Questions from Corporate Finance

Q: What are secondary market transactions? How do secondary markets facilitate the

What are secondary market transactions? How do secondary markets facilitate the primary markets?

Q: Find Finns ’ Fridges ’ return on equity (ROE) for

Find Finns ’ Fridges ’ return on equity (ROE) for years 1 and 2, using the owners ’ equity figure at the end of each year. Did this ratio improve or get worse between year 1 and year 2?

Q: State three of the most basic principles of IFRS.

State three of the most basic principles of IFRS.

Q: Calculate the cash price of the following bond, sold on September

Calculate the cash price of the following bond, sold on September 21: par = $1,000; coupon rate = 4 percent, paid on January 1 and July 1; quoted price = $956. Explain why the cash price is different...

Q: Describe why financial and market intermediaries exist in our financial system.

Describe why financial and market intermediaries exist in our financial system.

Q: The following values are the spread for corporate bond yields.

The following values are the spread for corporate bond yields. a . One‐year T‐bills are trading with a YTM of 6 percent. What yield would you expect to find on A&ac...

Q: Using the Fisher relationship, calculate the exact real interest rate and

Using the Fisher relationship, calculate the exact real interest rate and the approximate real rate, given a Tbill rate of 8 percent and an expected inflation rate of 3.6 percent.

Q: In the DuPont system, there are two components of ROA.

In the DuPont system, there are two components of ROA. Determine whether efficiency or productivity (or both) is responsible for the increase in ROA for Finns ’ Fridges from year 1 to year 2.

Q: Calculate the price of a bond with FV of $1,

Calculate the price of a bond with FV of $1,000, a coupon rate of 8 percent (paid semi‐annually), and five years to maturity when: a . k b = 10 percent. b . kb = 8 percent. c . kb = 6 percent.

Q: Suppose that, several years ago, the Canadian government issued three

Suppose that, several years ago, the Canadian government issued three very similar bonds; each has a $1,000 face value and a 10‐percent coupon rate and will mature in five years. The only difference b...