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- Short Q/Ans: Answer shortly by just giving reasons Q: Indirect transfer through investment bankers is a major flow of funds in a financial market.Explain it? Q: Bonds are considered as less riskier instrument as compared to debentures. Being a rational investor do you support this statement or not? Provide logical arguments to support your verdictQuestion 4 b) (b) LA Sdn Bhd wish to raise additional fund in the share market, advise this companyregarding the types of underwriting available in the market. answer should be written with proper examples and elaborations. thank you.1. What is the differences between restricted and unrestricted investment account? (A) Right to commingle funds (B) Right to share profits (C) Right to guarantee returns (D) Right to additional equity shares
- 2) Capital raising involves a firm’s decision in ____________________. Group of answer choices a) All of the above. b) using long-term debt c) using common shares d) using short-term debtPlease answer in CAPITAL LETTER IF IT IS AN INFLOW(I )OR AN OUTFLOW (O)COLUMN 1 , AND COLUMN 2 , IF IT CORRESPONDS TO OPERATINGCASHFLOW(OC),INVESTMENT ACTIVITY CASHFLOW(IC), FINANCING ACTIVITY CASHFLOW ( FC)Example: Reduce marketable securities : I OC ( "I" or "O") AND ("OC", "IC" o "FC" )Activity INFLOW " I" orOutflow "O" OPERATINGCASHFLOW(OC), INVESTMENTACTIVITY CASHFLOW(IC), FINANCINGACTIVITY CASHFLOW ( FC) 1. Purchase of treasurystock2. Purchase of availablefor sale investment 3. Sale of equipment at aloss 4. Increase in accountspayable 5. Retirement of bonds 6. Issuance of bonds 7. Decrease in accountspayable 8. Increase in inventory9. Loan from bank bysigning a note 10. Increase in accountsreceivable 11. Purchase of equipmentby issuing a note 12. Purchase of land andbuilding. 13. Decrease in accountsreceivable.14. Payment of dividends. 15.…Which of the following statements regarding close-end investment companies, if any, is correct?1. Close-end funds continually create new shares as new monies are obtained.2. Close-end funds offer price guarantees a. 1 only.b. 2 only.c. Both 1 and 2.d. Neither 1 nor 2.
- q15 Which type of brokerage account permits the broker to buy and sell shares for the investor without first contacting the investor for approval? a. Discretionary Account b. All the options are wrong c. Margin Account d. Cash Management Account q16 Buying assets that yield a return greater than the minimum acceptable hurdle rate is a part of which core principles of Finance. a. Cost principle b. Investment principle c. Dividend principle d. Financing principleList one (1) advantage and one (1) disadvantage of using the NPV method in evaluating business investmentsUSING PAST INFORMATION TO ESTIMATE REQUIRED RETURNS Use online resources to work on this chapters questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions. Chapter 8 discussed the basic trade-off between risk and return. In the capital asset pricing model (CAPM) discussion, beta was identified as the correct measure of risk for diversified shareholders. Recall that beta measures the extent to which the returns of a given stock move with the stock market. When using the CAPM to estimate required returns, we would like to know how the stock will move with the market in the future, but because we dont have a crystal ball, we generally use historical data to estimate this relationship with beta. As mentioned in Web Appendix 8A, beta can be estimated by regressing the individual stocks returns against the returns of the overall market. As an alternative to running our own regressions, we can rely on reported betas from a variety of sources. These published sources make it easy for us to readily obtain beta estimates for most large publicly traded corporations. However, a word of caution is in order. Beta estimates can often be quite sensitive to the time period in which the data are estimated, the market index used, and the frequency of the data used. Therefore, it is not uncommon to find a wide range of beta estimates among the various Internet websites. On the summary screen, you should see an interactive chart. Typically, you can chart performance over the last 24 hours, 1 month, 6 monthsup to 5 years, or even longer. Select different time periods and watch how the graph changes. On this screen you should also see a menu to select historical prices (historical data). Some websites will not only show daily activity but also weekly or monthly activity In addition, some websites will allow you to download the data into an Excel spreadsheet.
- Q2. What is the different between right issue and private placements? What is included in underwriting expenses? Q3. When do dividends become legal debt of the company? – Explain. Why preference share dividend is cumulative?7 Determining how a firm should raise money to fund its long-term investments is referred to as capital structure decisions. Select one: True FalseCH6 # 1 The ABC Company has a stable dividend policy ($2 per share per year). It also has a policy of not raising new capital from the market. The policy is to invest the available funds after payment of the dividends (excess cash is invested in marketable securities). What does this imply about the use of the present value method of making investment decisions?
