Corporate Investment and Financing

1. ; You call your broker and ask her to buy 100 shares of Walmart “at the market”. ; When this purchase is made who receives the actual money from the purchase?

3. ; If we know the current price is $40 dollars, the expected dividend is $4, the expected growth is 5%, how could we calculate the required return implied from this information?

5. ; How are earnings per share, dividends, and growth opportunities related?

6. ; To be a value increasing growth opportunity the return on the project must be higher than what?

7. ; What is the plowback ratio and what is the number (1- the plowback ratio) called?

8. ; What cash flow should you discount when discounting cash flow back to present to value a business? ; Sales, profits, or free cash flows? ; Why?

2. ; When you take book income divided by average book value of the asset, what are you calculating?

3. ; What does the payback method measure?

5. ; What does the internal rate of return measure?

8. ; What is the difference between soft rationing and hard rationing?

9. ; What is the difference between internal rate of return and opportunity cost of capital?

10. ; What does it mean to say that two projects are mutually exclusive? ;

*********** DO NOT NEED TO BE LONG ANSWERS