Questions from Financial Management

Q: When a company issues new securities, how do flotation costs affect

When a company issues new securities, how do flotation costs affect the cost of raising that capital?

Q: What is the time value of money?

What is the time value of money?

Q: What does the “weight” refer to in the weighted average

What does the “weight” refer to in the weighted average cost of capital?

Q: How do tax considerations affect the cost of debt and the cost

How do tax considerations affect the cost of debt and the cost of equity?

Q: For a given IOS and MCC, how do financial managers decide

For a given IOS and MCC, how do financial managers decide which proposed capital budgeting projects to accept, and which to reject?

Q: Explain how to measure the firm risk of a capital budgeting project

Explain how to measure the firm risk of a capital budgeting project.

Q: Explain why we measure a project’s risk as the change in the

Explain why we measure a project’s risk as the change in the CV.

Q: How does the net present value relate to the value of the

How does the net present value relate to the value of the firm?

Q: What is the decision rule for accepting or rejecting proposed projects when

What is the decision rule for accepting or rejecting proposed projects when using net present value?

Q: What is the decision rule for accepting or rejecting proposed projects when

What is the decision rule for accepting or rejecting proposed projects when using internal rate of return?