Study Session 7: Corporate Finance
Reading CFAI it is a little unclear -
Do audit and compensation committee have to be comprised by 100% independent directors?
The most recent bond issue includes a covenant that limits the company’s D/E ratio to 35%. She asks Lee to prepare an analysis for Avignon, using the information in Exhibit 3, to see if the debt covenant will be violated if the company repurchases shares. Info provided:
Book value of equity C$3,600 million
Shares outstanding 200 million
Expected share repurchase price (at market) C$32.00
Cash available for repurchase C$155 million
Debt- to- equity ratio 30.0%
After- tax cost of debt 5.0%
Stock repurchase is similar to stock dividends?
I remember it reading somewhere but I’m not sure if it’s stock dividend or stock split
Can someone please help?
Thank you so much!
Corporate governance best practice is to hold annual board elections (not staggered), yet staggered elections make for a pre-offer takeover defense mechanism. How should I view this contradiction?
Is it mandatory for ALL audit committee members to have previous audit experience?
Assuming for example:
- Grant of options 1 January 2010
- Vesting of options 1 January 2015
I understand the expense will be recognised between the two above dates, on a straight line basis
However what happens in the option price (and value) increases in between these two dates? Is the amount to be expensed determined at grant date and does not change even if value of the options change?
If the Post Merger HHI is over 1800 but the Change in Pre- and Post-Merger HHI is LESS than 50, what is the conclusion?
Any finance textbook I have encountered including CFA materials states something like this:
Not a CFA topic, but when calculating EBITDA, do you add back net interest expense or only interest expense?
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