Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Basic Finance Expert

Instructions:

1. CEOs like to hide bad information from the financial market, what's the consequence? What can be done to prevent this?

2. What are the major differences between common stock and preferred stock?

3. Give three main reasons that a private firm wants to issue equity (IPO); give two main reasons that a public firm wants to go private.

4. Why securitization is common in highly developed financial market?

5. Assume that only the following three stocks exist in the financial market, calculate the price-weighted index, value-weighted index, and equal-weighted index. Assume initial index as 100.

Stock Name Initial Price   End Price  Share (Thousands)
A 50 80 5
B 60 40 2
C 20 12 20

Index Initial Value End Value
Price-Weighted 100
Value Weighted 100
Equal-Weighted 100

6. You are buying a put option of GM at a strike price of $75 and maturity of 1 months. The current trading price is $75. The price of the option is $2. What would be the major motive to buy the put option? What is the maximum loss for the investment? What is the maximum gain?

7. What's the benefit of buying on margin? If the initial margin is 50%, maintenance margin is 40%, when will you receive a margin call for the stock you bought at $50/share at margin?

8. Corporate governance is believed to promote long term goal of the firm. As such, investing in firms with good corporate governance has been proved to be profitable. Give two other aspects of "good firm", which you believe are associated with higher value / stock return in the long run.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91418718
  • Price:- $60

Priced at Now at $60, Verified Solution

Have any Question?


Related Questions in Basic Finance

Dia lucrii inc has 325000 shares of cumulative preferred

Dia Lucrii, Inc. has 325,000 shares of cumulative preferred stock outstanding. The stock is supposed to pay $2.18 in dividends per share each quarter. Due to an unexpected event, the company has missed the last two quart ...

What are the ways that it can help comply with legal

What are the ways that IT can help comply with legal requirements and social responsibilities surrounding the sales of alcohol?

Discuss two types of costs amp two types of

Discuss two types of costs & two types of benefits(excluding tax shield and EPS) that would potentially arise from the leveraged recapitalization (a firm proposed a leveraged recapitalization which could create immediate ...

Question during 2014 its first year of operations as a

Question: During 2014, its first year of operations as a delivery service, Loonie Corp. entered into the following transactions. 1. Issued shares of common stock to investors in exchange for $80,000 in cash. 2. Borrowed ...

Briefly summarize the partnership business structure and

Briefly summarize the partnership business structure and the equity rights partners have, both in the context of managerial rights and ownership.

What is the standard hedge fund hf compensation structure

What is the standard hedge fund (HF) compensation structure and how do high watermark provision benefit or impose costs on HF investors?

You place a commercial building into service on feb 1st

You place a commercial building into service on Feb 1st, 2017 costing $42,300,000. What is the depreciation expense allowed by the IRS for this building for tax years 2017? and 2018?

How to find the amount of us dollars needed to purchase 1

How to find the amount of US dollars needed to purchase 1 swiss franc if the exchange rate is 0.9897 Swiss francs per U.S. dollar A trip to Japan is estimated to cost$606. How many yen do you need to buy if the exchange ...

Question - what is weighted average cost of capital how is

Question - What is weighted average cost of capital, how is it used, and when is it not appropriate to use? A substantial initial response consisting of a minimum of 100 words, using proper grammar, spelling, and punctua ...

What is assumptions underlying single index model and why

What is assumptions underlying Single index model and why use thoes assumptions? Compare assumptions of Single Index Model with other formula?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As