Unit 6 Topic 1
How does a firms capital structure relate to your personal capital structure? In what ways are they
similar? Provide examples of how you use debt and equity in your personal financial life that parallels
the basic capital structure decision
Problem 9-10, page 389
The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 7% per
year in the future. Shelbys common stock sells for $23 per share, its last dividend was
$2.00, and the company will pay a dividend of $2.14 at th
Problem 12-1, page 514
Broussard Skateboards sales are expected to increase by 15% from $8 million in 2013 to
$9.2 million in 2014. Its assets totaled $5 million at the end of 2013. Broussard is already
at full capacity, so its assets must grow at the sam
Problem 25-1, page 1005
Define the following terms, using graphs or equations to illustrate your answers wherever
A. Portfolios; feasible set; efficient portfolio; efficient frontier
A portfolio is a range of investments in which a person or org
a. Using the financial statements shown below, calculate net operating working capital, total net
operating capital, net operating profit after taxes, free cash flow, and return on invested capital for
the most recent year
Problem 2-8, page 86
The Wendt Corporation had $10.5 million of taxable income.
a) What is the companys federal income tax bill for the year?
Wendts federal income tax bill for the year would be $3,575,000.
According to the Corporate Tax Rates as of Janua
1. Why is corporate finance important to all managers?
Corporate finance is important to all managers because it affects every decision making
within the company. As managers make decisions, they have to be able to implement and
explain their decisions an
Problem 5-2, page 226
Wilson Wonders bonds have 12 years remaining to maturity. Interest is paid annually, the
bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at a
price of $850. What is the yield to maturity?
Table of Contents
Capital Structure Issues .2
Business and Financial Risks 2
Modigliani and Millers Capital Structure Theory 3
Modigliani and Millers Theory Criticisms .3
Capital Structure Evidence 4
Nikes Optimal Capital Struc
Unit 5 Topic 1
From a financial manager's perspective, discuss the capital-budgeting process used to identify projects that add
to the firm's value? How do capital-budgeting decisions help to define a firm's strategic direction?
Capital budgeting is the p
Unit 4 Topic 1
Research and define Capital Asset Pricing Model (CAPM) and Arbitrage Pricing Theory (APT). How are they the
same and how are they different?
Capital Asset Pricing Model (CAPM) specifies the relationship between risk and required rates of re
Unit 3 Topic 1
Discuss the relationship between the price of a bond and interest rates. Why does the price of a bond change
over its lifetime? Please offer a quantitative example to demonstrate this relationship.
The price of a bond and interest rate have
Unit 1 Topic 1
What is the meaning of share value maximization? If a firm attempts to maximize its fundamental stock price, is
this good or bad for society? Explain.
Share value maximization refers to increasing the value of a common stock held by a share
Unit 2 Topic 1
Please read the Harvard Case Study - eBay Inc.: Internet Success or Fairy Tale? by David F. Hawkins and Jacob
Cohen. This case study can be found in the Harvard Case Study link in your Syllabus.
This will take you to an Authorized Student r