Problem 1: Identify and describe at least two methods that a company can use to provide a dividend to stockholders. Under what circumstances would each of these methods most likely be used?
Problem 2: Explain the differences between the US and other countries with respect how firms are structured (capital structure)? Why do these differences exist?
Problem 3: Explain the difference between a capital expenditure and an operating expenditure. Provide an example of each.
Problem 4: Define the following terms:
- Sunk Cost
- Opportunity Cost
- Net Present Value
- Internal Rate of Return
- Payback Period
- Capital Rationing
Problem 5: Explain the difference between independent and mutually exclusive projects and provide an example of each.
Problem 6: Explain the difference between an Operating Lease and a Financial Lease.
Problem 7: Please identify at least 3 advantages and 3 disadvantages to leasing.
Problem 8: Explain the difference between common and preferred stock.
Problem 9: Explain the difference between a stock split and a stock repurchase.