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Problem: AIG was effectively the largest unfunded investor in the super-senior tranches of the Abacus 2004 deal.
Goldman Sachs lost billions of dollars in arranging, underrating, selling and trading synthetic CDOs between 2004 and 2007.
Support the mortgage market. They did not originate mortgages; they purchased them from banks, thrifts, and mortgage companies
Securitization of mortgages enabled various dimensions of risks embedded in pools of mortgages to be distributed to investors with varying degrees of tolerance
What is the value of a share of preferred stock that pays a $4.50 dividend? (assume k is 10%)
Calculate the DOL. Calculate the DFL. Determine the DCL If sales increased by 20% determine the change in EBIT and the change in EPS.
Define EBIT and discuss why the optimal level of leverage from a tax-saving perspective is the level at which interest equals EBIT.
Total amount of revenue that could be lost if the engraver breaks
A. What are the net cash flows from operating activities for the period? B. What are the net cash flows from investing activities for the period?
Imagine a startup company of your own and briefly trace its development from a sole proprietorship to a major corporation with focus
The three components involved in the creation of a budget are revenues, expenses, and the statistics (volume).
Example of a business activity from your profession that may change the amount of variable expenses with each definition.
Discuss your understanding of WACC and explain how the individual cost of each capital component (equity, preference and debt capital) can be calculated.
What is the best pizza deal in your area? How do you conduct comparative shopping when different pizza stores have different size pans?
How much of the firm's value is accounted for by the debt-generated tax shield?
What would be the amount of net exports of goods and services?
Discuss why the comparison of investment alternatives is difficult when each alternative is useful, even outside of the project.
He wants to repay it in five equal instalments over five years, with the first repayment one year after he takes out the loan.How much should each repayment be?
Spill Oil Company's stocks had -8%, 11% and 24% rates of return during the last three years respectively; calculate the average rate of return for the stock.
AIG played a central role in the financial crisis by issuing swaps to investors in CDO tranches
By how much did the firm's net income exceed its free cash flow?
Discuss which elements of which financial statements you would want to carefully examine. Explain your rationale.
1. Explain the purpose and objective of accounting. 2. What is the purpose of corporate governance, and why is it important to the company?
If there were 10,000 people in the district, what percent of the population voted in the election?
Do you think finance departments are the best place to train future CEO's? Provide two actual examples of CFO's of publicly-traded companies