Some important Q&A For chapter 2
1. Explain Greshams Law.
Greshams law refers to the phenomenon that bad (abundant) money drives good (scarce) money
out of circulation. This kind of phenomenon was often observed under the bimetallic standard
under which b
Some important Q&A For chapter 5
1. Give a full definition of the market for foreign exchange.
Broadly defined, the foreign exchange (FX) market encompasses the conversion of purchasing
power from one currency into another, bank deposits of foreign curren
Some important Q&A For chapter 1
1. Why is it important to study international financial management?
We are now living in a world where all the major economic functions, i.e. consumption,
production, and investment, are highly globalized. It is thus essen
International Financial Management is written from the perspective that the fundamental goal
of sound financial management is shareholder wealth maximization.
Shareholder wealth maximization means that the firm makes all business decisions and
Short Definitions for chapter 5
The spot market involves almost the immediate purchase or sale of foreign exchange. Typically,
cash settlement is made two business days (excluding holidays of either the buyer or the seller)
after the transaction for trade
Notes for chapter 4
Corporate governance can be defined as the economic, legal, and institutional framework in
which corporate control and cash flow rights are distributed among shareholders, managers,
and other stakeholders of the company.
The public cor
Some important Q&A For chapter 4
1. The majority of major corporations are franchised as public corporations. Discuss the
key strength and weakness of the public corporation. When do you think the public
corporation as an organizational form is unsuitable
Some important Q&A For chapter 3
1. Define the balance of payments.
The balance of payments (BOP) can be defined as the statistical record of a countrys
international transactions over a certain period of time presented in the form of double-entry
International monetary system, which defines the overall financial environment in which
multinational corporations and international investors operate.
The international monetary system can be defined as the institutional framework within which
Delta State University
Answers in red.
1 a. I= 10, N= 1, PV= (10000), PMT= 0, FV= 11,000.
b. If it pays 5% - I= 5, other amounts remain the same. FV will be $10,500.
If it pays 15 % - I=5, other amounts remain the same. FV wil
a. Spot markets; futures markets
b. Money markets; capital markets
c. Primary markets; secondary markets
d. Private markets; public markets
f. Investment banks (iBanks); commercial banks; financial services corporations
g. Mutual funds; mon
10-1 AFTER-TAX COST OF DEBT The Heuser Companys currently outstanding bonds have a
10% coupon and a 12% yield to maturity. Heuser believes it could issue new bonds at par
that would provide a similar yield to maturity. If its marginal tax rate is 35%, wha
5-1 What is an opportunity cost? How is this concept used in TVM analysis, and where is it
shown on a time line? Is a single number used in all situations? Explain. Opportunity Cost is the
rate of return you could earn on an alternative investment of simi
8-2 PORTFOLIO BETA An individual has $35,000 invested in a stock with a beta of 0 8 and
another $40,000 invested in a stock with a beta of 1 4. If these are the only two investments
in her portfolio, what is her portfolios beta? 1.12
8-3 REQUIRED RATE OF
Business Finance Week 7
7-1 BOND VALUATION Callaghan Motorss bonds have 10 years remaining to maturity.
Interest is paid annually; they have a $1,000 par value; the coupon interest rate is 8%;
and the yield to maturity is 9%. What is the bond
Human Resources Management
1. As Human Resource Manager and based on the policies of the Boy Scouts of America,
how would/could Mr. Slone respond?
He should start by saying something like, That is no longer the case on July 27th
of 2015 the n
MGT 300 Principles of Management
As was announced, class will not meet on Wednesday, October 1st. The following assignments
serves as the class meeting missed. They are to be submitted in class on Wednesday, October 8th.
Your work is to be typed and inclu
Business Finance Week 12
10-14. COST OF PREFERRED STOCK INCLUDING FLOTATION Trivoli Industries plans to issue
perpetual preferred stock with an $11 00 dividend. The stock is currently selling for
$97 00, but flotation costs will be 5% of the market price,
Case 28 Evan Chacon
A. Boudoirs Inc- Preferred Stock (nonconvertible), bank-term loan. I chose this
because the real estate and the inventory are under mortgage no further long-term
debt is recommended and to secure the bank credit line inventory is under
Charles Kimbrell 1
1.) The T- bond return is independent of the state of the economy because government securities
are considered to be free of default risk. Without risk of default, the state of the economy will not
affect the expected return of a
1.) EPS growth rate is 1.17%, .60%, and 5.58%.
Market/book ratio is 1.5, 1.15, .90, and .77.
PE ratio is 12.5, 12.83, 14.65, and 13.3.
As is the case for Georgia Atlantic, operating in a mature market, there are only a few growth
2.) NPV= 36,955.10. NPV is most consistent with the goal of owner wealth maximization. A
projects NPV is the dollar amount of change in the value of the firm as a result of undertaking
the project. A project is deemed acceptable i
1.) A.) The capital structure is how a firm finances its overall operations and growth by using
different sources of funds. Debt comes in the form of bond issues or long-term notes payable,
while equity is classified as common stock, preferred stoc
A. Boudoirs Inc: Leasing arrangement: The company can negotiate for a lease to own
arrangement for the new building with a builder or contractor.
B. Timberland Power & Lights: Long-term bonds: Reasonable norm for long-term debt wi
1.) a.) It is because TECO sells bonds at par and sets the coupon rates at the market rate of
interest when the bonds are issued, interest rates have risen over the last 25 years, and that
explains the rising pattern of coupon rate