Questions from Corporate Finance

Q: Find the terms and conditions of a recent bond issue and compare

Find the terms and conditions of a recent bond issue and compare them with those of the AMAT issue.

Q: Select the most appropriate term from within the parentheses: a

Select the most appropriate term from within the parentheses: a. (High-grade bonds/Low-grade bonds) generally have only light sinking-fund requirements. b. Equipment trust certificates are usually iss...

Q: Suppose that the AMAT bond was issued at face value and that

Suppose that the AMAT bond was issued at face value and that investors continue to demand a yield of 5.85%. Sketch what you think would happen to the bond price as the first interest payment date appr...

Q: a. Look at Table 24.1. Suppose that AMAT

a. Look at Table 24.1. Suppose that AMAT decides to call the bond one year before it is due to expire. The interest rate on one-year Treasury bonds is 2%. What price must AMAT pay to call the bonds? b...

Q: Maple Aircraft has issued a 4¾% convertible subordinated debenture due 2023

Maple Aircraft has issued a 4¾% convertible subordinated debenture due 2023. The conversion price is $47.00 and the debenture is callable at 102.75% of face value. The market price of the convertible...

Q: Thanks to acquisition of a key patent, your company now has

Thanks to acquisition of a key patent, your company now has exclusive production rights for barkelgassers (BGs) in North America. Production facilities for 200,000 BGs per year will require a $25 mill...

Q: Sweeney Pies has issued a zero-coupon 10-year bond

Sweeney Pies has issued a zero-coupon 10-year bond that can be converted into 10 Sweeney shares. Comparable straight bonds are yielding 8%. Sweeney stock is priced at $50 a share. a. Suppose that you...

Q: Zenco Inc. is financed by 3 million shares of common stock

Zenco Inc. is financed by 3 million shares of common stock and by $5 million face value of 8% convertible debt maturing in 2029. Each bond has a face value of $1,000 and a conversion ratio of 200. Wha...

Q: Match each of the following terms with one of the definitions below

Match each of the following terms with one of the definitions below: A. Revolving credit B. Bridge loan C. Term loan D. Syndicated loan E. Commitment fee F. Maintenance covenant a. Requirement that bo...

Q: Some of the following reasons for leasing are rational. Others are

Some of the following reasons for leasing are rational. Others are irrational or assume imperfect or inefficient capital markets. Which of the following reasons are the rational ones? a. The lessee’s...