Questions from Corporate Finance

Q: The shareholders of Flannery Company have voted in favor of a buyout

The shareholders of Flannery Company have voted in favor of a buyout offer from Stultz Corporation. Information about each firm is given here: Flannery’s shareholders will receive...

Q: Turnover Chen, Inc., has an average collection period of 34

Turnover Chen, Inc., has an average collection period of 34 days. Its average daily investment in receivables is $61,300. What are annual credit sales? What is the receivables turnover?

Q: Use Figure 31.1 to answer the following questions. Suppose

Use Figure 31.1 to answer the following questions. Suppose interest rate parity holds, and the current six-month risk-free rate in the United States is 1.9 percent. What must the six-month risk-free r...

Q: A mail-order firm processes 5,450 checks per month

A mail-order firm processes 5,450 checks per month. Of these, 70 percent are for $55 and 30 percent are for $80. The $55 checks are delayed two days on average; the $80 checks are delayed three days o...

Q: What is the duration of a bond with three years to maturity

What is the duration of a bond with three years to maturity and a coupon of 6.1 percent paid annually if the bond sells at par?

Q: Which would a firm prefer: A net collection float or a

Which would a firm prefer: A net collection float or a net disbursement float? Why?

Q: If a textile manufacturer wanted to hedge against adverse movements in cotton

If a textile manufacturer wanted to hedge against adverse movements in cotton prices, it could buy cotton futures contracts or buy call options on cotton futures contracts. What would be the pros and...

Q: In an ideal economy, net working capital is always zero.

In an ideal economy, net working capital is always zero. Why might net working capital be positive in a real economy?

Q: What are the different inventory types? How do the types differ

What are the different inventory types? How do the types differ? Why are some types said to have dependent demand, whereas other types are said to have independent demand?

Q: What are DIP loans? Where do DIP loans fall in the

What are DIP loans? Where do DIP loans fall in the APR?