MC – Seller of Forward Contract
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
What does the seller of a forward contract agree to do?
What does the seller of a forward contract agree to do?
Given the annual lease payments and the tax rate, determine the annual tax shield from the lease payments.
Your numbers will vary.
Concept only: The value of a bond = ______ – ___________. You are given asset value, call option on assets, default-free bond, and value of put option on assets. What are words that would fit into the above?
We can think of the value of a corporate bond as Bond value without default +/- ______.
Determine the value of a futures contract on the Standard and Poor’s Index given the current level of the index, the dividend yield, and the risk-free rate.
Your numbers will vary.
What could be a reason for a corporation to experience agency costs?
Who are considered claimants to a firm’s income stream?
Who typically owns a corporation?
What are the costs associated with conflicts of interest between managers and shareholders in a corporation?
What are the disadvantages of the corporate form?