Reference no: EM13834658
1. Analyze the proposition of Franco Modigliani and Merton Milles (MM). "When there are no taxes and capital markets work well, the market value of a company does not depend on its capital structure. In other words, CFOs cannot increase the value by changing the combination of titles that are used to finance the company" Use numeric hypothetical examples to argue your contribution.
2. At the end of 2014, ABC Corp. paid US $855 million debt interest:
a. How much more would have paid in taxes if the corporation is funded solely with private capital?
b. What would have been the present value of tax savings interest of ABC Corp. if the company permanently keeps the same debt level of 2014? Assume an interest rate of 6.5% and a tax rate of 40%.
3. How do these events affect the size of the optimal investment of the company in current assets?
a. Interest rate increase from 5.5% to 7.5%
b. The inventories are introduced just in time,
c. Customers pressure on the company to adopt a softer policy of credit sales.
4. Analyze the following statement: "Financial planning is necessary because funding decisions and investment are included and should not be mutually independent"
|
What is dills weighted average cost of capital
: "If the efficient-market hypothesis is true, the pension fund manager might as well select a portfolio with a pin." Explain why this is not the case. 1000 words. What is Dill's weighted average cost of capital (WACC). What is an estimatedreturn that..
|
|
What is ytm of rau inc
: Rau Inc. has 7.0 percent coupon bonds on the market with 9 years to maturity. The bonds make semi-annual payments and currently sell for 90 percent of par. What is the YTM?
|
|
What is the npv and should jj enterprises make the purchase.
: JJ Enterprises is considering the purchase of a new machine that will produce thumb drives. Assume JJ Enterprises uses a discount rate of 14 percent and has a tax rate of 34 percent. What is the NPV of the project and should JJ Enterprises make the p..
|
|
Ethical limits that managers should observe when taking risk
: Risk is a major concern of almost all investors. When shareholders invest their money in a firm, they expect managers to take risks with those funds. What do you think are the ethical limits that managers should observe when taking risks with other p..
|
|
Analyze the proposition of franco modigliani and merton
: Analyze the proposition of Franco Modigliani and Merton Milles (MM). "When there are no taxes and capital markets work well, the market value of a company does not depend on its capital structure. In other words, CFOs cannot increase the value by cha..
|
|
To access and download stock and index price
: The objectives of this exercise: 1. To access and download stock and index price data from yahoo.com. 2. To discern the difference between a real-time closing price and an adjusted price. 3. To discover how yahoo.com calculates beta for an individ..
|
|
How much must the balance of the fund equal on june
: Stephen intends to make equal contributions on June 30 of each of the years 2010-2013. (Round all answers to 2 decimal places, e.g. 10,250.25.) (a) How much must the balance of the fund equal on June 30, 2013, in order for Stephen Bosworth to satisfy..
|
|
Explain the relationship between mechanical work and energy
: Explain the relationship between mechanical work and energy.Define Mechanical Work. Define energy, kinetic energy & gravitational potential energy.
|
|
Write a program computehalf.java
: Write a program ComputeHalf.Java that asks the user to a string. Write a method secondHalf that returns the second half of the input string.
|