Questions from Corporate Finance

Q: Northwood Corp. has a dividend payout ratio of 60 percent,

Northwood Corp. has a dividend payout ratio of 60 percent, return on equity of 14.5 percent, total assets of $11,500,450, and equity of $4,652,125. Calculate the firm’s internal rate of growth (IGR)?...

Q: Renewal Company has net income of $1.25 million and

Renewal Company has net income of $1.25 million and a dividend payout ratio of 35 percent. It currently has equity of $2,875,223. What is the firm’s sustainable growth rate?

Q: Mello Wines, a California winery, grows its grapes locally,

Mello Wines, a California winery, grows its grapes locally, uses local labor, and sells its wines only in the United States. Can this firm be exposed to foreign exchange risk?

Q: How can the insurance policy on a car be viewed as an

How can the insurance policy on a car be viewed as an option?

Q: A U.S. firm owns a subsidiary in Belgium.

A U.S. firm owns a subsidiary in Belgium. What kind of foreign exchange risk does the U.S. firm face?

Q: Suppose GE issues bearer bonds in France denominated in British pounds.

Suppose GE issues bearer bonds in France denominated in British pounds. What type of bonds are these?

Q: What is IGR, and why is it of interest to management

What is IGR, and why is it of interest to management?

Q: Why is the capital budget an important part of a firm’s financial

Why is the capital budget an important part of a firm’s financial planning?

Q: Why do financing and investment decisions have to be made concurrently?

Why do financing and investment decisions have to be made concurrently?

Q: A writer (seller) of a call option may or may

A writer (seller) of a call option may or may not actually own the underlying asset. If he or she owns the asset, and therefore will have the asset available to deliver should the option be exercised,...