Questions from Corporate Finance


Q: Why are preferred shares sometimes called hybrid securities?

Why are preferred shares sometimes called hybrid securities?

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Q: What are the basic rights associated with equity securities? How do

What are the basic rights associated with equity securities? How do these differ across different categories or classes of equities?

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Q: Why do voting rights affect the prices of some common shares and

Why do voting rights affect the prices of some common shares and not others?

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Q: Why is dividend income preferred by both corporations and individual investors?

Why is dividend income preferred by both corporations and individual investors?

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Q: Explain why issuing debt or preferred shares with warrants attached or issuing

Explain why issuing debt or preferred shares with warrants attached or issuing convertible bonds or convertible preferred shares, may represent attractive sources of financing for higher-risk firms.

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Q: Define and explain how to determine the following for a convertible:

Define and explain how to determine the following for a convertible: conversion price, conversion value, straight bond value, floor value, and convertible premium.

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Q: Briefly describe the following types of preferred shares: straight, retractable

Briefly describe the following types of preferred shares: straight, retractable, and floating rate.

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Q: a. Calculate the effective annual cost of forgoing the discount from

a. Calculate the effective annual cost of forgoing the discount from credit terms of 2/15 net 60. The selling price is $800. b. Another supplier offers $820 on credit terms of net 90. If you could fin...

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Q: Why would you want a cumulative feature when purchasing preferred shares?

Why would you want a cumulative feature when purchasing preferred shares?

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Q: 1. Which of the following statements is false? a

1. Which of the following statements is false? a. Financing total assets is called the financial structure decision. b. Capital structure is how invested capital is financed. c. The financial structur...

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