Questions from Financial Management

Q: If you were starting a business, what tax considerations might cause

If you were starting a business, what tax considerations might cause you to prefer to set it up as a proprietorship or a partnership rather than as a corporation?

Q: Define each of the following terms: a. Annual

Define each of the following terms: a. Annual report; balance sheet; income statement b. Common stockholders’ equity, or net worth; retained earnings c. Statement of stockholders’ equity; statement...

Q: If a “typical” firm reports $20 million of retained

If a “typical” firm reports $20 million of retained earnings on its balance sheet, can the firm definitely pay a $20 million cash dividend?

Q: a. Multinational corporation b. Exchange rate; fixed exchange

a. Multinational corporation b. Exchange rate; fixed exchange rate system; floating exchange rate c. Trade deficit; devaluation; revaluation d. Exchange rate risk; convertible currency; pegged exchang...

Q: Explain the difference between NOPAT and net income. Which is a

Explain the difference between NOPAT and net income. Which is a better measure of the performance of a company’s operations?

Q: What is free cash flow? Why is it the most important

What is free cash flow? Why is it the most important measure of cash flow?

Q: Vigo Vacations has $200 million in total assets, $5

Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $25 million in long-term debt. What is the debt ratio?

Q: Winston Washers’s stock price is $75 per share. Winston has

Winston Washers’s stock price is $75 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in comm...

Q: Reno Revolvers has an EPS of $1.50, a

Reno Revolvers has an EPS of $1.50, a cash flow per share of $3.00, and a price/cash flow ratio of 8.0. What is its P/E ratio?

Q: Needham Pharmaceuticals has a profit margin of 3% and an equity

Needham Pharmaceuticals has a profit margin of 3% and an equity multiplier of 2.0. Its sales are $100 million and it has total assets of $50 million. What is its ROE?