Questions from Corporate Finance

Q: Reliable Electric, a major Ruritanian producer of electrical products, is

Reliable Electric, a major Ruritanian producer of electrical products, is considering a proposal to manufacture a new type of industrial electric motor that would replace most of its existing product...

Q: Fama and French show that average stock returns on firms with small

Fama and French show that average stock returns on firms with small market capitalizations have been significantly higher than average returns for “large-cap” firms. What are the possible explanations...

Q: Which of the following observations appear to indicate market inefficiency? Explain

Which of the following observations appear to indicate market inefficiency? Explain whether the observation appears to contradict the weak, semistrong, or strong form of the efficient-market hypothesi...

Q: Fill in the blanks, using the following terms: floating rate

Fill in the blanks, using the following terms: floating rate, common stock, convertible, subordinated, preferred stock, senior, warrant. a. If a lender ranks behind the firm’s general creditors in th...

Q: The Finance in Practice box in Section 1-2 describes three

The Finance in Practice box in Section 1-2 describes three corporate practices that have been criticized as unethical. Select one of these and discuss at what point (if any) the practice slide into un...

Q: True or false? a. Financing for public corporations must

True or false? a. Financing for public corporations must flow through financial markets. b. Financing for private corporations must flow through financial intermediaries. c. Almost all foreign exchang...

Q: Which of the following are financial markets? a. NASDAQ

Which of the following are financial markets? a. NASDAQ. b. Vanguard Explorer Fund. c. JP Morgan Chase. d. Chicago Mercantile Exchange.

Q: True or false? a. Exchange traded funds are hedge

True or false? a. Exchange traded funds are hedge funds that can be bought and sold on the stock exchange. b. Hedge funds provide small investors with low-cost diversification. c. The sale of insuranc...

Q: Financial markets and intermediaries channel savings from investors to corporate investment.

Financial markets and intermediaries channel savings from investors to corporate investment. The savings make this journey by many different routes. Give a specific example for each of the following r...

Q: Explain briefly how each of the following allow individuals or companies to

Explain briefly how each of the following allow individuals or companies to spread their risk: a. An exchange traded fund. b. Commodity markets. c. A life insurance company.