A calculate christies cash conversion cycle 11 what

Info icon This preview shows pages 2–4. Sign up to view the full content.

View Full Document Right Arrow Icon
a. Calculate Christie’s cash conversion cycle. 11. What are the some costs associated with low inventories? 12. What is the aging schedule and what can be learned from it? 13. What are two principal reasons for holding cash? 14. What are the four elements of firm’s credit policy? 15. What is the cash conversion cycle? What is its equation? Initial Public Offering, Investment Banking and Financial Restructuring 16. Describe three advantages of going public for companies (Initial Public Offering) 17. Describe three disadvantages of going public for companies (Initial Public Offering) 18. What exactly investment banks do for the companies that are willing to go public (IPO) 19. A company is planning an IPO. Its underwriters have said the stock will sell at $50 per share. The underwriters will charge a 7% spread. How many shares must the company sell to net $93 million, ignoring any other expenses? 20. Define and explain 2 investment banking activities? (page 804) 21. What is the difference between roadshow and book-building? 22. Security Brokers Inc. specializes in underwriting new issues by small firms. On a recent offering of Beedles Inc., the terms were as follows: Price to public $5 per share
Image of page 2

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Number of shares 3 million Proceeds to Beedles $14,000,000 The out-of-pocket expenses incurred by Security Brokers in the design and distribution of the issue were $300,000. What profit or loss would Security Brokers incur if the issue were sold to the public at the following average price? a. $5 per share 23. The Beranek Company, whose stock price is now $25, needs to raise $20 million in common stock. Underwriters have informed the firm’s management that they must price the new issue to the public at $22 per share because of signaling effects. The underwriters’ compensation will be 5% of the issue price, so Beranek will net $20.90 per share. The firm will also incur expenses in the amount of $150,000. How many shares must the firm sell to net $20 million after underwriting and flotation expenses? 24. Why investment banks have strong incentives to underprice the issue? 25. A company is planning an IPO. Its underwriters have said the stock will sell at $50 per share. The underwriters will charge a 7% spread. How many shares must the company sell to net $93 million, ignoring any other expenses. Goals and Corporate Governance of the Firm 26. What is a firm’s fundamental or intrinsic value? What might cause a firm’s intrinsic value to be different than its actual market value? 27. Agency Problems are mitigated by good systems of Corporate Governance. Do you agree with it? Please explain you answer. 28. Should managers look after only the interests of their shareholders? Please give broader explanation. 29. Corporations increase value by accepting all investment projects that earn more than the opportunity cost of capital. Define opportunity cost of capital in this case. How this statement relate with shareholder’s decision on investment project.
Image of page 3
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern