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Questions about finance

Discussion in 'BBS Hangout' started by HoustonTexas, Nov 8, 2012.

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  1. HoustonTexas

    HoustonTexas Member

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    If a company needs money for a short time would they issue stock or borrow from banks and for long term would the issue bonds or borrow from banks?

    Also:

    What is the "minimum rate of return on a common stock that an investor must receive" called?
     
    #1 HoustonTexas, Nov 8, 2012
  2. 713

    713 Member

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    She's cheating on you with me. i think you need to move on and find someone else to love bruh.
     
    #2 713, Nov 8, 2012
  3. jank1434

    jank1434 Member

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    Is it required rate of return? Or are you looking for a different term?
     
    #3 jank1434, Nov 8, 2012
  4. HoustonTexas

    HoustonTexas Member

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    Yes you are right, thanks.

    if you can help me with this one as well:

    To calculate the interest payment in dollars a bond will pay the owner each year

    Do you multiply the YTM by the bond price? or do you either divide the YTC by the call price or divide Rd by coupon?
     
    #4 HoustonTexas, Nov 8, 2012
  5. larsv8

    larsv8 Member

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    This reeks of a finance quiz you should be doing yourself!

    Short term = banks, long term = bonds

    Second question is worded a little funny. Investors aren't entitled to any rate of return on stocks. But they are probably referring to required rate of return.
     
    #5 larsv8, Nov 8, 2012
  6. ynelilvs99

    ynelilvs99 Member

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    If a company needs money for a short time would they issue stock or borrow from banks
    -- they would issue stocks

    and for long term would the issue bonds or borrow from banks? -- they would borrow from banks
     
    #6 ynelilvs99, Nov 8, 2012
  7. larsv8

    larsv8 Member

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    And a bond pays the coupon value to the owner.

    If it pays twice a year the 2(coupon) / (face value of the bond) = interest the bond earns.
     
    #7 larsv8, Nov 8, 2012
  8. HoustonTexas

    HoustonTexas Member

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    I am reviewing for an exam, the teacher doesn't give back the right answers for questions missed on homeworks/quizzes so I needed some help on the answers lol.
     
    #8 HoustonTexas, Nov 8, 2012
  9. RMGEEGEE

    RMGEEGEE Member

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    I would think..

    Short term: Issue stocks

    Long term: Issue bonds

    & yes, req rate of return.
     
    #9 RMGEEGEE, Nov 8, 2012
  10. HoustonTexas

    HoustonTexas Member

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    everyone has something different for the short term/long term.

    I think that short term is issue stocks and long term is issue bonds.

    Thank you guys for the help.


    I have these two that I am also not sure about, if anyone has the time:

    returns that a company makes in excess of the WACC would be expected to go to: ... is it common equity?

    and

    An expected inflation that would affect a bond/stock would be included in the:... is it coupon interest payments OR required rate of return an investor must receive to buy the bond/stock. I broke it down to these two, not sure which one it is?
     
    #10 HoustonTexas, Nov 8, 2012
  11. Classic

    Classic Member

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    lol, there was 3 dif answers

    you fuqed!

    (but GL)
     
    #11 Classic, Nov 8, 2012
  12. HoustonTexas

    HoustonTexas Member

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    lol, thanks
     
    #12 HoustonTexas, Nov 8, 2012
  13. Classic

    Classic Member

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    BTW, from the balance sheets of my clients i've seen, I think short term you borrow money from the bank and long term is issue bonds. Stocks seems like a mid-term capital raising solution...

    but then again i graduated over 7 years ago with finance being 8+ yrs ago so no idea how i'd do on a quiz:(
     
    #13 Classic, Nov 8, 2012
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