Reference no: EM13742184

PART 1

Question 1: What is agent problem and why it is important in financial management?

Question 2: What is corporate governance?

Question 3: How can corporate governance mitigate agency problems?

Question 4: What are the agency problem between managers and bondholders?

Question 5: How can corporate governance reduce the agency problem between managers and stockholder?

Question 6: How can agency problem affect a firm's investment decision?

PART 2

Question 1: Dividend theories and their implication on firm's dividend payouts:

• Dividend irrelevance theory
• Bird-in-the-hand theory
• Tax preference theory
• Signaling hypothesis
• Residual distribution model

Question 2: Difference between dividend payments and share repurchase including advantages, disadvantage and their impact on stock price

Question 3: Stock dividends & stock splits and their impact on outstanding shares and stock price

PART 3

Question 1: How did the bird-in-the-hand theory get its name?

Question 2: Why do the clientele effect and the information content hypotheses imply that investors prefer stable dividends?

Question 3: How do stock splits and dividends affect stock prices?

Question 4: What are the advantage of share repurchase over dividends?

PART 4

Question 1: How capital structure can affect the WACC and FCF

Question 2: How financial leverage can affect the risk of the firm

Question 3: Different capital structure theories and their implication for mangers:

• MM: No tax;
• MM with tax;
• Trade-off theory;
• Signaling theory;
• Pecking order;
• Agency costs;
• Windows of opportunity

Question 4: Briefly describe some ways in which the capital structure can affect the WACC and FCF

Question 5: Explain this statement: "Using leverage has both good and bad effects"

Question 6: What is the optimal capital structure under M&M no tax theory?

Question 7: Explain how information asymmetry and signals affect capital structure decisions?

Question 8: How can the use of debt serve to discipline managers?

Question 9: Why firms with relatively stable sales are able to carry relatively high debt ratios?

PART 5

Question 1: Reasons for mergers difference types of mergers

Question 2: Whether the merger create value for acquirers and target leveraged buyout, divestiture and holding companies

Question 3: What is the difference between a hostile and a friendly merger?

Question 4: Define synergy. Describe several situations that might produce synergistic gains?

Question 5: Explain how researchers can study the effects of mergers on shareholder wealth.

Question 6: What are some motives for divestitures?

Question 7: What are advantages of holding companies?

PART 6

Question 1: The procedure of bankruptcy

Question 2: Difference between reorganization from liquidation

Question 3: The advantage and disadvantage of filing for bankruptcy protection

Question 4: Which size of firm, large or small, is most prone to business failure? Why?

Question 5: What are advantages of liquidation by assignment versus a formal bankruptcy liquidation?

Question 6: How does a firm formally declare bankruptcy?

Question 7: What are the advantages of a formal reorganization under Chapter 11?

PART 7

Question 1: Factors that complicate financial management in multinational firms

Question 2: Issues involved in multinational capital budgeting

Question 3: Should firms require higher rates of return on foreign projects than on identical projected located at home?

Question 4: List some key differences in capital budgeting as applied to foreign versus domestic operations

Question 5: What are major factors that complicate financial management in multinational firms?