Questions from Corporate Finance

Q: In 2014, Japanese liquor company Suntory Holdings Ltd. acquired U

In 2014, Japanese liquor company Suntory Holdings Ltd. acquired U.S. bourbon maker Beam Inc., for $14 billion. Is this a horizontal or vertical acquisition? How do you suppose Beam’s nationality affec...

Q: For each of the following scenarios, discuss whether profit opportunities exist

For each of the following scenarios, discuss whether profit opportunities exist from trading in the stock of the firm under the conditions that (1) the market is not weak form efficient, (2) the mark...

Q: In 2016, automobile manufacturer BMW completed its $1 billion investment

In 2016, automobile manufacturer BMW completed its $1 billion investment to increase production at its South Carolina plant by 50 percent. BMW apparently felt that it would be better able to compete a...

Q: In the chapter, we gave several examples of so-called

In the chapter, we gave several examples of so-called payday loans. As you saw, the interest rates on these loans can be extremely high and are even called predatory by some. Do you think such high in...

Q: In the chapter, we mentioned that many companies have been under

In the chapter, we mentioned that many companies have been under pressure to declassify their boards of directors. Why would investors want a board to be declassified? What are the advantages of a cla...

Q: What are the difficulties in using the PE ratio to value stock

What are the difficulties in using the PE ratio to value stock?

Q: You are at work when a co-worker excitedly comes to

You are at work when a co-worker excitedly comes to your desk and shows you the scenario analysis that he has just completed for a potential new project. All three scenarios show a positive NPV. He st...

Q: With some insurance policies, the value of the asset to be

With some insurance policies, the value of the asset to be replaced is the current market value. For example, if you bought a couch five years ago for $1,000, and the current value of the couch is $30...

Q: In 2009 and 2010, investment banks were under fire for interest

In 2009 and 2010, investment banks were under fire for interest rate swaps sold to municipalities and nonprofits. For example, California’s water resource authority paid about $305 million, North Caro...

Q: You have been at your job with S&S Air for

You have been at your job with S&S Air for a week now and have decided you need to sign up for the company’s 401(k) plan. Even after your discussion with Audrey Sanborn, the Bledsoe Financial Services...