What is the definition of risk and definition of return

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Question 1. What is the goal of the corporation? How does this goal sometime conflict with a firm's social responsibility? Please give a real-life example of a company that has not focused properly on its social responsibility. (A popular company that we all know)

Question 2. What does the phrase "cash is king" mean? Given an example

Question 3. What are the primary ways in which capital is transferred between savers and borrowers? Who are the participants and what are the details? Please show the diagrams

Question 4. This question is about the major financial statements that are used to measure a company. Can you please define the major statements and explain the relationships between them. Also, can you explain how the following scenarios would impact the statements and which statements are impacted:

a. Company sells a building for cash
b. Sales increase due to a new product offering and those sales are made on credit
c. Company decides to raised funds via fixed income products to expand the company

Question 5. Define the key market determinants for interest rates? Using those determinants explain which of the following instruments in each pair would have a higher interest rate and which components are responsible for the difference.

A 2 yr US Treasury Notes vs a 10 Yr US Treasury Bond
A 5 yr AAA rated corporate Bond vs a 5 yr US Treasury Note
A 10 yr BB- rate Corporate Bond vs a 5 yr AA+ Corporate bond

Question 6. What is the definition of risk? What is the definition of return? What is their relationship? Please use a real life financial situation that clearly lays out the relationship.

Question 7. SolarExtreme is a new green energy company that has a patented technology for generating cheap electricity from the sun. SolarExtreme is expected to grow at G1% per year over the next 2 years, G2% for 3 years, and then G3% a year beyond that. Assuming the company just paid a dividend of $A per share, a risk free rate of X%, a market return of Y%, and a Beta of Z, please layout the steps, equations and timeline to show how you would calculate the price of the stock.

Reference no: EM132506416

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