- What could a company do with excess cash on the balance sheet?
- What’s the difference between IRR, NPV and Payback?
- What are the impacts on earnings if a company builds a new factory using debt? operating lease? capital lease? cash?
- Why would a company repurchase its own stock? What signals (positive & negative) does this send to the market?
- When would you take a project with a negative NPV?
- What is Sarbanes Oxley and what are the implications?
- Why might a company choose debt over equity financing, or vice versa?
- What are the ways a company can manipulate cash flows?
- What are the primary causes of bankruptcy and what are the options available to a company?
- Let’s say that I have a bond with a 5% coupon. What happens to the market price when the prevailing interest rates rise to 8%? How are the coupons affected?
- Which corporate bond would have a higher coupon, a AAA or a BBB? What are the annual payments received by the owner of a five year zero coupon bond?
- Would you rather have $___ today or $1 a day for the rest of your life? How would you go about valuing this amount?
- What happens to a company’s equity when assets rise $1 million and liabilities fall $2 million?
- What does it mean when cash flow from operations on a company’s cash flow statement is negative? Is this bad news? If so, is it dangerous?
- Suppose that you constructed a pro forma balance sheet for a company and the estimate for external funding required was negative. How would you interpret this result?
- How will a decrease in financial leverage affect a company’s cost of equity capital, if at all? How will it affect a company’s equity beta?
- If you want to assess the health of a company and you could choose between looking at 3 years of income statements or 3 years of balance sheets, which would you choose and why?
- What are some reasons why a company might tap the high yield market?
- Finance managers today face many challenges in governance and reporting as a result of recent legislation and events. Given what you know about these recent news events and legislation, what difficulties do you think finance managers are dealing with today?
Food For Though
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