Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Suppose an entrepreneur owns a firm which has two production opportunities. Technology A generates an output (net profit) of 10 in state 1, an output of 20 in state 2, and an output of 90 in state 3. All states are equally likely. Technology B generates an output of 40, 50, and 60, respectively. Because of technological constraints, the entrepreneur can only implement one technology. The entrepreneur maximizes his expected utility.
(a) Which technology should the entrepreneur implement and what is the value of the firm?
(b) Suppose the firm has debt with face value 12 outstanding. What project does the entrepreneur implement?
(c) Suppose the firm has debt with face value 50 outstanding. What project does the entrepreneur implement?
(d) Determine the utility of the entrepreneur as a function of face value D for technology A and B, respectively.
(e) What is the maximal debt level such that the entrepreneur still chooses the (socially) efficient technology?
(f) Suppose the firm only has equity and 98% of shares are owned by retailed investors and the initial entrepreneur owns 2% of the firm. What technology does he implement?
Standard ratio analysis should be used to supplement the discussion of strength and weakness. The following ratios are most often used by practitioners: (a) Growth Rates: PEG R
Advantagesand Disadvantages of IRR Advantages of IRR It seems time value of money It seems cash flows over the whole life of the project. It is compatible along
Define the term Public Issues - Floating New Issues Under this method, issuing company directly offers to general public/institutions a fixed number of shares
Functions of Central Depository System or CDS 1. Immobilization of securities that is removal of physical movement of securities. 2. Dematerialization that is removal of ph
Lock-Box System In a lock-box system, the customer sent the payments to a post office box. The post office box is emptied with the firm's bank at minimum once or twice all bus
continous time finaince expert
Different Evaluation Horizons and MBO Different Evaluation Horizons Managers might undertake projects that are profitable in short-run. Shareholders on the other hand evalu
Financial Management On the other hand a financial manager has to meet the company's strategic or long term needs as long term investment are helpful to the company since:
Solutions to the conflict - Relationship between Auditors and Shareholders 1. Firing The auditors may be detached from office at the AGM via the shareholders. 2. Lega
Problem: (a) Describe why a critical analysis of the following is important while reading a research article: (i) The author, (ii) The date of publication. (b) What do
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd