Questions tagged [corporate-finance]

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Data - Top 100 global economic entities

Around 2016-2017 there was a dataset put together by NGO Global Justice Now listing the top 100 economic entities (including privately owned corporations as well as sovereign countries in the same ...
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What is the economic interpretation of negative tangible assets for a company?

There are a lot of companies such as: https://finance.yahoo.com/quote/LMT/balance-sheet?p=LMT with negative tangible assets and negative tangible book value per share, where tangible assets can be ...
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Shareholder oppression, venture "growth at all costs", and bubbles

Are "lifestyle businesses" more substantially likely to remain closely held corporations and commit shareholder oppression (business judgment rule)? If so, does this have a substantial ...
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What is the market capitalisation of the crypto exchange Binance?

Cryptocurrency exchange FTX has raised USD 400 million in a Series C fundraise, helping bump up the company's valuation to $32 billion (1 Feb 2022). What is Binance company valuation? Not BNB market ...
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Need help with numerical implementation of a model

I am toying around with a capital structure model that looks as follows: $\sup_{D_{t}(A_{t}),K_{t}}\int_{B_{L}}^{B_{H}}(1-\kappa_{t})\pi(t,A_{t},K_{t},B_{t})g_{t}(B_{t})dB_{t}+\kappa_{t}D_{t}(A_{t})[1-...
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Can seasoned/secondary equity offering impact the stock price to the upside?

A secondary equity offering is one way among others to raise equity capital. Intuitively, this should have a dilutive impact on existing shareholders, but not always. When does this operation impact ...
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What does it mean by the statement "a corporation looses money if it produces more than its value"

Recently I was reading a book on corporate finance titled "corporate finance for dummies". Here in the introduction page the author has given a definition for corporate finance, followed by ...
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Who are the largest customers of the Vanguard group?

According to Wikipedia, Vanguard is owned by its customers. Is there a list available of the largest customers of the Vanguard group?
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Connection assets under management and net worth

Could you help me to understand the connection between assets under management and net worth? In my understanding, if a corporation has $X$ dollars Assets Under Management, and if a shareholder owns $...
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Probit and DiD - Finance

I have been working on a project for a good long time. I am relatively new to finance and regressions in R, so I would be extremely grateful for every response I get. My goal with this task is to ...
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Calculating IT Spend Ratio

I have three columns - Sales(Revenue), Employee Count and Industry of n Companies in my sheet, how do I use them to calculate the IT Spend Ratio of these companies using the above info?
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Corporate Finance introduction and mentoring for Non-Finance - topics to focus on?

I work for an international engineering company and have been in an engineering position for 10+ years. As part of the career development I have expressed interest to learn more about the finance side ...
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Why is having a big corporation keep its money in foreign countries a bad thing in the public's eye?

I have been trying to dig deeper into corporate tax evasion, and how it works, to really determine if they're doing something bad or what. I don't know much about economics or politics, but I hear ...
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Is the yield on high coupon-bonds more likely to be higher than on low-coupon bonds when the term structure is upward or downward sloping?

Currently I'm learning about the principles of corporate finance. More specifically I'm learning about valuing bonds. I have the follow question: Is the yield on high coupon-bonds more likely to be ...
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Dupont Analysis

I'm having quite a bit of confusion regarding the Dupont analysis formula particularly the asset turnover ratio. Should the asset turnover ratio be calculated using total asset or average asset? My ...
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Shouldn't big tech want to split up?

This is a reference request. Where can I find an analysis that explains why companies like Microsoft and Amazon don't split into two. At a certain point diseconomies of scale would kick in. I would ...
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Calculating Tobin's q from the financial statements of publicly listed companies

I'm interested in doing some empirical analysis of firm's investment behavior using financial statements (such as asset, working capital, operating cost, etc). One variable I want to manually ...
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where can I download financial statements (or financial data) for firms in many industries in one shot?

I'm interested in doing some empirical analysis of firm's financial statements (such as asset, working capital, operating cost, etc) for many firms across industries over the past few years. Where can ...
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Is there any reference for labour finance?

Is there any recent reference for labour finance, in which labour finance relating to financial statements? And what are the alternative name for "labour finance"?
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How to justify the treatment and control groups for Difference-In-Difference with staggered implementation of laws?

A. Background: Dong, 2019 and Dasgupta, 2019 used the same way to generate the treatment and control groups because they all learn about the impact of the same laws on different dependent variables. I ...
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Shouldn't corporate tax be calculated based on EBIT instead of EBT?

When I was studying Corporate Finance in university, I was surprised to learn that it is more advantageous for corporations to take more debt (even if they don't need to) because it creates tax shield ...
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Bankruptcy Vs default

If a company files for bankruptcy, how come its stock still trades ? E.g. On June 17, Wirecard was valued at more than $14 billion. Eight days later, it filed for the German equivalent of bankruptcy. ...
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Would the market stabilize if companies paid taxes on revenue instead of gross income?

Note: there is a closed question that is similar (https://money.stackexchange.com/questions/126677/paying-taxes-revenue-vs-taxes-profit) but the response offers a perspective that I would like to ...
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Why might it make sense to buy bonds in a company facing restructuring?

In this video, Sal Khan states, "If you really thought that Lehman Brothers in the long term was going to come back, what you might want to do is somehow try to become one of its bondholders, and ...
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Where to learn financial modelling concepts and skills?

I'm looking to learn more about the financial analysis of a business. Things like unit economics calculation, income statement, free cash flow analysis, a valuation calculation, etc. Can you recommend ...
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Does development aid, negatively effect the development of developing countries?

Development aid Development aid or development cooperation (also development assistance, technical assistance, international aid, overseas aid, official development assistance (ODA), or foreign aid) ...
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Why is the ECB asking EU banks to hold off on buybacks?

In the wake of the Covid-19 pandemic, the ECB requested EU banks not to pay dividends as well as refraining from buying back their own shares until the end of 2020. And that even if they had already ...
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Why is a company allowed to change the number of shares it’s divided into after its IPO?

I read that even after an IPO, a company can change the number of shares that it’s divided into based on a board vote. What’s to prevent them from arbitrarily increasing the number of shares to raise ...
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What does Eugene Fama mean "the amount of debt that's financed with equity isn't put aside"?

I transcribed A Symposium with 2013 American Nobel Laureates at Embassy of Sweden, Washington - YouTube starting at 56:00. The moderator, AAAS CEO Alan Leshner, claims Locking up that kind of money ...
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Why is it relevant for a company to use dividends to incentivize shareholders to maintain ownership of the company's stocks?

I was reading the definition of "Bottom Line" on Investopedia and one of the reasons companies increase their bottom-line is to issue payments (dividends) to stockholders as an incentive to ...
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2 votes
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Who holds the Reverse Repo and Repo respectively in a Repurchase Agreement?

According to investopedia.com in this definition A reverse repurchase agreement, or "reverse repo", is the purchase of securities with the agreement to sell ...
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Risk neutral probability for each of 3 states

I need help to find the risk-neutral probability for states 1,2 and 3 I have two stocks: A and B. The price of A today is 180 and in a year it will be worth 288 (S1), 180 (S2) or 120 (S3); The ...
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Economic Profit and the Return on Invested Capital

In my finance classes, I always learned that the a firm earning an "economic profit" is one for which its return on invested capital (ROIC) is greater than it's opportunity cost of capital (usually ...
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Financial Economics and Corporate Finance

In pg 4 of Principles of Corporate finance (Allen et al, 2017), in the context of explaining financing decisions are less important that investment decisions, there is a line that says: "Financial ...
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Why was the Glass-Steagall Legislation enacted?

I realize that the part of the reason the Glass-Steagall act was enacted was to ensure that banks do not invest customer's deposits into risky securities, but what was the rationale for separating ...
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Best way to measure company size relative to world GDP

I'm working o a model where corporate revenue / world GDP is a dependent variable of some stuff (based on the model proposed in this paper: http://www.scielo.br/scielo.php?pid=S1807-76922009000200002&...
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Corporate Finance Book Recommendations

Can you share your recommendations for corporate finance if you have any? A slightly more detailed version would be better: For example, something like: Advanced Undergrad: Varian's $\textit{...
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How to calculate capital investment?

So i have this question: After spending 3 million on research, Better Mousetraps has developed a new trap. The project requires an initial investment in plant and equipment of 6 million. This ...
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Interpeting equivalent annual cash flows

So i have this question: RainMan Inc. is in the business of producing rain upon request. They must decide between two investment projects; a new airplane for seeding rain clouds or a new weather ...
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Relevance of change in Inventory in calculation of Free Cash Flow

Free cash flow (FCF) can be obtained by $$ \text{FCF}=(\text{Revenues}-\text{Cost}-\text{Depreciation})(1-\tau)+\text{Depreciation}-\text{Capital Expenditures}-\Delta(\text{Net Working Capital}) $$ ...
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Does commercial paper usually carry a higher yield than corporate bonds? Why?

In Banking: A Very Short Introduction, Goddard and Wilson write: [Commercial paper] usually carries a higher yield than corporate bonds. But aren't corporate bonds longer term than commercial ...
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Can corporate tax loss carryforward function like a sort of insurance policy?

I'm a graduate student in mathematics, with a casual knowledge of economics, so please let me know if this question is a non-sequitur or off base. Here's the intuition I'm trying to capture: Suppose ...
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2 votes
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How can a company run out of cash when its stock prices is dropping?

For instance, in 2008, the Royal Bank of Scotland saw its stock price drop by ~30% in a day, and it was apparently impossible for the bank to make it till the end of the day because it would run out ...
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Black-Scholes Model question

Suppose a company has a zero coupon bond with face value of 200 million which matures in a year. Its assets has a market value of 300 million. The standard deviation is 30% and the risk free rate is ...
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Why do companies sit on cash while they have debt?

Why don't they use cash to pay down their debts?
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Present Value Analysis

For my exmaple, we have machine A with an initial cost of 15K and O&M of 2k per year for the next 4 years. After 4 years, the O&M rise to $2.7k per year. No salvage value and life span of 20 ...
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How should I evaluate my startup?(specific question)

If I have a startup that produces a product that I estimate to sell 100/per month, with 50%profit, and $200 is the customer price of each product, How can I evaluate this business to find investors?
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If I have a £25,000 loan, in a balance sheet do I include it in the Cash as well as a liability? [closed]

I'm new to all this and balance sheets are extremely confusing. In this example I've received a £25,000 loan from the bank, it has a fixed interest rate of 6% to be paid over 1-5 years. This is the ...
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Where are bank loans in balance sheet?

I am looking at the balance sheet of Coca-Cola (https://www.marketwatch.com/investing/stock/coke/financials/balance-sheet), but I cannot guess where loans with banks are. These liabilities accounts ...
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Best texts on cash usage and share buybacks in companies

What would be a good reference for how companies utilise their cash to conduct share buybacks. I am trying to understand how share buybacks affect the valuation of a company.
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