Questions from Financial Management

Q: Suppose you owned a portfolio consisting of $250,000 of

Suppose you owned a portfolio consisting of $250,000 of long-term U.S. government bonds. a. Would your portfolio be riskless? Explain. b. Now suppose the portfolio consists of $250,000 of 30-day Treas...

Q: Sue Wilson, the new financial manager of New World Chemicals (

Sue Wilson, the new financial manager of New World Chemicals (NWC), a California producer of specialized chemicals for use in fruit orchards, must prepare a formal financial forecast for 2009. NWC&aci...

Q: Would it ever be rational for a firm to borrow money in

Would it ever be rational for a firm to borrow money in order to pay dividends? Explain.

Q: What is the difference between a stock dividend and a stock split

What is the difference between a stock dividend and a stock split? As a stockholder, would you prefer to see your company declare a 100% stock dividend or a two-for-one split? Assume that either actio...

Q: How would each of the following changes tend to affect aggregate (

How would each of the following changes tend to affect aggregate (that is, the average for all corporations) payout ratios, other things held constant? Explain your answers. a. An increase in the pers...

Q: The following yields on U.S. Treasury securities were taken

The following yields on U.S. Treasury securities were taken from a recent financial publication: Term Rate 6 months………………….5.1% 1 year……………………….5.5% 2 year……………………….5.6%...

Q: What are the two definitions of cash, and why do corporate

What are the two definitions of cash, and why do corporate treasurers often use the second definition?

Q: A firm’s bonds have a maturity of 10 years with a $

A firm’s bonds have a maturity of 10 years with a $1,000 face value, have an 8% semiannual coupon, are callable in 5 years at $1,050, and currently sell at a price of $1,100. What are their nominal yi...

Q: At year-end 2008, total assets for Ambrose Inc.

At year-end 2008, total assets for Ambrose Inc. were $1.2 million and accounts payable were $375,000. Sales, which in 2008 were $2.5 million, are expected to increase by 25% in 2009. Total assets and...

Q: Pierce Furnishings generated $2 million in sales during 2008, and

Pierce Furnishings generated $2 million in sales during 2008, and its year-end total assets were $1.5 million. Also, at year-end 2008, current liabilities were $500,000, consisting of $200,000 of note...