Mini Case #2
Suppose you meet with some of your undergraduate classmates and inform them that you are taking a graduate course in corporate finance. After telling them that they show interest and ask you the following questions that you must clearly and in short answer.
1) What is the real interest rate (risk free)? What is the nominal interest rate (risk free)? In what sense they differ and how these two are measured?
2) Briefly explain the concepts of total risk and market risk
3) Does the expected rate of return on a portfolio of shares depend on the percentage of portfolio invested in each share? What about the riskiness of the entire portfolio?
4) What is the Capital Asset Pricing Model (CAPM)? What are the assumptions underlying the model?
5) Financial Mgrs are more concerned with investment decisions relating to real assets, such as PP&E than with investment in financial assets, such as securities. Do you consider being any difference? How this statement does relates to real asset investment decisions especially corporate budgeting decisions?
6) Why are discounted cash flow (time value of money) concepts so important to corporate financial analysis?
7) What are the four steps in a DCF analysis? 8) How is the value of an asset determined? (hint: assume value is related on expected
future cash flows) 9) What is the opportunity cost concept?
10) What s a perfect capital market? How is the concept of perfect capital markets used in finance theory?
11) What are the key features of a bond?
12) What is the Efficient Markets Hypothesis (EMH) and what are its three forms?
13) What are the key features of a common share or stock and how differ from preferred stocks?
14) What is meant by the term project s NPV? What is the rationale behind the NPV method? According to NPV which projects should be accepted if they qualify as independent? Mutually exclusive?
15) What is capital budgeting and what does the term Risk mean in the context of capital budgeting process?
16) What are the three types of risk relevant to capital budgeting and how is each of these risk types measured and related to each other?
17) Are there subjective risk factors that should be considered before the final decision is made?
I need you to answer for me those questions briefly..
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more