Security Market Value Required Rate of Return
Debt $20 million 6%
Preferred stock $10 million 8%
Common stock $50 million 12%
When corporations need to raise funds through stock issues, do they rely upon the:
A) primary market.
B) secondary market.
C) over-the-counter market.
D) centralized NASDAQ exchange
Do the concept of compound interest refers to:
A) earning interest on the original investment.
B) payment of interest on previously earned interest.
C) investing for a multi-year period of time.
D) determining the APR of the investment.
When projects are mutually exclusive, selection should be made according to the project with the:
A) longer life.
B) larger initial size.
C) highest IRR.
D) highest NPV.
The after tax cost of debt is 6% * (1 - 0.35) = 6% * 0.65 = 3.9%
The WACC is then 3.9% * 20/80 + 8% * 10/80 + ...
This solution discusses calculating WACC, raising funds, compound interest and project selection.
Similarities and Differences Between Islamic and Ethical Finance
What are the differences and similarities between ethical finance and Islamic finance?
1. I want to have knowledge of the facts and understand the related facts in a broader context about the mechanism of both ethical finance and Islamic finance, how they work.
2. I will appreciate if this is backed by more references, preferably 5 references;
3. How can I structure these ideas in an essay that have the following:
• Introduction/ Abstract
One paragraph as a condensed summary to the beginning of the paper under the title "Abstract/ Introduction"
• Literature review:
With summarized major ideas and references.
State the idea about the subject matter showing the basic theory and background about both ethical finance and Islamic finance with comparisons and contrasts.
Synthesize the ideas obtained and add some evaluation and comments.
Give more detail on the topic with formulas, numerical examples, cases from both with comparisons and contrasts.
• Arguments, formulas or examples in support of your statement
Supported arguments that pays attention to reasons, numerical examples and cases and weighs arguments in favor and against a the stated facts. Elaborate and focus numerical examples with formulas,cases comparisons, graphics and statistics that help in showing what is meant keeping in mind that the controversial subject matter which has its equivalence in the ethical and Islamic finance.
Arguments supporting the statement to balance the arguments for and against this conclusion with comparison and contrast. What precautionary measures should Islamic financial institutions take to avoid non-compliance with Sharia showing the contribution of Islamic finance to the financial system and the economy at large.
It is appropriate to add an assessment or opinion.