Questions from Corporate Finance

Q: We discussed five international capital market relationships: relative PPP, IRP

We discussed five international capital market relationships: relative PPP, IRP, UFR, UIP, and the international Fisher effect. Which of these would you expect to hold most closely?

Q: Some people argue that the efficient markets hypothesis cannot explain the 1987

Some people argue that the efficient markets hypothesis cannot explain the 1987 market crash or the high price-to-earnings ratio of Internet stocks during the late 1990s. What alternative hypothesis i...

Q: Proponents of behavioral finance use three concepts to argue that markets are

Proponents of behavioral finance use three concepts to argue that markets are not efficient. What are these arguments?

Q: What does the lack of transparency in the bond market imply for

What does the lack of transparency in the bond market imply for bond investors?

Q: Discuss the accounting criteria for determining whether or not a lease must

Discuss the accounting criteria for determining whether or not a lease must be reported on the balance sheet using the accounting rules in place before 2019. In each case, give a rationale for the cri...

Q: Often, junk bonds are not rated. Why?

Often, junk bonds are not rated. Why?

Q: Common advice on Wall Street is “Keep your alpha high and

Common advice on Wall Street is “Keep your alpha high and your beta low.” Why?

Q: Some companies, such as Alphabet, have created classes of stock

Some companies, such as Alphabet, have created classes of stock with no voting rights at all. Why would investors buy such stock?

Q: Referring back to the Boeing example used at the beginning of the

Referring back to the Boeing example used at the beginning of the chapter, note that we suggested that Boeing’s stockholders probably didn’t suffer as a result of the reported loss. What do you think...

Q: Discuss the IRS criteria for determining whether or not a lease is

Discuss the IRS criteria for determining whether or not a lease is tax deductible. In each case, give a rationale for the criterion.