Fin 515 Week 1 Homework

Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.

b) Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.

b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.

9. What is the Cost of Debt, before and after taxes? Using the interest rate for the largest debt…cannot use the weighted interest rate for the debt since it includes capital lease obligations with no stated rate and could not find in the notes to the financials. 5.4% After tax cost is .054 x (1-.36) = 3.5%

1. This is a closed book exam. You may only have pens, pencils and a calculator at

* b.Assume the firm’s stock now sells for $20 per share. The company wants to sell some 20-year, $1,000 par value bonds with interest paid annually. Each bond will have attached 50 warrants, each exercisable into 1 share of stock at an exercise price of $25. The firm’s straight bonds yield 12%. Assume that each warrant will have a market value of $3 when the stock sells at $20. What coupon interest rate, and dollar coupon, must the company set on the bonds with warrants if they are to clear the market? (Hint: The convertible bond should have an initial price of $1,000.)

8. What are the pros and cons of each key organizational structure? Which do you think would be the best fit for you? Explain your answer.

The financial crisis from2007 to 2008 is considered the worst financial crisis since the Great Depression of the 1920s and destroyed the U.S. economy severely. It led the housing prices fell 31.8%, the unemployment rate rose a peak of 10% in the United States. Especially the subprime market, began defaulting on their mortgage. Housing industry had collapsed. This crisis was not an accident, it caused by varies of factors. The unregulated securitization system, the US government deregulation, poor monetary policies, the irresponsibility of 3 rating agencies, the massed shadow banking system and so on. From my view, the unregulated private label mortgages securitization is the main contribute factor which led the global financial crisis in 2008.

Firms must consider many strategies when attempting to realize growth. Depending upon the stage of

Stages of business growth theories see the development of an organization as a process with several stages and try to understand the features of different stages and the accompanying problems. All the models try to solve the following three big questions: How to mark the stages of business growth? How many stages the business experiences in its development? What are

(TCO C) Debt securities sold to investors that must be repaid at a particular date some years in the future are called:

Sonja is seriously injured in an auto accident. After six months, she is still unable to return to work. She has no income from her job, and the insurance premium payments are financially burdensome. In this case Sonja has an ordinary life insurance with the waiver-of-premium attached so after six months all premiums would be waived if Sonja is totally disabled. Under some policies, a retroactive refund of the premium paid during the first six months would be paid. (Rejda, George, McNamara, 2014).

At 8 percent interest, how long does it take to double your money? To quadruple it?

Compared to E-Tendering, E-Reverse Auction is another form of E-procurement tool that allows the purchasing company to use internet technology to purchase products and services that either have the lowest price or a combination of low price and other important conditions such as the quality of the products and services (Knudsen, 2003). Diagram 1.3. provides a snapshot of the comparison between different forms of auctioning.

Corporate finance, as a specialized branch of Finance deals mainly with making three crucial decisions by the firm. They are: