Questions from Corporate Finance

Q: What are the main features of a corporate bond that would be

What are the main features of a corporate bond that would be listed in the indenture?

Q: In a world with no taxes, no transaction costs, and

In a world with no taxes, no transaction costs, and no costs of financial distress, is the following statement true, false, or uncertain? If a firm issues equity to repurchase some of its debt, the pr...

Q: Monster Magnet Manufacturing is considering leasing some equipment. The annual lease

Monster Magnet Manufacturing is considering leasing some equipment. The annual lease payment would be $295,000 per year for six years. The appropriate interest rate is 7 percent and the company is in...

Q: What are the deltas of a call option and a put option

What are the deltas of a call option and a put option with the following characteristics? What does the delta of the option tell you?

Q: Bauble, Inc., an all-equity firm, has eight

Bauble, Inc., an all-equity firm, has eight shares of stock outstanding. Yesterday, the firm’s assets consisted of nine ounces of platinum, currently worth $1,650 per ounce. Today, the company issued...

Q: Hagar Industrial Systems Company (HISC) is trying to decide between

Hagar Industrial Systems Company (HISC) is trying to decide between two different conveyor belt systems. System A costs $290,000, has a four-year life, and requires $89,000 in pretax annual operating...

Q: The price of Ervin Corp. stock will be either $53

The price of Ervin Corp. stock will be either $53 or $67 at the end of the year. Call options are available with one year to expiration. T-bills currently yield 5 percent. a. Suppose the current price...

Q: Consider a four-year project with the following information: Initial

Consider a four-year project with the following information: Initial fixed asset investment 5 $410,000; straight-line depreciation to zero over the four-year life; zero salvage value; price 5 $35; var...

Q: A stock has had returns of 14.38 percent, 8

A stock has had returns of 14.38 percent, 8.43 percent, 11.97 percent, 25.83 percent, and −9.17 percent over the past five years, respectively. What was the holding period return for the stock?

Q: Titan Mining Corporation has 8.7 million shares of common stock

Titan Mining Corporation has 8.7 million shares of common stock outstanding and 230,000 6.4 percent semiannual bonds outstanding, par value $1,000each. The common stock currently sells for $37 per sha...