primary market or secondary market transactions. a. Jim Hendry bought 300 shares of IBM through his brokerage account. b. Peggy Jones b...

Q: Holding all else constant, what will happen to the present value

Holding all else constant, what will happen to the present value of a future amount if you increase the discount rate? What if you increase the number of years?

Q: Given a change in market interest rates, which will change more

Given a change in market interest rates, which will change more; the market price of a bond with 20 years until maturity or the market price of a bond with 5 years until maturity? Assume all the chara...

Q: Which of the following classes of securities is likely to have the

Which of the following classes of securities is likely to have the lowest corporate borrowing cost? (LO 5) a. AAA rated bonds. b. A rated bonds. c. BB rated bonds. d. C rated bonds. e. All of the abov...

Q: Which of the following is/are advantages of the corporate form

Which of the following is/are advantages of the corporate form of organization? a. Reduced start-up costs b. Greater access to capital markets c. Unlimited liability d. Single taxation

Q: Identify the sources of agency costs. What are some ways these

Identify the sources of agency costs. What are some ways these costs can be controlled in a company?

Q: You just purchased a share of IBM stock on the New York

You just purchased a share of IBM stock on the New York Stock Exchange. What kind of transaction was this? a. Primary market transaction. b. Secondary market transaction. c. Futures market transaction...

Q: List the three forms of the efficient market hypothesis, and describe

List the three forms of the efficient market hypothesis, and describe what information is assumed to be reflected in security prices under each of these hypotheses.

Q: If the nominal rate of interest is 4.25 percent and

If the nominal rate of interest is 4.25 percent and the expected rate of inflation is 1.75 percent, what is the real rate of interest?

Q: What is the relation between business cycles and the general level of

What is the relation between business cycles and the general level of interest rates?