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What might the tax authorities of a country do if a corporation is viewed as a thin capitalization company?
What is meant by a completely integrated world capital market and what are the implications of such a market for raising funds?
What is the major difference between an American depositary receipt and an American depositary share?
Many firms use a higher cost of capital for investments abroad. Explain why this may be appropriate.
The manager has calculated that the all-in-cost of funds for a bond issued in the United States is 8.25% and 8.35% in the Eurobond market.
Discuss-Enterprise Oil's financing strategy and rationale for the purchase of the currency options.
Why is it not likely that corporations with a triple A rating will issue asset-backed securities for the sole purpose of reducing their funding costs?
The finance company can issue an asset-backed security in which it pays 5.7%. What is the net interest spread?
Why should the investor in an asset-backed security be concerned with the underwriting standards of the loan originator?
The investment banker, however, felt that there could be other advantages of issuing an asset-backed security.
What are the obligations that must be paid by the issuer of an asset backed security?
Why doesn't an issuer of an asset-backed security seek the highest credit rating of triple A?
Explain how a lessor expects to recover its investment in a full payout lease.
Estimate the effect that the change in the credit policy would have on monthly sales and accounts receivable.
Distinguish between maturity factoring and conventional factoring of accounts receivable.
Calculate the cost of trade credit to your customers for each of the following credit terms.
If the balance in accounts receivable at the end of 1991 was $750 million, how long did it take AR's customers to pay?
Compare COMP's credit terms with its competitors'. Which has a higher implicit cost to the customer?
If sales are expected to increase to $2 million per year when this discount is instituted and if 30% of its customers are predicted to take advantage .
This change will decrease its days of credit from 20 to 15 days. UO's opportunity cost for its accounts receivable investment is 15% before taxes.
If Hurricane Company orders 20,000 units each time it places an order, what are the holding costs of inventory per month?
What is the effective annual rate for Paul's customers before the change if they pay on the net day?
If I. Krueger changes the discount rate from 2% to 3% and changes the discount period from five to three days, what would be the effective interest rate .
If the loan amounts and the loan periods are the same for both loans, which loan has a higher effective cost of financing? Why?
A discount loan that has a discount of 10% and a single payment loan with no interest but an origination fee of 10%.