Reference no: EM132423105
Question 1: Describe the main categories of financial ratios and discuss how financial ratios can facilitate the financial analysis.
Question 2: Discuss the effect of FIFO (First In First Out) and LIFO (Last In First Out) methods on the balance sheet and income statement during periods of inflation.
Question 3: Describe what are the common-size financial statements and explain why corporations use them.
Question 4: Under what circumstances can a firm increase its share price by cutting its dividend and increasing its investment?
Question 5: How does the growth rate used in the total payout model differ from the growth rate used in the dividend-discount model?
Question 6: State the efficient market hypothesis. What are the implications of the efficient market hypothesis for corporate managers?
Question 7: Explain what is a firm's weighted average cost of capital (WACC). Explain why it is often used as a discount rate to evaluate projects.
Question 8: What inputs do we need to estimate a firm's equity cost of capital using the Capital Asset Pricing Model (CAPM)?
Question 9: Explain in detail why projects within the same firm may have different costs of capital.