Questions from Corporate Finance

Q: You are considering investing in a private company that is owned by

You are considering investing in a private company that is owned by a friend of yours. You have read through the company’s financial statements and believe that they are reliable. Multiples of similar...

Q: Does the expected rate of return that is calculated using CAPM,

Does the expected rate of return that is calculated using CAPM, with a beta estimated from stock returns in the public market, reflect a minority or a controlling ownership position? How is it likely...

Q: Discuss the pros and cons of an S-corporation compared with

Discuss the pros and cons of an S-corporation compared with a C-corporation?

Q: You have started a business that sells a home gardening system that

You have started a business that sells a home gardening system that allows people to grow vegetables on the countertop in their kitchens. You are considering two options for marketing your product. Th...

Q: Aggie Motors is a chain of used car dealerships that has publicly

Aggie Motors is a chain of used car dealerships that has publicly traded stock. Using the adjusted book value approach, you have estimated the value of Aggie Motors to be $45,646,000. The company has...

Q: You are an analyst at a private equity firm that buys private

You are an analyst at a private equity firm that buys private companies, improves their operating performance, and sells them for a profit. Your boss has asked you to estimate the fair market value of...

Q: Using the enterprise value/EBITDA multiple, what is the total

Using the enterprise value/EBITDA multiple, what is the total value of Johnson Machine Tool Company? What is the per share value of Johnson’s stock? Refer to the information Johnson Machine Tool Comp...

Q: Which of the above multiples analyses do you believe is more appropriate

Which of the above multiples analyses do you believe is more appropriate? Refer to the information Johnson Machine Tool Company: Use the following information concerning Johnson Machine Tool Company....

Q: How do dealers differ from brokers?

How do dealers differ from brokers?

Q: How can the Profitability Index (PI) help in choosing projects

How can the Profitability Index (PI) help in choosing projects when a firm faces capital constraints? What are its limitations?