CORPORATE FINANCE Master in Banking and Finance 2012 FINAL EXAM A. PROBLEMS (20 points each problem) 1. FAGE Manufacturing is currently an all-equity firm with 20 million shares outstanding and a stock price of $7.50 per share. Although investors currently expect FAGE to remain an all-equity firm‚ the company plans to announce that it will borrow $50 million and use the funds to repurchase shares. FAGE will pay interest only on this debt‚ and it has no further plans to increase or decrease
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CHAPTER 14 OPTIONS AND CORPORATE FINANCE Answers to Concepts Review and Critical Thinking Questions 1. A call option confers the right‚ without the obligation‚ to buy an asset at a given price on or before a given date. A put option confers the right‚ without the obligation‚ to sell an asset at a given price on or before a given date. You would buy a call option if you expect the price of the asset to increase. You would buy a put option if you expect the price of the asset to decrease. A
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Corporate finance: Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize corporate value while managing the firm’s financial risks. Although it is in principle different from managerial finance which studies the financial decisions of all firms‚ rather than corporations alone‚ the main concepts in the study of corporate finance
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CHAPTER 21 Accounting for Leases SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 21-1 The lease does not meet the transfer of ownership test‚ the bargain purchase test‚ or the economic life test [(5 years ÷ 8 years) < 75%]. However‚ it does pass the recovery of investment test. The present value of the minimum lease payments ($31‚000 X 4.16986 = $129‚266) is greater than 90% of the FV of the asset (90% X $138‚000 = $124‚200). Therefore‚ Callaway should classify the lease as a capital lease.
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Acquisition and Payment Cycle: Tests of Controls‚ Substantive Tests of Transactions‚ and Accounts Payable. Chapter 19 ©2008 Prentice Hall Business Publishing‚ Auditing 12/e‚ Arens/Beasley/Elder 19 - 1 Learning Objective 1 Identify the accounts and the classes of transactions in the acquisition and payment cycle. ©2008 Prentice Hall Business Publishing‚ Auditing 12/e‚ Arens/Beasley/Elder 19 - 2 Transactions in the Acquisition and Payment Cycle 1. Acquisitions of goods and services 2
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B6301: Corporate Finance Clarkson Lumber C C Co. Valuation Clarkson Valuation Navin Chopra 1 Clarkson‚ 1996 • At the beginning of 1996‚ company is entirely owned by Mr. Clarkson • Following tight funding during a period of good business performance‚ the company has obtained debt funding to payoff the trade credit‚ NP trade • While financials for the first quarter of 1996 are available‚ we will value the company as at the beginning of 1996/end of 1995 Clarkson Valuation
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Chapter 7 Stock Valuation Solution to Problems P7-1. LG 2: Authorized and Available Shares Basic (a) Maximum shares available for sale Authorized shares 2‚000‚000 Less: Shares outstanding 1‚400‚000 Available shares 600‚000 (b) $48‚000‚000Total shares needed 800‚000 shares$60== The firm requires an additional 200‚000 authorized shares to raise the necessary funds at $60 per share. (c) Aspin must amend its corporate charter to authorize the issuance of additional shares. P7-2. LG 2: Preferred Dividends
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Corporate Finance (MBA) FIN 502 School of Business SB328 amuslumov@ada.edu.az ADA University School of Business Syllabus for Corporate Finance (FIN 502) MBA Program Mission ADA’s School of Business mission is to prepare global and socially responsible graduates through excellence
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because there is no possibility of default‚ the risk of the firm’s equity does not change. Therefore‚ risk-free debt allows the firm to get the benefit of a low cost of capital of debt without raising its cost of capital of equity.” (3 points) Solution to Part I What is important? Perfect capital market‚ no taxes; M&M propositions apply here; total market value of GP is 300 m composed of 200 m equity and 100 m debt; the expected return on equity is 15% and the market value weight of equity is
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Chapter 19 El Filibusterismo He had begun writing it on October 1887 while practicing medicine in Calamba The following year‚ in London‚ he made some changes in the plot and corrected some chapters already written He wrote more chapters in Paris and Madrid‚ and finished the manuscript in Biarritz on March 29‚1891 September 18‚ 1891 the sequel to the Noli came off the Press Privations in Ghent & Alejandro Rizal left Brussel for Ghent a famous university city in Belgium. July 5‚ 1891 His reason
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