Questions from Corporate Finance

Q: Determine the call price ( C ), given the following information:

Determine the call price ( C ), given the following information: stock price ( S) $36, s trike price (X) $32, r isk-free rate (r) 5% , t 2 years, 20%.

Q: List and briefly describe the four basic stages of the IPO process

List and briefly describe the four basic stages of the IPO process.

Q: Paolo, the CEO of Paola Bros Inc., wants to have

Paolo, the CEO of Paola Bros Inc., wants to have a fleet of electric cars. These electric cars cost $1.5 million. For tax purposes, assume that these cars will depreciate at a rate of $160,000 per yea...

Q: You are given the following information: C0 = $300,

You are given the following information: C0 = $300,000; CCA rate (d) = 0.3; T = 0.4; RF = 4.5%; project beta = 1.2; market risk premium = 10%; SVn = $35,000; UCCn = $55,000. This project has a 5-year...

Q: You are given the following information: CFBT = $215,

You are given the following information: CFBT = $215,000; T = 40%; this project will last for eight years. The project has a 2.5-percent extra risk premium compared with the firm ’ s cost of capital....

Q: Calculate the present value of the operating cash flows if the revenue

Calculate the present value of the operating cash flows if the revenue of a project grows at 5 percent, while expense grows at 4 percent, given that Revenue1 = $15,000 and Expense 1 = $7,000. Assume t...

Q: Calculate the put price (P), according to put‐call

Calculate the put price (P), according to put‐call parity, given the information in Practice Problem 29.

Q: What is the strike price (X) if PU is $

What is the strike price (X) if PU is $50, PD is $42, and the hedge ratio ( h) is 2?

Q: Assume stock XYZ does not pay dividends and has a market value

Assume stock XYZ does not pay dividends and has a market value of $98 per share. There is a 60‐percent chance that the stock will trade for $130 in one year, and a 40‐ percent chance that it will trad...

Q: Does put‐call parity hold for the following? Riskfree rate

Does put‐call parity hold for the following? Riskfree rate = 5%, P0 = $13, C0 = $10, stock price (S) = $30, t = 4 years, strike price (X) = $33. If not, what is the put price according to put‐call par...