Finance

Our Finance Solution Library Page contains so numerous questions, essay, problems and case studies that help in developing an in-depth knowledge on the subject.

Put it simply, finance deals with application of financial, economic and accounting principles which help in maximizing wealth and overall value of an organization. In fact, maximizing the wealth is regarded as one of the primary objectives of an organization. The value of a firm can be measured by the market price of shares of the company. Many a times, the higher the share value, the better the company’s performance, financially.

Capital Structure: In order that a company performs better financially, it must have a good capital structure. Capital structure is the way in which a corporation buys its assets by combining equity share capital and debt. While equity share capital belongs to shareholders, debt is provided by a third party. Our solution library has various questions, problems and case studies on capital structure, which make it easier for you to understand the concept thoroughly, both theoretically and practically.

Working Capital Management: Working capital management is a short term financial activity which is used for running the day to day activities of the firm. It is the difference between current assets and current liabilities. There are several problems and scenario analysis questions on working capital in our solution library dealing with working capital management.

Time value of money: Time value of money plays a crucial role in finance. Time value of money gives rise to various concepts such as present value (PV), future value (FV), net present value (NPV), internal rate of return (IRR), profitability index (PI), etc. Each of these concepts help in calculating the earning capacity or potential for money invested. In other words, one make a benchmark for earning capacity or rate of return for an investment by using the time value of money. Several problems, short answer questions, essays, cases and scenarios have been covered under time value of money in our Finance Solution Library page.

Financial Statement Analysis: Financial statements of a firm include income statement, balance sheet and cash flow statement. Each of these statements provide accounting and financial information which is used to arrive at the financial position of the firm with the help of certain tools and benchmarking techniques. Ratio analysis is one such practice used to know the financial position of a firm. Our solution library has several essays, problems, scenarios and cases on financial statement analysis which offer a comprehensive understanding of the topic.

Derivatives: Derivatives are financial instruments which are calculated by an underlying asset. These can be stock and commodities, government bonds, etc. The questions and problems covering derivatives in our solution library range from Options and Futures, Forwards, Swaps, Currency options and Futures, Hedging Strategies, etc.

Mergers and Acquisitions: Mergers and acquisitions play a major role not just in corporate strategy but also financially. Merger is merging two or more companies into one and acquisition is one company acquiring one or more companies and making them its own. Various questions and problems under merger and acquisitions can be found in our finance solution library.

Problems and case studies in finance: Our Finance Solution Library contains several problems and case studies which deal with topics mentioned above and more.

 

Calculate Z Score With Altman’s Discrimant Function For A Firm

QuestionSuppose that the financial ratios of a potential borrowing firm took the following values:X1 = 0.3X2 = 0X3 = –0.30X4 = 0.15X5 = 2.1Altman’s discriminant functio...

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Calculation Of Internal Rate Of Return External Rate Of Return And Shortest Duration For Project Of A Project

Question Your company intends to establish a division in Halifax to be engaged in computer software development for the pharmaceutical industry The estimated yearly costs of the P...

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Calculation Of Internal Rate Of Return, External Rate Of Return Of A Project

Question The estimated values of the yearly ATCF (after tax cash flows) of a Project are given in the Table below. The duration of the Project is six years. The initial cost of th...

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Calculation Of Intrinsic Values Of Stocks

QuestionA person is considering buying the stock of two home health companies that are similar in all respects except the proportion of earnings paid out as dividends. Both compani...

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Calculating Cost of Equity from Retained Earnings

Question Suppose your company’s beta is 0.85, the risk free rate is 4.5% while the market return is 12%. What is the cost of equity from retained earnings based on the CAPM?...

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Calculating Cost of New Common Stock Based on Flotation Expenses

Question A company will issue new common stock to finance an expansion. The existing common stock just paid a $1.50 dividend, and dividends are expected to grow at a constant rate...

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Calculating Cost of New Equity based on DCF Approach

Question You have been provided with the following data: D1 = $1.30; P0 = $42.50; and g = 7.00% (constant). What is the cost of equity from retained earnings based on the DCF appr...

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Calculation Of Investment With Interest Rate And Interest Payment Given

Question Suppose you are offered an investment which will pay off €250 in six months. The required interest rate for an investment of this risk is 5.7% per annum compounded a...

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Calculating Cost of Preferred Stock for Company

Question A Company’s perpetual preferred stock sells for $102.50 per share, and it pays a $9.50 annual dividend. If the company were to sell a new preferred issue, it would ...

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Calculation of IRR for Techno-Corp’s' project-Multiple Choice Question

Question Techno-Corp has come up with a new medical instrument. Development will take Techno-Corp four years and cost $250,000 per year, with the first of the four equal investmen...

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Calculating Estimated Return on Investment for New High-tech Machinery

Question A corporation adds to its fixed assets by investing $60 million in new high tech machinery. It expects to increase its annual net profits by $11 million in each of the ne...

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Calculating Financial Ratios and Capital Budgeting

Question 1.    Explain why buying common stocks based on each of the following financial ratios would or would not be a good investment strategy:  (a) a low pr...

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