COMM370 – Alejandra Medina Practice for Lecture 12-13: Modigliani-Miller Propositions Question 1. Prove Modigliani-Miller proposition 1 with corporate taxes. As part of your answer‚ clearly state the underlying assumptions‚ explain the intuition underlying the proof‚ and conceptually interpret the meaning of the proposition. Note: you should be able to formally prove MM 1 & MM2 as we did in class. Question 2. Levered Inc. and Unlevered Inc. are identical in every respect except for capital
Premium Stock Stock market Finance
asset pricing model (CAPM) and the security market line Risk and Return M K Lai Page 2 Introduction to Risk and Return finance can be complicated‚ but it can be reduced to three basic concepts cash flows Risk and Return time value of money risk and return M K Lai building blocks in finance Page 3 Basic Assumptions in Finance people are rational people prefer more wealth to less (higher expected return) people are risk averse investors require compensation
Premium Financial markets
1 Bonds (3 points) A company aims to takeover one of its suppliers valued at 2 million Euros and is planning to fund the takeover by issuing three-year zero coupon bonds‚ each with face value C1000. After having their credit rating checked‚ executives have decided that they need to issue 2400 of these bonds to raise the 2 million needed to fund this takeover. What is the YTM of the bonds issued by the company? (a) 5.79% (b) 7.13% (c) 6.27% (d) 5.34% If the company’s credit rating changes due to
Premium Bond Stock Weighted average cost of capital
NPVs—one for the status quo and one for the new machine.) 4. Craft a memo to the board of directors stating your recommendation about investing in the new Zinser machine. Part of your memo should explain why it is better to invest in the Zinser or to pay a dividend to the shareholders. Be sure to explain the primary reasons that justify your recommended course of
Premium
ON THE LIMITATIONS OF THE FREEDOM OF EXPRESSION 1 Introduction The Constitution‚ Article 3‚ Section 4 provides: “No law shall be passed abridging the freedom of speech‚ of expression‚ or of the press‚ or of the right of people peaceably to assemble and petition the government for redress of grievance. *The Constitution forbids not the abridging of speech‚ but the abridging of freedomof speech. 3 There are several reasons why freedom of expression is guaranteed by the Constitution. For
Free Freedom of speech First Amendment to the United States Constitution Democracy
The Systems Approach to Curriculum Development Introduction This booklet provides a basic introduction to the paradigm that has dominated educational technology and educational development since the 1970 ’s - the systems approach. It begins by looking at how educational technology evolved from the ’technology in education ’ model on which it was originally based to the current ’technology of education ’ model - a model that is founded on general systems theory. It then introduces some of the
Premium Educational psychology Psychology Learning
primary institution to interpret the law of the land. Yet technical‚ political‚ and institutional limitations have been established to restrict the power of the supreme court. Chief Justice Jay believed courts only retain the right to interpret the law within context of a case or controversy. Hypothetically entrapping the court’s power to lend advisory opinions concerning the law. Even so‚ this limitation is not applied to multiple state courts making it more of
Premium Supreme Court of the United States United States Constitution Law
markets. 2. Explain why many financial analysts treat preferred stock as a special type of bond rather than as a true equity security. 3. Describe how the general dividend-valuation model values a share of stock. 4. Discuss the assumptions that are necessary to make the general dividend-valuation model easier to use‚ and be able to use the model to compute the value of a firm’s stock. 5. Explain why g must be less than R in the constant-growth dividend model. 6. Explain how valuing
Premium Stock market Stock Preferred stock
There are some limitations to the senses of sight and sense of hearing. For example‚ our eyes cannot see very small objects such as germs while our ears could not hear very small or very strong. However‚ with the advent of modern technology‚ obstacles and limitations to the senses as this can also be overcome. To overcome the limitations of sight‚ the telescope‚ microscope and magnifier are used. The telescope let the space scientists to be able to look very distant objects like the moon‚ so that
Premium Sound Sense Hearing
ISSUE: A) Common and statutory law limitations of landownership in Zambia; and (B) the legality of Compulsory Acquisition. AUTHOR: KATALILO JOY (A) INTRODUCTION This is a paper discussing the limitations imposed by law (common and statutory) on land in Zambia. Land in Zambia is governed using the Land Act Chapter 184. According to section 3(1) of the Land Act‚ all land in Zambia is vested in the President who is to hold it forever on behalf of the people of Zambia[1]. The President
Premium Property Common law Real property