1. Chris Smith of XYZ Pension Plan has historically invested in the stocks of only U.S. domiciled companies. Recently, he has decided to add international exposure to the plan portfolio. Identify and briefly discuss three potential problems than Smith may confront in selecting international stocks that he did not face in choosing U.S. stocks. ? <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<. 2. Discuss why estimating the value of a bond is easier than estimating the value of common stock. ? 3. Under what conditions will it be ideal to use one or several of the relative valuation ratios to evaluate a stock? ? 4. Discuss a scenario where it would be appropriate to use one of the present value of cash flow techniques for the valuation. ? 5. Would you expect the required rate of return for a U.S. investor in U.S. common stocks to be the same as the required rate of return on Japanese common stocks? What factors would determine the required rate of return for stocks in the United States versus Japan? 6. <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< ? 7. Explain what it means for a firm to have a current ratio equal t0 0.50. Would the firm be better off if the current ratio were 1.50? What if it were 15.0? Explain your answer. ? 8. What types of information do common-size financial statements reveal about the firm? What is the best use of these common-size statements? ? 9. Prince Albert Canning PLC had a net loss of £13,482 on sales, £138,793 (both in thousands of pounds). What was the company’s profit margin? Does the fact that these figures are quoted in a foreign currency make any difference? Why In dollars, sales were $274,213,000. What was the net loss in dollars.?
