Questions from Financial Management

Q: Benjamin Garcia’s start-up business is succeeding, but he needs

Benjamin Garcia’s start-up business is succeeding, but he needs $200,000 in additional funding to fund continued growth. Benjamin and an angel investor agree the business is worth $800,000 and the ang...

Q: Bynum and Crumpton Inc. (B&C), a small

Bynum and Crumpton Inc. (B&C), a small jewelry manufacturer, has been successful and has enjoyed a positive growth trend. Now B&C is planning to go public with an issue of common stock, and it...

Q: Is bankruptcy a fairly common occurrence among large companies, or is

Is bankruptcy a fairly common occurrence among large companies, or is it restricted primarily to small firms?

Q: Jan Volk, financial manager of Green Sea Transport (GST),

Jan Volk, financial manager of Green Sea Transport (GST), has been asked by her boss to review GST’s outstanding debt issues for possible bond refunding. Five years ago, GST issued $40,000,000 of 11%,...

Q: On the day an IPO comes out, the market price can

On the day an IPO comes out, the market price can rise above the offering price or fall below that price. Is it more common for the market price to close above or below the offering price on the day o...

Q: What’s the difference between an IPO and an SEO? Would you

What’s the difference between an IPO and an SEO? Would you view purchasing a stock in an SEO to be more or less risky than purchasing a stock in an IPO? Would you expect the same first day returns for...

Q: How do companies decide whether or not to refund their outstanding bonds

How do companies decide whether or not to refund their outstanding bonds? If the NPV as calculated in a bond refunding analysis is positive, does that mean that the company should call and refund the...

Q: What are some reasons why companies decide to go public? If

What are some reasons why companies decide to go public? If going public is a good idea, why don’t all companies do so?

Q: Sadik Industries must install $1 million of new machinery in its

Sadik Industries must install $1 million of new machinery in its Texas plant. It can obtain a bank loan for 100% of the required amount. Alternatively, a Texas investment banking firm that represents...

Q: Reynolds Construction needs a piece of equipment that costs $200.

Reynolds Construction needs a piece of equipment that costs $200. Reynolds can either lease the equipment or borrow $200 from a local bank and buy the equipment. If the equipment is leased, the lease...