Questions from Corporate Finance

Q: Janice borrowed $100,000 from friends and family to start

Janice borrowed $100,000 from friends and family to start her company (a sole proprietorship). Business has been poor recently, and Janice has decided to cease operations and liquidate the firm. She e...

Q: Calculate the bank discount yield on a 92‐day U.

Calculate the bank discount yield on a 92‐day U.S. T‐bill that is currently quoted at $97.75. Find the bond equivalent yield on a 92‐day Canadian T‐bill with the same quoted price.

Q: a . What is the value of a 10‐year,

a . What is the value of a 10‐year, zero coupon bond with a face value of $1,000 when the market rate is 8 percent? b . Calculate the YTM of the above zero coupon bond if the current price is $760.

Q: A 90‐day U.S. T‐bill has

A 90‐day U.S. T‐bill has a bank discount yield (kBDY) of 4.673 percent. Find the quoted price. Find the bond equivalent yield (kBEY) on a 90‐day Canadian T‐bill with the same quoted price.

Q: Altech Inc. has a convertible bond with a face value of

Altech Inc. has a convertible bond with a face value of $1,000 and coupon rate of 6 percent. The bond will mature in 10 years, and its current price is $950. The bond can be converted at any time into...

Q: A bond has a yield to maturity of 8 percent and a

A bond has a yield to maturity of 8 percent and a current yield of 6 percent. Is the bond trading at par, at a premium, or at a discount? What can you say about the coupon rate?

Q: Use two approaches to determine ROE in year 2. (Hint

Use two approaches to determine ROE in year 2. (Hint: one approach is from the definition and the other is to use the DuPont system.)

Q: The present value of a dollar to be received one year from

The present value of a dollar to be received one year from today is 0.927644. The present value of a dollar to be received two years from today is 0.854172. What is the price of a bond that pays an an...

Q: Determine Excelsior Inc. ’ s efficiency ratio of times interest earned

Determine Excelsior Inc. ’ s efficiency ratio of times interest earned in year 2.

Q: Determine the company ’ s efficiency ratios including gross profit margin and

Determine the company ’ s efficiency ratios including gross profit margin and operating margin in year 2. Explain the differences.