Questions from Corporate Finance

Q: You purchased 1,000 shares of Zebulon Copper Co. five

You purchased 1,000 shares of Zebulon Copper Co. five years ago for $50 per share. Today Zebulon management is trying to decide whether to repurchase shares for $70 per share through a fixed-price ten...

Q: You are the Chief Financial Officer (CFO) of a large

You are the Chief Financial Officer (CFO) of a large publicly traded company. You would like to convey positive information about the firm to the market. If you agree with the conclusions from the Lin...

Q: You are the CFO of a public company that advises distressed companies

You are the CFO of a public company that advises distressed companies about how to manage their businesses. Your company has been performing extremely well. In fact, it has earned so much money that t...

Q: Explain how the issuance of new securities by a firm can produce

Explain how the issuance of new securities by a firm can produce useful information about the issuing firm. How can this information make the shares of the firm more valuable, even if it only confirms...

Q: Explain why holders of a firm’s debt should insist on a covenant

Explain why holders of a firm’s debt should insist on a covenant that restricts the amount of cash dividends the firm pays?

Q: Explain why managers of firms might prefer that their firms’ shares trade

Explain why managers of firms might prefer that their firms’ shares trade in a moderate per-share price range rather than in a high per-share price range. How do managers of firms keep their shares tr...

Q: Explain how a stock repurchase is different from a dividend payment?

Explain how a stock repurchase is different from a dividend payment?

Q: What might cause a firm to face capital constraints?

What might cause a firm to face capital constraints?

Q: List some common forms of business organization, and discuss how access

List some common forms of business organization, and discuss how access to capital differs across these forms of organization?

Q: You want to estimate the total intrinsic value of a large gas

You want to estimate the total intrinsic value of a large gas and electric utility company. This company has publicly traded stock and has been paying a regular dividend for many years. You decide tha...