Principles of Corporate Finance_ 12th Edition

672 Part Seven Debt Financing bre44380_ch25_652-672.indd 672 10/05/15 12:54 PM These are net leases; all operating costs are abs ...

● ● ● 673 bre44380_ch26_673-706.indd 673 09/30/15 12:09 PM Part 8 Risk Management M ost of the time we take risk as God-given. A ...

674 Part Eight Risk Management bre44380_ch26_673-706.indd 674 09/30/15 12:09 PM fixed price. Of course, neither party knows next ...

Chapter 26 Managing Risk 675 bre44380_ch26_673-706.indd 675 09/30/15 12:09 PM Banks and bondholders recognize these dangers. The ...

676 Part Eight Risk Management bre44380_ch26_673-706.indd 676 09/30/15 12:09 PM Risk management requires some degree of centrali ...

Chapter 26 Managing Risk 677 bre44380_ch26_673-706.indd 677 09/30/15 12:09 PM cannot diversify away market or macroeconomic risk ...

678 Part Eight Risk Management bre44380_ch26_673-706.indd 678 09/30/15 12:09 PM State Farm Insurance issued $300 million worth o ...

Chapter 26 Managing Risk 679 bre44380_ch26_673-706.indd 679 09/30/15 12:09 PM Hedging involves taking on one risk to offset anot ...

680 bre44380_ch26_673-706.indd 680 09/30/15 12:09 PM Futures Exchanges Our heating-oil distributor and refiner do not have to ne ...

Chapter 26 Managing Risk 681 bre44380_ch26_673-706.indd 681 09/30/15 12:09 PM For many firms the wide fluctuations in interest r ...

682 Part Eight Risk Management bre44380_ch26_673-706.indd 682 09/30/15 12:09 PM In addition, futures contracts are marked to mar ...

Chapter 26 Managing Risk 683 bre44380_ch26_673-706.indd 683 09/30/15 12:09 PM Northern Refineries suffers a cumulative loss of $ ...

684 Part Eight Risk Management bre44380_ch26_673-706.indd 684 09/30/15 12:09 PM Spot and Futures Prices—Commodities The differen ...

Chapter 26 Managing Risk 685 bre44380_ch26_673-706.indd 685 09/30/15 12:09 PM Figure  26.2 plots the annualized net convenience ...

686 Part Eight Risk Management bre44380_ch26_673-706.indd 686 09/30/15 12:09 PM six months. Of course, generators and electricit ...

Chapter 26 Managing Risk 687 bre44380_ch26_673-706.indd 687 09/30/15 12:09 PM Some company cash flows are fixed. Others vary wit ...

688 Part Eight Risk Management bre44380_ch26_673-706.indd 688 09/30/15 12:09 PM The dealer is quoting a rate for five-year swaps ...

Chapter 26 Managing Risk 689 bre44380_ch26_673-706.indd 689 09/30/15 12:09 PM zero. The NPV drifts away from zero as time passes ...

690 Part Eight Risk Management bre44380_ch26_673-706.indd 690 09/30/15 12:09 PM Here are Possum’s cash flows (in millions): Year ...

Chapter 26 Managing Risk 691 bre44380_ch26_673-706.indd 691 09/30/15 12:09 PM Inflation swaps allow a company to protect against ...