Essay Mt480 Corporate Finance Unit 9 Project - 1159 Words

Student MT480-01: Corporate Finance Unit Nine: Assignment Date Assignment: Complete the following exercises and problems from the textbook. Some problems ask multiple questions; be sure to answer every part of the exercise or problem unless otherwise noted * Chapter 28: Practice Questions 2, 10, 11, and 13 * Chapter 34: Practice Questions 2, 3, and 7 Chapter 28: 2. Table 28.1 shows the 90-day forward rate on the South African rand. a. Is the dollar at a forward discount or premium on the rand? The dollar is selling at a forward premium on the rand. b. What is the annual percentage discount or premium? 4 x [(6.4662/6.5917) – 1] = -0.0762 = -7.62% c. If you have no other information about the two†¦show more content†¦Banks are not the only financial intermediary from which corporations can obtain financing. What are the other intermediaries? How much financing do they supply, relative to banks, in the United Kingdom, Germany, and Japan? The other financial intermediaries include insurance companies, mutual funds and pension funds. In Japan, banks provide more financing than other financial intermediaries do. In the U.K., other financial intermediaries provide substantially more financing. In the U.S., banks are less important sources of financing compared to financial intermediaries. While in Europe, financing provided by banks and financing provided by other financial intermediaries are approximately equal. 3. Why is transparency important in a market-based financial system? Why is it less important in a bank-based system? Transparency is essential in a market based system, but is not necessarily a requirement for a bank-based system. In a bank based system, banks have long-standing working relationships with the companies seeking financing, and banks have on-going access to information about the firm. In a market based system, creditors and equity-holders require that financial information about companies seeking financing be available, sufficiently detailed and accurate if they are to participate in the market. This information, including audited financial statements, allows participants in the market to make