Questions from Managerial Finance

Q: Explain each of the three other approaches to common stock valuation:

Explain each of the three other approaches to common stock valuation: (a) book value, (b) liquidation value, and (c) P/E multiples. Which of them is considered the best?

Q: Explain the linkages among financial decisions, return, risk, and

Explain the linkages among financial decisions, return, risk, and stock value.

Q: Assuming that all other variables remain unchanged, what effect would each

Assuming that all other variables remain unchanged, what effect would each of the following have on stock price? (a) The firm’s risk premium increases. (b) The firm’s required return decreases. (c) Th...

Q: What risks do common stockholders take that other suppliers of capital do

What risks do common stockholders take that other suppliers of capital do not?

Q: How does a rights offering protect a firm’s stockholders against the dilution

How does a rights offering protect a firm’s stockholders against the dilution of ownership?

Q: Explain the relationships among authorized shares, outstanding shares, treasury stock

Explain the relationships among authorized shares, outstanding shares, treasury stock, and issued shares.

Q: Classify the following changes in each of the accounts as either an

Classify the following changes in each of the accounts as either an inflow or an outflow of cash. During the year (a) marketable securities increased, (b) land and buildings decreased, (c) accounts pa...

Q: What are the advantages to both U.S.-based and

What are the advantages to both U.S.-based and foreign corporations of issuing stock outside their home markets? What are American depositary receipts (ADRs)? What are American depositary shares (ADSs...

Q: What claims do preferred stockholders have with respect to distribution of earnings

What claims do preferred stockholders have with respect to distribution of earnings (dividends) and assets?

Q: Explain the cumulative feature of preferred stock. What is the purpose

Explain the cumulative feature of preferred stock. What is the purpose of a call feature in a preferred stock issue?