[Solved] Assignment 2115208

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FI515 homework 1
Subject: Business    / Finance
QuestionMini Case.25in;=””>a.Why is corporate finance important to all managers?.25in;=””>b.Describe the organizational forms a company might have as it evolves from a start-up toa major corporation. List the advantages and disadvantages of each form..25in;=””>c.How do corporations go public and continue to grow?What are agency problems?What is corporate governance?.25in;=””>d.What should be the primary objective of managers?.25in;=””>e.What three aspects of cash flows affect the value of any investment?.25in;=””>f.What are free cash flows?.25in;=””>g.What is the weighted average cost of capital?.25in;=””>h.How do free cash flows and the weighted average cost of capital interact to determine a firm’s value?.25in;=””>i.Who are the providers (savers) and users (borrowers) of capital?.25in;=””>j.What do we call the price that a borrower must pay for debt capital? Interest Rate.5in;=”” 0px=””>What is the priceof equity capital?.5in;=”” 0px=””>What are the four most fundamental factors that affect the cost ofmoney, or the general level of interest rates, in the economy?.25in;=””>k.What are some economic conditions (including international aspects) that affect the cost of money?.25in;=””>l.What are financial securities? Describe some financial instruments…25in;=””>m.List some financial institutions..25in;=””>n.What are some different types of markets?.25in;=””>o.How are secondary markets organized?.25in;=””>·2-6: Statement of Retained Earnings.25in;=”” 0px=”” 1in;=””>oIn its most recent financial statements, Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings were$780 million. How much in dividends was paid to shareholders during the year?.25in;=””>·2-7 Corporate Tax Liability.25in;=”” 0px=”” 1in;=””>oThe Talley Corporation had a taxable income of $365,000 from operations after all operating costs but before (1) interest charges of $50,000, (2) dividends received of $15,000, (3) dividends paid of $25,000, and (4) income taxes..25in;=”” 0px=”” 1.5in;=””>§What are the firm’s income tax liability and its after-tax income?.25in;=”” 0px=”” 1.5in;=””>§What are the company’s marginal and average tax rates on taxable income?.25in;=””>·2-9 Corporate After-Tax Yield (muni, corp, PS).25in;=”” 0px=”” 1in;=””>oThe Shrieves Corporation has $10,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 7.5%, state of Florida muni bonds, which yield 5% (but are not taxable), and AT&T preferred stock, with a dividend yield of 6%. Shrieves’s corporation tax rate is 35%, and 70% of the dividends received are tax exempt. Find the after-tax rates of return on all three securities.

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