Questions from Corporate Finance

Q: Stephenson Real Estate Company was founded 25 years ago by

Stephenson Real Estate Company was founded 25 years ago by the current CEO, Robert Stephenson. The company purchases real estate, including land and buildings, and rents the property to tenants. The c...

Q: Webb Corporation was founded 20 years ago by its president,

Webb Corporation was founded 20 years ago by its president, Bryan Webb. The company originally began as a mail-order company, but it has grown rapidly in recent years, in large part due to its website...

Q: Sterling Wyatt, the president of Howlett Industries, has been exploring

Sterling Wyatt, the president of Howlett Industries, has been exploring ways of improving the company’s financial performance. Howlett manufactures and sells office equipment to reta...

Q: Joi Chatman recently received her finance degree and has decided

Joi Chatman recently received her finance degree and has decided to enter the mortgage broker business. Rather than working for someone else, she will open her own shop. Her cousin Mike has approached...

Q: S&S Air is preparing its first public securities offering. In

S&S Air is preparing its first public securities offering. In consultation with Renata Harper of underwriter Raines and Warren, Chris Guthrie decided that a convertible bond with a 20-year maturity wa...

Q: As a new graduate, you’ve taken a management position with

As a new graduate, you’ve taken a management position with Exotic Cuisines, Inc., a restaurant chain that just went public last year. The company’s restaurants specialize in exotic main dishes, using...

Q: Birdie Golf, Inc., has been in merger talks with Hybrid

Birdie Golf, Inc., has been in merger talks with Hybrid Golf Company for the past six months. After several rounds of negotiations, the offer under discussion is a cash offer of $185 million for Hybri...

Q: Suppose Sunburn Sunscreen and Frostbite Thermal wear in the previous

Suppose Sunburn Sunscreen and Frostbite Thermal wear in the previous problems have decided to merge. Because the two companies have seasonal sales, the combined firm’s return on assets will have a sta...

Q: Warf Computers has decided to proceed with the manufacture and

Warf Computers has decided to proceed with the manufacture and distribution of the virtual keyboard (VK) the company has developed. To undertake this venture, the company needs to obtain equipment for...

Q: First City Bank pays 9 percent simple interest on its

First City Bank pays 9 percent simple interest on its savings account balances, whereas Second City Bank pays 9 percent interest compounded annually. If you made a deposit of $7,500 in each bank, how...