Question
Evidence adduced at the trial disclosed that the plaintiff owned a tractor-trailer rig which he operated as an employee of the Chicago-St. Louis Transport Company.
Evidence adduced at the trial disclosed that the plaintiff owned a tractor-trailer rig which he operated as an employee of the Chicago-St. Louis Transport Company. On the morning of August 28, 1982, the plaintiff drove his tractor from his home at Chatsworth to the defendant's manufacturing plant in Will County. The plaintiff upon his arrival at the plant hooked on to his trailer which had been loaded prior to his arrival and then drove the unit onto a platform scale located on defendant's premises. Plaintiff after stopping on the scale then exited his tractor in order to deliver certain papers to an employee of the defendant. Plaintiff's tractor was of the cab over engine type with the floor of the cab being 4 to 4 1/2 feet above ground level. It was necessary for the plaintiff to descend ladder-type steps affixed to the tractor. After both of plaintiff's feet had reached the ground and as he started to turn toward the front of the tractor, his left foot slipped off a concrete ledge around the scale platform causing him to fall off the ledge and onto the adjacent ground. The ledge was of concrete and was 12 inches wide. The ground was from 4 to 8 inches lower than the ledge.
The Complaint states that it is inferred from a 28 November 1988 AT & T Bulletin issued to AT & T employees that AT & T was aware of the defectiveness of the conference calling feature.Id., 32;see also28 November 1988 AT & T Bulletin. The 28 November 1988 AT & T Bulletin states: "`Under some conditions, the far-end parties on a conference call cannot hear each other very well.'"Id.The Complaint further quoted the 28 November 1988 AT & T Bulletin as follows: "`Some of the loss is within the Central Office and some may be attributed to the switched network.The rest of the loss is contributed by the SPIRIT controller which has a 3DB loss on each conferenced trunk.'" Complaint, 32;see also28 November 1988 AT & T Bulletin. The Complaint states the 28 November 1988 AT & T Bulletin further provided: "`Customers should be aware that ...high-transmission can't be guaranteed.For those customers for whom high-quality conference transmission is critical, the MERLIN products should be recommended, since some signal boosting takes place. If MERLIN is not appropriate, Alliance Teleconferencing Services should be recommended.'" Complaint, 32-33;see also28 November 1988 AT & T Bulletin.
1.Question.Why do firms borrow capital that has to be repaid rather than finance a firm with 100% equity?
2.QuestionWhat is the meaning of "Asset Beta"? How it is practically calculated? What is the relation of asset
beta with the equity beta of the company? Kindly explain & illustrate.
3.Question: What is the difference between Unsystematic risk and "business risk " of Systematic Risk?
4.Question:
When and why 'introduction' is used as a method of obtaining floatation?
5.Question: Please explain the terms asset beta and equity beta, the difference between the two and how they are
related. Is there any standard formula to calculate re-gearing and de-gearing betas? Though the
formula is given in the formula sheet of the exam paper, in the suggested answers given by the
examiner, other formulas are used to calculate the above.
6.Question
In the examiners 'Questions and Answers' for May 2010, question four (a) required a diagram
illustration for systematic and unsystematic risks. I have not attempted such a question in the CIMA
Exam Practice Kit, which made me quite anxious. Besides this diagram and the diagram for working
capital policy, what other diagrams should I learn? I understand that Modigliani and Miller (MM) theory
is an important part of the F3 syllabus, but I have difficulty in understanding it. Can you explain the
theory in simple terms, including the limitations of the theory?
7.QuestionCan you please explain to me the difference between cost of equity and cost of capital? For a geared
entity, how would raising equity finance impact on the cost of equity? I understand that equity finance
would not affect the cost of equity of a non-geared entity, since the financial risk will not be changed.
8.Question: How do you work around questions involving WACC and what does it mean to gear and regear?
9.QuestionIf Beta(eq) measures financial & business risk, what does Beta(debt) measure and if debt is risk- free
is Beta (debt) = 0 ?
10.Question: WACC three propositions always confuse me both in the Tax and the No tax together with the
calculation. So please can you explain it in simple words?
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