Questions from Corporate Finance

Q: The stock of Augusta Light and Power is currently selling at $

The stock of Augusta Light and Power is currently selling at $12 per share. Over the next year the company is undertaking a new electricity production project. If the project is successful, the compan...

Q: ADCAP International is a U.S.-based company which sells

ADCAP International is a U.S.-based company which sells its products primarily in overseas markets. The company’s stock is currently trading at $50 per share. Depending on the outcome of U.S. trade ne...

Q: Your company is considering opening a new factory in Europe to serve

Your company is considering opening a new factory in Europe to serve the growing demand for your product there. What real options might you want to consider in your capital budgeting analysis of the f...

Q: Your firm, which uses oil as an input to its production

Your firm, which uses oil as an input to its production processes, hedges its exposure to changes in the price of oil by buying call options on oil at today’s price. If the price of oil goes down by t...

Q: Digital, Inc., an electronic games manufacturer, is planning to

Digital, Inc., an electronic games manufacturer, is planning to purchase flash memory from one of two sources. Kyoto, Inc., quotes a price of ¥6,800 per gigabyte. The current exchange rate is ¥102.30/...

Q: You are provided the following working capital information for the Blue Ridge

You are provided the following working capital information for the Blue Ridge Company: If all sales are made on credit, what are the firm’s operating and cash conversion cycles?

Q: Merrifield Cosmetics calculates that its operating cycle for last year was 76

Merrifield Cosmetics calculates that its operating cycle for last year was 76 days. The company had $230,000 in its accounts receivable account and had sales of $1.92 million. Approximately how many...

Q: Below is a partial aging of accounts receivable for Bitar Roofing Services

Below is a partial aging of accounts receivable for Bitar Roofing Services. Fill in the rest of the information and determine Bitar’s days’ sales outstanding. How d...

Q: What is the pecking order theory of capital structure?

What is the pecking order theory of capital structure?

Q: By obtaining a lockbox, Nizam’s Manufacturing was able to reduce its

By obtaining a lockbox, Nizam’s Manufacturing was able to reduce its total cash collection time by two days. The firm has annual sales of $570,000 and can earn 4.75 percent annual interest. Assuming t...