Reference no: EM133420771
Question 1. What are some of the major sources of short-term financing, and how are interest rates on these loans quoted? How do firms develop a short-term financing plan that meets their need for cash? (- 400 to 500 words )
Question 2. Solve the following questions:-
(A)- Create the statement of sources and uses of cash from the following entries:
(B)- Energetic, Inc. believes that it can acquire Satisfied Industries and improve efficiency to the extent that the market value of Satisfied will increase by $5 million. Satisfied currently sells for $20 a share, and there are 1 million shares outstanding.
1. Satisfied's management is willing to accept a cash offer of $25 a share. Can the merger be accomplished on a friendly basis?
2. What will happen if Satisfied's management holds out for an offer of $28 a share?
Question 3 . Describe the basic differences between mergers, leveraged buyouts, management buyouts, divestitures, and spin-offs. ( 300 to 400 words )
Question 4 - How can options, futures, and forward contracts be used to devise simple hedging strategies? Discuss similarities and differences between futures contracts and forward contracts. ( 300 to 400 words )