Case Questions for MGM 828‚ Fall 2012 Case 1: The Euro in Crisis a) Evaluate the European Central Bank’s (ECB) response to the financial crisis of 2008-2010. What was their analysis of the problem? b) The ECB responded less aggressively than the US Federal Reserve to the crisis. Why? c) In May 2010‚ should the ECB agree to purchase Greek sovereign debt? Case 2: Foreign Ownership of US Treasury Securities a) Why is foreign ownership of US Treasury securities rising? It is more interesting
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8. Calculating Interest Rates. In 2010 the average price per metre for owner-occupied flats in Copenhagen was about 23.000 Danish kroner. In 1995 the average price was around 6.000 Danish kroner. What was the annual increase in selling price? t = 2010 – 1995 = 16 FV= PV * (1 + r)^t 23.000 = 6000 * (1 + r)^16 (1 + r)^16 = 23.000/6000 = 3‚83 1 + r = 3.83^(1/16) = 1.087552 1.087552 – 1 = 0.087552 = 0‚088 r = 8.8% 9. Calculating the Number of Periods. You’re trying to save to buy a new
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Capital Budgeting Mini Case There are many different methods business owners use to efficiently analyze business investment. One of these effective methods is the calculation of the net present value or NPV. The second most effective method would be the calculations of the internal rate of return or IRR. There are also other useful methods as well‚ for example‚ the payback rule and the profitability index. Many business owners use the above procedures to help them in their decision making of acquiring
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Mini Case Chapter 11 BUS 401 Principles of Finance Lisa Parker Mini Case 11 Chapter 11 I am aware that this is my new position as assistant financial analyst at Caledonia Products and that I am asked to consider the introduction of a new product into the company. My job will be to analyze the information you require in depth with research regarding my answer. Let it be known that I will have put every ounce of my knowledge into this assignment to make this experience one for the record books
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Chapter 15. Mini Case | | | | | | | | | | | | | | | | | | | | | | Situation | | | | | | | | | | | | | | | Assume you have just been hired as a business manager of PizzaPalace‚ a regional pizza restaurant chain. The company’s EBIT was $50 million last year and is not expected to grow. The firm is currently financed with all equity and it has 10 million shares outstanding. When you took your corporate finance course‚ your instructor stated that most firms’ owners
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Bond - is defined as a long-term debt of a firm or the government set forth in writing and made under seal. Kinds of Bond 1. Government Bonds - are those issued by the government to finance its activities. 2. Corporate Bonds - are those issued by private corporations to finance their long -term funding requirements. Bonds as Distinguished from Stocks 1. A bond is a debt instrument while stock is an instrument of ownership. 2. Bondholders have priority over stockholders when payments
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1. What appears to be the problem areas in the Hobby Horse Company? The problem with Hobby Horse Company is that they were having a tough year throughout 2011. The company has $45 million loan that is due at the end of September‚ however the company does not have the means to cover the cost of the loan. Looking at the financial statement the company has fairly high leverage where their equity is not as strong. In addition‚ their current assets don’t cover current liabilities—meaning that the company
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Internet Mini Case #2 Tech Data Corporation Maryanne M. Rouse The Company TECH DATA CORPORATION’S (TECD) AGGRESSIVE GROWTH HAD TAKEN THE COMPANY from 10 employees and $2 million in sales in 1983 to approximately 8‚000 employees and $15.7 billion in sales for fiscal 2002 (fiscal year ended January 31‚ 2003) and secured the company’s position as a leading distributor of information technology (IT)‚ logistics management‚ and other value-added services to “solution providers‚” including value-added
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of planning and managing a firm’s long-term investments is called: A. B. C. D. E. working capital management. financial depreciation. agency cost analysis. capital budgeting. capital structure. 4. The mixture of debt and equity used by a firm to finance its operations is called: A. B. C. D. E. working capital management. financial depreciation. cost analysis. capital budgeting. capital structure. 5. The management of a firm’s short-term assets and liabilities is called: A. B. C. D. E. working capital
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Chapter 1 Corporate Finance- the acquisition and efficient use of funds required by the fund The acquisition refers to the finance decision Efficient use of funds refers to the investment decision A major aspect of corporate finance is the creation and determination of value Objective of Financial Management- Maximize shareholder wealth is the main goal—to maximize the market value of the firm 3 Main Decision Areas of Financial Manager to Achieve Maximization: 1. Investment Decision- What
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