Business Finance Homework Help

1. Explain why the required rate of return on a firm’s assets must be equal to the weighted average cost of capital associated with its liabilities and equity.

2. Which is easier to calculate directly, the expected rate of return on the assets of a firm or the expected rate of return on the firm’s debt and equity? Assume that you are an outsider to the firm.

3. What factors must a financial manager consider when making decisions about accounts receivable?

4. List some of the working capital management practices you would expect to see in a manufacturing company following just-in-time inventory practices.

5. Define underpricing, and explain why the majority of IPOs are underpriced. What role do investment banks play in the price-setting process?