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What is meant by "information content," and how does capital market research determine the information content of accounting numbers?
Why does the concept of market efficiency (with respect to information) have no necessary relation to the quality of accounting information? Why is this distinction important with respect to accoun
What is clean surplus accounting? What is its role in linking dividends and abnormal earnings?
The photographic analogy for a balance sheet is a snapshot, and for the income statement and the statement of cash flows it is a motion picture? Explain.
Clint's Stonework Corporation was organized on January 1, 2011. On the basis of the data given, prepare a statement of retained earnings for 2012. Show computations.
Comment on the following statement: The residual income model is no different from the dividend discount model. Therefore, it has no value to investors and analysts.
What are some advantages and disadvantages of using residual income (including economic profit and EVA) for performance measurement?
What is residual income? Abnormal earnings? Economic profit? EVA?
Why do we sometimes say that the dividend discount model is actually an earnings model? How do Lintner's findings relate dividends and earnings?
Besides the primary investor-creditor group, what other user groups could claim to be stakeholders in the firm? How might their information needs be the same as the primary investor-creditor group?
In what ways do you think information useful for investors (in assessing future cash flows) differs from that useful for creditors (in assessing default risk)?
Why is property development more vulnerable to business cycle risk than investment in existing property of similar type?
Explain the possible advantages of miniperm financing as opposed to traditional construction financing followed by "permanent" financing.
Compare the advantages of competitive bidding for a general contractor with negotiated cost plus fee. What is the argument for using a maximum cost with sharing of overruns or savings between devel
In selecting an architect, what must a developer consider about the architect besides design credentials and relevant experience?
On January 1, 2007 Charles Jamison borrows $40,000 from his father to open a business. What are the annual payments?
List at least five ways that a developer may attempt to reduce the risks of the permitting process.
Why is the permitting stage of development often the riskiest stage of the process?
You are considering the purchase of an apartment complex. The following assumptions are made:
On June 30 Heckle signed a bank loan for €400,000, bearing interest at 8% per year and paab1e in full on June 30, 2011. Prepare, in good format. Heckle's balance sheet as of June 30. 2008.
The before-tax cash flow from the sale of the property is expected to be $295,050. What is the net present value of this investment, assuming a 12 percent required rate of return on levered cash flo
If the before-tax equity reversion after four years equals $90,000, and an initial equity investment of $175,000 is required, what is the IRR on the project? If the required going-in levered rate of
At the time of purchase, the property is financed with a 75 percent loan-to-value ratio for 30 years at 8 percent (annual) with monthly amortization. At the end of year 4, the property is sold with
An analyst calculates an equity cost of capital for the firm of 7.9 percent using the capital asset pricing model (CAPM). 'What market risk premium is she assuming?
List three important ways in which DCF valuation models differ from direct capitalization models.