Corporate Finance - 2588 Words
(1) Sustainable growth rate=retention ratio*ROE=PRAT (P: Profit margin, R:
retention ratio=retained E/E; A: Asset turnover ratio=sales/asset; T:
Asset/beginning of the period equity)
(2) Compounding an investment m times a year for T years provides for future
value of wealth: FV=C0*(1+r/m)^(m*T)
(3) Future value of an investment compounded continuously over many
periods: FV=C0*e^(r*T) e=2.718
(4) Perpetuity: PV=C/r; Growing Perpetuity: PV=C/(r-g) g=growth rate;
2,588 Words | 11 Pages
Corporate Finance - 1646 Words
The University for business
and the professions
MSc Degree in Shipping, Trade and Finance
MSc Degree in Supply Chain, Trade and Finance
MSc Degree in Energy, Trade and Finance
Cass Business School
1st May 2013
Division of Marks:
Section A carries 36 marks, Section B carries 28
marks and Section C carries 36 marks.
Instructions to students:
Students should answer TWO...
1,646 Words | 9 Pages
Corporate Finance - 583 Words
Corporate finance is an area of finance dealing with the financial
decisions corporations make and the tools and analysis used to make
these decisions. The primary goal of corporate finance is to maximize
corporate value while managing the firm's financial risks. Although it is in
principle different from managerial finance which studies the financial
decisions of all firms, rather than corporations alone, the main concepts
in the study of corporate...
583 Words | 4 Pages
Corporate Finance - 14018 Words
Subject: Corporate Finance (3 credits)
1. Essentials of managerial Finance: Harcourt College 2000
2. Fundamentals of financial management: Mc Graw Hill 2007
Chapter 01: An overview of Finance
What is finance?
Finance is concerned with decisions about money (cash flows)
Finance decisions deal with how money is raised and used
Everything else being equal:
* More vale is preferred to less
* The sooner cash is received the more value it has
* Less risky...
14,018 Words | 56 Pages
All Corporate finance Essays
Corporate Finance - 4887 Words
Table of Content
Executive Summary 3
1. Introduction 4
1.1 Overview of Harvey Norman Holding Limited 4
1.2 Major Competitor 5
1.2.1 JB Hi-Fi 5
1.2.2 Woolworth 5
2. Capital Structures 6
2.1 Types of Funding 6
2.2 Recent Trends of Leverage 7
2.3 Comparison of capital structure with similar companies 9
2.4 Capital expenditures and its financing 10
2.5 Important factors influencing the use of debt financing 10
2.5.1 Tax Advantage 10
4,887 Words | 17 Pages
Corporate Finance - 593 Words
Master in Banking and Finance
A. PROBLEMS (20 points each problem)
1. FAGE Manufacturing is currently an all-equity firm with 20 million shares outstanding and a stock price of $7.50 per share. Although investors currently expect FAGE to remain an all-equity firm, the company plans to announce that it will borrow $50 million and use the funds to repurchase shares. FAGE will pay interest only on this debt, and it has no further plans to increase or...
593 Words | 3 Pages
Corporate Finance - 1436 Words
There is nothing like optimum capital structure for a firm.
The Optimal Capital structure is that Capital Structure at which the weighted Average cost of capital (Ko) is Minimum. It is that combination of Equity and Debt at which the total cost of capital is mini-mum.
Trade-off theory argues that there's an optimal amount of debt of each firm. At this level of debt, firms can take the most advantage of debts. Debts can be tax shield so that they can save money for firms to reinvest in...
1,436 Words | 4 Pages
Corporate Finance - 7798 Words
Table of content
1.1. Overview of Adelaide Brighton Limited 4
1.1.1. History 4
1.1.2. Industry 4
1.2. Major competitors 5
1.2.1. Boral Limited 5
1.2.2. Fletcher Building Limited 5
1.2.3. Brickwork Limited 5
2.Capital structure 6
2.1. Leverage 6
2.1.1. Current ABC’s leverage 6
2.1.2. Recent history of ABC’s leverage 6
2.2. ABC’s capital expenditures...
7,798 Words | 30 Pages
corporate finance - 1950 Words
The word Corporate Finance can be defined in terms that may vary considerably across the world. Corporate Finance is one of the three areas of the discipline of finance and can be defined broadly as a field of finance dealing with acquisition and allocation of a corporation's funds or resources, with the goal of maximizing shareholder wealth i.e. stock value. This division of a company is basically concerned with the financial operation of the company from company’s point of...
1,950 Words | 5 Pages
Corporate Finance - 3654 Words
Part I – Perfect capital markets, capital structure and cost of capital (15 points) GP Corp. has common stock with a market value of $200 million and riskless debt with a value of $100 million. Investors expect a 15% return on the stock and a 6% return on the debt. Assume perfect capital markets without any taxes. a) Suppose GP issues $100 million of new stock to buy back the debt. What is the expected return of the stock after this transaction? (4 points) b) Suppose instead GP issues $50...
3,654 Words | 12 Pages
Corporate Finance - 287 Words
Chapter 9. Risk and resturn: lessons from market history
Two forms of return on investment in shares:
1. Dividend. When a company is profitable, some of the profit is divided amongst the shareholders. This part is the income component of your return.
2. Capital gain/loss. This is the initial worth of the equity minus the end-of-year worth of the equity. This is the second component of your return.(also reffered to a negativ/positive CG)
The total monetary return is the sum of the...
287 Words | 2 Pages
Corporate Finance - 1529 Words
This report has been produced to outline developments in Corporate Finance. Why and how it is done.
I have looked at Bord na Mona for this report. The company was set up in 1946. A company that has lasted over 75 years must have made sound financial investments.
The report shows how BNM is changing from a predominantly fossil fuel company to a renewable energy company. It shows what investments were made for this to happen. It shows how much they cost and...
1,529 Words | 6 Pages
Corporate Finance - 69417 Words
P. Frantz, R. Payne, J. Favilukis
Undergraduate study in Economics, Management, Finance and the Social Sciences
This subject guide is for a Level 3 course (also known as a ‘300 course’) offered as part of the University of London International Programmes in Economics, Management, Finance and the Social Sciences. This is equivalent to Level 6 within the Framework for Higher Education Qualifications in England, Wales and Northern Ireland (FHEQ). For...
69,417 Words | 194 Pages
Corporate Finance - 3083 Words
What is Corporate Finance?
It�s all corporate finance.
My unbiased view of the world
Every decision made in a business has financial implications, and any decision that involves the use of money is a corporate financial decision. Defined broadly, everything that a business does fits under the rubric of corporate finance. It is, in fact, unfortunate that we even call the subject corporate finance, because it suggests to many observers a focus on how large...
3,083 Words | 8 Pages
Corporate Finance - 365 Words
As my opinion, I am suitable to be a corporate financier. When I finished my Finance and Investment degree, I will have strong analytical and problem solving skills. It is fully enrich my knowledge in financial market. I have the knowledge to be computer literate with spread sheets, word processors, presentation packages and large-scale data management tools.I can running numbers as part of learning accounting, capital-raising, and financial planning.Also, I did my A-level for Accounting,...
365 Words | 1 Page
corporate finance - 1297 Words
Pacific Grove Spice Company Case Analysis
December 17, 2013
University of Nebraska at Kearney
This paper was prepared for: FIN 809, taught by Dr. Beverly Frickle.
Based on the company’s forecasted financial statements, can the company quickly comply with the banks requirements? It depends on what you consider quickly. If the deadline is to only to have a plan ready by June 30th, 2012 then it looks like they can come...
1,297 Words | 4 Pages
The Bible And Corporate Finance - 2061 Words
The Bible and Corporate Finance
People rarely associate religion with the business world or the finance industry, nor do they think religion can guide the practice. From a logical standpoint religion and a firm's operations do not correlate. From a societal view people see good religious peoples businesses fail while godless industries thrive. The question usually asked is how does the Bible apply to business world? The real question should be how could the Bible and God guide me in my...
2,061 Words | 6 Pages
Corporate Finance (ECON W4280)
Tri Vi Dang
Email: [email protected]
Corporate Finance (ECON W4280)
Meeting time: Tu, Th 4.10-5.25
Meeting place: Hamilton 503
Office address: IAB 1032
Office hours: Th 11.00-12.00 and other times by appointment
The aim of this introductory course in corporate finance is to provide students with
fundamental concepts for understanding firms’ financing decisions and the basic tools for the
valuation of a corporation. This...
1,466 Words | 9 Pages
Corporate Finance Syllabus - 2385 Words
Prof. Anna Scherbina
UC Davis Graduate School of Management
Office: 126 AOB IV
e-mail: [email protected]
We will explore how corporations make financial decisions through the analysis of
Harvard Business School cases. Should a firm undertake a new investment opportunity,
raise equity, acquire another firm, or conduct an IPO? How should small firms manage
their working capital? How fast should a firm...
2,385 Words | 13 Pages
Fundamentals of Corporate Finance 9e
Chapter 01 - Introduction to Corporate Finance
Chapter 01 Introduction to Corporate Finance Answer Key
Multiple Choice Questions
1. Which one of the following terms is defined as the management of a firm's long-term investments? A. working capital management B. financial allocation C. agency cost analysis D. capital budgeting E. capital structure Refer to section 1.1
AACSB: N/A Difficulty: Basic Learning Objective: 1-1 Section: 1.1 Topic: Capital budgeting...
82,689 Words | 325 Pages
Answer to the Corporate Finance - 3853 Words
Capital Structure in a Perfect Market
14-1. Consider a project with free cash flows in one year of $130,000 or $180,000, with each outcome being equally likely. The initial investment required for the project is $100,000, and the project’s cost of capital is 20%. The risk-free interest rate is 10%. a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment, the project is sold to investors as an all-equity firm. The equity holders will...
3,853 Words | 16 Pages
Corporate Finance - Concept Questions
CONCEPT QUESTIONS - CHAPTER 1
1.1 ( What are the three basic questions of corporate finance?
a. Investment decision (capital budgeting): What long-term investment strategy should a firm adopt?
b. Financing decision (capital structure): How much cash must be raised for the
c. Short-term finance decision (working capital): How much short-term cash flow does company need to pay its bills.
( Describe capital structure....
12,262 Words | 50 Pages
Ntroduction to Corporate Finance - 2322 Words
Introduction To Corporate Finance:
A division or department that oversees the financial activities of a company. Corporate finance is primarily concerned with maximizing shareholder value through long-term and short-term financial planning and the implementation of various strategies. Everything from capital investment decisions to investment banking falls under the domain of corporate finance.
Corporate finance is the funding provided to support the operations of the venture itself, as...
2,322 Words | 8 Pages
Advanced Corporate Finance - 933 Words
Advanced Corporate Finance I SS 2012
Problem Set 1 Valuing Cash Flows
Problem Set 1
Valuing Cash Flows
Exercise 1 (Ex. 11.2 - 11.6 GT): Assume that Marriott’s restaurant division has the following joint distribution with the market return: Market Scenario Bad Good Great .25 .50 .25 Probability Market Return (%) -15 5 25 YR 1. Cash Flow Forecast $40 million $50 million $60 million
Assume also that the CAPM holds. 11.2 Compute the expected year 1 restaurant cash ﬂow for Marriott. 11.3...
933 Words | 3 Pages
Corporate Finance Review - 1416 Words
-CAPM: how risk affects return
-Expected Return (on investment): mean value of its probability distribution of returns; greater the probability return will be below expected, greater the stand-alone risk
-Risk Averse: he/she must be compensated for holding risky assets
-Asset has 2 risk types: Diversifiable risk can be eliminated by diversification; market risk cannot be eliminated
-Market risk measured by standard deviation of returns on portfolio consisting of all stocks...
1,416 Words | 5 Pages
Finance Corporate Question 24
24. We can use the debt-equity ratio to calculate the weights of equity and debt. The debt of the company has a weight for long-term debt and a weight for accounts payable. We can use the weight given for accounts payable to calculate the weight of accounts payable and the weight of long-term debt. The weight of each will be:
Accounts payable weight = .15/1.15 = .13 Long-term debt weight = 1/1.15 = .87
Since the accounts payable has the same cost as the overall WACC, we can write the equation...
260 Words | 1 Page
Corporate Finance Course Notes
The course is aimed at to develop in-depth understanding of Finance function of a corporation and build capacity to apply theory in real world situations. The course will present the ‘Big Picture’ of Corporate Finance so that students understand how things fit together. After successfully completing the course, students should be able to take optimal decisions in a corporate setting, when working as professionals in the field.
Introduction to Corporate Finance:...
752 Words | 4 Pages
Corporate Finance Test with Answers
SECTION A - SHORT ANSWER QUESTIONS
Total for Section A – 20 marks
(4 questions x 5 marks each)
ANSWER ALL QUESTIONS
DISCUSS FULLY THE VALIDITY OF EACH OF THE FOLLOWING STATEMENTS.
1. “Agency problems arise if managers make decisions that benefit themselves at the
expense of the firm’s shareholders.”
“If the current stock price were greater than P 0
Div 1 + P 1
(1 + r e )
we would expect investors to rush in and buy it, driving up the stock’s price.”
359 Words | 9 Pages
Corporate Finance Test with Answers
Corporate Finance: An Introduction (Welch)
1.1 The Goal of Finance: Relative Valuation
Which of the following statements is true?
In finance, it is important to determine an asset's absolute value.
The relative value of any asset is, at best, a lucky guess.
The true value of an asset is unaffected by externalities such as interest rate levels, the state of the economy, etc.
Valuation is not an exact...
1,745 Words | 9 Pages
Corporate Finance - Cost of Capital
I. Cost of Capital 3
1. Definition 3
2. Major components of cost of capital 3
2.1. Cost of debt 3
2.2. Cost of equity 4
2.3. Cost of preferred stock 4
2.4. Cost of retained earning 4
2.5. Cost of Newly Issued Stock 5
II. Motivations and caculations 5
1. Motivations 5
2. Calculations 5
2.1. Cost of debt 5
2.2. Cost of equity 6
III. Weighted average cost of capital (WACC) 7
1. Caculations 7
2. Usefulness and implications of...
2,888 Words | 11 Pages
Corporate Business Finance
- 7356 Words
Corporate Business Finance
Lauren Leigh Essaram
27 September 2010
Submitted in partial fulfilment of the duly performed requirement of International Business Finance, School of Economics and Finance, University of KwaZulu-Natal
Non-recourse financing has grown in popularity, especially in developing countries. It has done so more specifically in the basic infrastructure, natural resources and also in the...
7,356 Words | 22 Pages
Advanced Corporate Finance - 4289 Words
University of Puget Sound
School of Business and Leadership
BUS 434 Advanced Corporate Finance
Professor Alva Wright Butcher
Tues-Thurs 11:00-12:20 McIntyre 107
Spring Semester 2012
Office: McIntyre 111 I Phone: 253-879-3349 FAX: 253-879-3156
Office Hours: T-Th: 1:00-1:50
And by appointment
Note that I am always willing to schedule additional office hours by appointment. I check email frequently, so that is also a...
4,289 Words | 17 Pages
Corporate Finance Study Guide
Valuation- “projected financial performance into values.” Involves projecting/ making budgets. Value of an Asset = Value of Cash Flow (CF) it Will Generate (not profits) CF=1/(1+r)^1
value is based on three things- Current Cash Flow, Expected growth (used with to estimate future cash flow), Riskiness of expected future cash flow (discount rate).Net Present Value- Value CFs using project discount rate based on risk Investment Decision-which real assets the firm should acquire.Choose positive and...
2,399 Words | 6 Pages
Corporate Finance: Cost of Capital
The Cost of Capital
After reading this chapter, students should be able to:
• Explain what is meant by a firm’s weighted average cost of capital.
• Define and calculate the component costs of debt and preferred stock.
• Explain why retained earnings are not free and use three approaches to estimate the component cost of retained earnings.
• Briefly explain why the cost of new equity is higher than the cost of retained earnings, calculate...
4,500 Words | 19 Pages
Corporate Finance Notes - 1869 Words
By Zhipeng Yan
Stephen A. Ross, Randolph W. Westerfield, Jeffrey Jaffe
Chapter 1 Introduction to Corporate Finance ..................................................................... 2 Chapter 2 Accounting Statements and Cash Flow.............................................................. 3 Chapter 3 Financial Markets and NPV: First Principles of Finance................................... 6 Chapter 4 Net Present...
1,869 Words | 7 Pages
Corporate Finance Cheatsheet - 1206 Words
* PV(CF) = CF/(1+r)t AKA PV = FV/(1+r)t
* NPV = PV(CFs) – Investment = -C0 +C1/(1+r)+C2/(1+r)2+C3/(1+r)3+… = ∑(Expected CFt)/(1+r)t – Investment
* Perpetuity – pays a fixed amount C per period forever
* P(C,r) = C/r requires cash flow to begin NEXT period. If begin now, then PV = C + C/r
* Annuity – fixed stream of cash flows that has a final period t
* A(C,r,t) = C/r [1-1/(1+r)t]
* Growing Perpetuity – G(C,r,g) = C/(r-g) C is initial cash flow, r is discount...
1,206 Words | 4 Pages
Study Guide: Corporate Finance
Cost of Capital
Multiple Choice Questions
1. A group of individuals got together and purchased all of the outstanding shares of common stock of DL Smith, Inc. What is the return that these individuals require on this investment called?
A. dividend yield
B. cost of equity
C. capital gains yield
D. cost of capital
E. income return
2. Textile Mills borrows money at a rate of 13.5 percent. This interest rate is referred to as the:
A. compound rate.
B. current yield.
C. cost of...
15,766 Words | 89 Pages
Introduction to Corporate Finance - 15245 Words
MAF302 Corporate Finance
This study guide provides you of an overview for each of the topic
taught in this unit. These overviews however are not sufficient to learn
all the materials in each of the topic. I therefore would suggest you to
follow the materials in lecture notes and workshops. It is also essential
to read and consult the corresponding text book chapters to develop
your concept and knowledge in this unit.
You will also find some...
15,245 Words | 74 Pages
Corporate Finance Objectives - 1856 Words
If you work in private enterprise, your company measures its success at the end of the year by comparing how much money it made to how much it spent. If it has made more than it has spent, it was a good year. If it has made less than it has spent, it was a bad year—or the company is in an investment phase. (In other words, like Amazon.com, it spent more than it made because the company and its investors believed it would realize a profit in the near...
1,856 Words | 7 Pages
Corporate Finance and Gladstone - 1069 Words
Problem set 2
Gladstone Corporation is about to launch a new product. Depending on the success of the new
product, Gladstone may have one of four values next year: $150 million, $135 million, $95
million, and $80 million. These outcomes are all equally likely, and this risk is diversifiable.
Gladstone will not make any payouts to investors during the year. Suppose the risk-free interest
rate is 5% and assume perfect capital markets.
What is the initial value of Gladstone’s...
1,069 Words | 9 Pages
Corporate Finance Case Study
Solution to Case 23
Evaluating Project Risk
It’s Better to Be Safe Than Sorry!
1. What seems to be wrong with the way the NPV of each project has been calculated? Indicate without any calculations, how Pete and John should go about recalculating the projects’ NPVs.
The NPV of each project has been calculated by discounting the cash flows at the 8% before-tax cost of debt. This is incorrect. Since the company has debt, preferred stock and...
1,415 Words | 8 Pages
Corporate Finance Test Questions
Final Exam Practice Problems
1. Firm ABC’s only outstanding debt is $100,000 worth of coupon bond (market value). Its yield to maturity is 8%. Given that its tax rate is 40%, what is its effective cost of debt?
Effective cost of debt = cost of debt * (1-tax rate) =8%*(1-40%)=4.8%
2. Firm ABC has a stock currently traded at $20. The next year’s dividend will be $0.20. The dividend growth rate is forecasted to be 6% forever. Risk-free rate is 3%, and market risk premium is 4%. Assume that...
1,147 Words | 5 Pages
Scope of Corporate Finance - 941 Words
The Scope Of Corporate Finance
Professor Dr. Rainer Stachuletz Corporate Finance
Berlin School of Economics
Finance Career Opportunities
• Budgeting, financial forecasting, cash management, credit administration, investment analysis, fund procurement
Commercial Banking Investment Banking Money Management
• Consumer banking • Corporate banking
• High income potential • Very competitive industry
• Opportunities in investment advisory firms, mutual fund...
941 Words | 7 Pages
Corporate Finance and Points - 398 Words
Business Consultancy International
Principles of Corporate Finance I
Dr. Kinga Niemczak
Student No.: ______________________
1. a. Calculate the value of a 4.65% five-year €1,000 bond, if you know that the bond is rated AAA and the typical YTM for such bonds is 6.25%.
b. How will the value of this bond change (in %) if...
398 Words | 4 Pages
Corporate Finance Essay - 1165 Words
Corporate Finance Essay
Most corporate financing decisions in practice reduce to a choice between debt and equity. The finance manager wishing to fund a new project, but reluctant to cut dividends or to make a rights issue, which leads to the decision of borrowing options. The issue with regards to shareholder objectives being met by the management in making financing decisions has come to become a major issue of recent times. This relates to understanding the concept of the agency problem. It...
1,165 Words | 4 Pages
international corporate finance - 6160 Words
Chapter 025 Mergers and Acquisitions
Multiple Choice Questions
1. The complete absorption of one company by another, wherein the acquiring firm retains
its identity and the acquired firm ceases to exist as a separate entity, is called a:
c. tender offer.
2. A merger in which an entirely new firm is created and both the acquired and acquiring
firms cease to exist is called a:...
6,160 Words | 41 Pages
Corporate Finance Teachingplan, Cases and Exercises
BBA 2009 Financial Management
TEACHING PLAN AND MODULE RESOURCES 2012
1. Teaching plan
This module is an introduction to the financial management of a corporation. The aim is to give you an overview of the major theories, tools and results in corporate finance. The primary goal of this module is to impart the knowledge to allow you to intelligently solve practical business problems. To achieve this goal, it is crucial that you have a sound understanding of finance theory. As such, the...
1,464 Words | 5 Pages
Corporate Finance Homework - Chapter 4
| Corporate Finance2 CreditsBU.231.620.62Thursday 6pm – 9pm, 10/18/2012--12/13/2012Fall2, 2012Columbia, Columbia Center, 218 |
Phone Number: (410)234-9450
E-mail Address: [email protected]
Required Text and Learning Materials
(1) Berk, J. and P. DeMarzo. 2007. Corporate Finance. 2nd Edition. Pearson, Addison-Wesley with MyLab access. The ISBN is 0-13-295-040-5.
(2) Lecture Notes. The...
1,506 Words | 6 Pages
Applied Corporate Finance - Final Questions
Solutions to Practice Problems
by Kyung Hwan Shim University of New South Wales Australian School of Business School of Banking & Finance for FINS 3625 S1 2010 May 23, 2010
These notes are preliminary and under development. They are made available for FINS 3625 S1 2010 students only and may not be distributed or used without the author’s written consent.
Solution for Question 1
Summary Table of Cash Flows t=0 I II CF from Machinery ignoring depreciation Working Capital...
1,585 Words | 5 Pages
Corporate Finance Solution Quiz 1
List and briefly describe the three basic questions addressed by a financial manager. What should be the goal of the financial manager of a corporation? Why? What advantages does the corporate form of organization have over sole proprietorships or partnerships? If the corporate form of business organization has so many advantages over the sole proprietorship, why is it so common for small businesses to initially be formed as sole proprietorships?
The three areas are:
1. Capital budgeting: The...
598 Words | 2 Pages
Corporate Finance - Bank Case Study
Bendigo Bank Case Study 2011
Question (1): Capital Structure and Financing in the Banking Industry
Australian banks are an interesting case of capital structure and financing considerations as far as companies go, in that they are regulated in a number of ways by the Australian Prudential Regulatory Authority (APRA) and the Reserve Bank of Australia (RBA).
Considerations of capital structure have the effect of reducing the cost of capital and so in turn increase the...
3,085 Words | 13 Pages
Final Question Paper: Corporate Finance
/MiddSuppose that in the coming year, you expect Exxon-Mobil stick to have a volatility of 42% and a beta of 0.9, and Merck's stock to have a volatility of 24% and a beta of 1.1. The risk free interest rate is 4% and the markets expected return is 12%.
The cost of capital for a project with the same beta as Merck's stock is closest to:
. | d. 12.8% | E[R] = Rf + Beta × Risk Premium = .04 + 1.1 × (.12 - .04) = .128 |
Which stock has the highest total risk?
| c. Exxon-Mobil since it...
24,077 Words | 95 Pages
Syllabus Advanced Corporate Finance Spring
NEW YORK UNIVERSITY
STERN SCHOOL OF BUSINESS
UB008.001 ADVANCED CORPORATE FINANCE
Monday Wednesday 9:30am-10:45pm
Professor Nikolay Halov
Office: KMC 9-151
E-mail: [email protected]
• Tuesday 5-7pm
• Other times by Appointment
TA: Ryan Liu
E:mail: [email protected]
Office hours: Friday 4-5pm
Room: E&Y Lounge, LL in Tisch
By the end of this course, I would like you to be able to
1,162 Words | 5 Pages
Corporate Finance Mid Semester Test
SCHOOL OF ECONOMICS, FINANCE & MARKETING
MID SEMESTER TEST
FIRST SEMESTER 2008 – Part-time
STUDENT DETAILS (Please Print Clearly)
Family Name: ___________________________________________________________
First Name: _____________________________________________________________
Tel. No: (BH) ___________________________________________________________
802 Words | 5 Pages
Corporate Finance Chapter 1 Solution
Solutions to Textbook Answers Chapter 1 Introduction
Solutions to questions
1. Finance involves three main areas—corporate finance, financial institutions and markets, and investments—that are closely related and complementary. For example, in corporate finance the central issues are how to acquire and employ or invest funds. To acquire funds a financial manager must deal with financial institutions, so some knowledge of the operations of financial institutions and markets is essential....
2,032 Words | 6 Pages
Mock Exam of Corporate Finance Subject
e TCH321 – CORPORATE FINANCE MOCK EXAM Time: 1 hour 30 minutes The exam lasts 1 hour and 30 minutes and consists of 5 questions. Approved calculators are permitted. You are not allowed to use Excel. This is a closed book exam. You are NOT permitted to access any other material in either written or electronic form. All numerical answers should be reported to TWO decimal places. To ensure the accuracy of your answer, you should perform all intermediate calculations to at least THREE decimal...
1,446 Words | 7 Pages
Song Corporate Finance Chapter 1
Introduction to Corporate Finance
1. Two Questions: what investments should the corporation make and how should it pay for those investments?
a. Investment decisions involve spending money and financing decisions involving raising money
b. Concepts govern good financial decisions
c. Financial managers value the shareholders’ investment opportunities outside their company because of the opportunity cost of capital contributed by shareholders
d. All managers and employees need to pull...
1,118 Words | 4 Pages
Finance - 373 Words
November 5, 2011
1.) Bankston Corpration forecasts that if all its existing financial policies are followed, its proposed capital budget would be so large that it would have to issue new common stock. Since new stock has a higher cost than retained earnings, Bankston would like to avoid issuing new stock. Which of the following actions would REDUCE its need to issue new common stock? B-Increase the percentage of debt in the target capital structure....
373 Words | 1 Page
Finance - 990 Words
South East University
Managerial finance (5133)
Semester: Spring 2013
Warf Computers, Inc., was founded 15 years ago by Nick Warf, a computer programmer. The small initial investment to start the company was made by Nick and his friends. Over the years, this same group has supplied the limited additional investment needed by the company in the form of both equity and short-and long-term debt. Recently the company has developed a virtual keyboard (VK). The VK uses...
990 Words | 4 Pages
finance - 2531 Words
Overview of the financial system
A financial system refers to the mechanism that involves financial markets, financial institutions, laws, regulations and techniques through which financial resources are mobilized from those who have surplus to those in deficit an economy. The primary task of any financial system therefore is to facilitate the movement of funds from those who save to those who borrow to buy needed goods and services or for investments. The financial system...
2,531 Words | 9 Pages
FINANCE - 7623 Words
1.1 You have been asked to identify a range of sources of finance available to Fort Sport Ltd. These can include raising funds through a combination of finance areas. Please identify at least three sources.
Fort Sport Ltd is a small private company who began trading in April 2013. The company supplies fitness products online to the public and specialising in mid range sporting goods and equipment. In 2014, it wishes to increase its activity in the market and as such need to identify a...
7,623 Words | 35 Pages
Finance - 1415 Words
Individual Assignment #2
FORMAT: You can use a Word document, an Excel spreadsheet or both. If you use Excel, submit the Excel file rather than embedding Excel into a Word document. Please use single-space, 11 pt. or 12 pt. font.
Multiple Choice: Select the best response (3 points each). You may add comments to explain your reasons.
1. If the correlation coefficient is 0,
A) You can completely eliminate risk by short selling the riskier asset and...
1,415 Words | 7 Pages
Finance - 6931 Words
FROM THE IDEA TO THE BUSINESS PLAN
In this chapter we examine how one can move from an idea to a determination of the feasibility of the related business opportunity. We present an opportunity screening system to aid in determining whether an idea should be discarded or pursued. We conclude the chapter with an overview of a business plan.
1. Describe the process of moving from an idea to a business plan
2. Understand the components of a...
6,931 Words | 27 Pages
Finance - 5197 Words
TABLE OF CONTENTS
0.1 Introduction of Finance in your organization…………………………..............
Task: 1: Be able to explore the sources of finance available to Sainsbury’s
1.1: Identify the sources of finance available to Sainsbury’s............................................
1.2: assess the implications of the different sources of finance in Sainsbury’s………….
1.3: select appropriate sources of finance for a project in Sainsbury’s…………………..
Task: 2: Be able to analyses the implications of...
5,197 Words | 16 Pages
Finance - 2698 Words
Case Analysis of Netscape's
Initial Public Offering
The Internet Industry consists of companies that provide a wide variety of products and services primarily online through their Web sites. Operations include, but are not limited to, search engines, retailers, travel services, as well as dial-up and broadband access services. Netscape Communications is a US computer services company, best known for Netscape Navigator, its web...
2,698 Words | 8 Pages
Finance - 1204 Words
ROLE AND PURPOSE This subject aims to introduce to students a range of basic concepts and ideas in modern finance. After completing this subject, participants should know the principles involved in making investment and financing decisions, understand functions of financial markets and financial managers, and possess basic knowledge of option pricing and financial planning. This foundation course prepares students for more in‐depth studies at a later stage. LEARNING OUTCOMES Upon completion of...
1,204 Words | 4 Pages
Finance - 1771 Words
1 Bonds (3 points)
A company aims to takeover one of its suppliers valued at 2 million Euros and is planning to fund the takeover by issuing three-year zero coupon bonds, each with face value C1000. After having their credit rating checked, executives have decided that they need to issue 2400 of these bonds to raise the 2 million needed to fund this takeover. What is the YTM of the bonds issued by the company? (a) 5.79% (b) 7.13% (c) 6.27% (d) 5.34% If the company’s credit rating changes due to...
1,771 Words | 5 Pages
Finance - 1290 Words
DEPARTMENT OF BUSINESS
Finance 5613 Fall 2002
Dr. Robert P. Yuyuenyongwatana
Contact: Room 309, Department of Business
E-Mail: [email protected]
Home Page: http://cameron.edu/~roberty
Hours: M-Th 9 - 10:50 a.m., Th 6 - 6:30 p.m.
Or by appointment
The course covers financial decision theories and applications, asset valuation, capital budgeting techniques, capital structure, leasing,...
1,290 Words | 7 Pages
Syllabus: Corporate Finance and Business Journal/newspaper Article
BUSI K4003 Corporate Finance Syllabus
Summer 2012, (Summer Q)
Instructor: Brendan Mallee
Class Time/Location: July 2nd – August 8th MW 6:10-9:30pm / Hamilton Hall 516
This course examines important issues in corporate finance from the perspective of financial managers who are responsible for making significant investment and financing decisions. The course is designed to develop critical corporate finance skills including: financial...
1,109 Words | 4 Pages
Bridging Theory - Practice Gap in Corporate Finance
The QuarterlyReviewof Economics and Finance,Vol. 35, Copyright0 1995 Trustees of the Universityof Illinois All rightsof reproductionin any form reserved. ISSN 003%5797
1, Spring, 1995, pages 7347
Bridging the Theory-Practice Gap in Corporate Finance: A Survey of Chief Financial Officers
EMERY A. TRAHAN and LAWRENCE J. GITMAN Northeastern University and San Diego State University
The primary objective of this article is to assess general research opinions, barriers to using...
6,693 Words | 26 Pages
Case 1 And Case 2 Corporate Finance Co
Case 1 Corporate Finance: Capital Budgeting and Resource Allocation
Victoria Chemicals plc: (A) The Merseyside Project and (Case 22), (B) Merseyside and Rotterdam
Projects (Case 23) - Bruner, 6th ed.
The two cases shall be written as one project
Each group should hand in a final report plus be prepared to present their results at a
The report should contain problems, methods, and relevant references well formulated and
discussed, together with a thorough analysis. (Note: methods...
736 Words | 5 Pages
Corporate Finance Ross Mini Case 8Ed
a. The software consultant is a sunk cost. The consultant is being hired to assist with the decision as to whether to invest in either project or not. This cost will be incurred before the decision for either project is made and is not incremental to either project. Consequently, it is considered a sunk cost.
In addition, the inter-company charge for the computer time is not an incremental cash flow to the firm. Consequently, it is really an...
2,562 Words | 49 Pages
Case Study Corporate Finance Food Industry
CASE STUDY HOMEWORK CORPORATE FINANCE
PROFESSOR: G. BERTINETTI
STUDENT Albert Maurer
The Situation: In 2010 a new company was created in order to enter into the food industry. They spent many months in studying the market, engineering the products and the commercial strategy, find out the production plants. At the end of 2010 the business plan is ready and the company has already participated to an exhibition where many potential customers said to be very interested to the...
3,202 Words | 10 Pages
Finance for Non Finance - 391 Words
FINANCE FOR NON-FINANCIAL PERSONNEL
Specialist Program Area
Knowing how to read financial statements will be invaluable throughout your career, in analyzing business opportunities, assessing financial risks, and communicating your ideas to others. Accounting & Finance for Non-Financial Personnel teaches how financial data is generated and reported, as well as how it is used for decision making and analysis.
Finance for Non-Financial Personnel will help...
391 Words | 2 Pages
Managerial Finance - 1234 Words
Managerial Finance – Problem Review Set – Dividends Policy
If a firm adopts a residual distribution policy, distributions are determined as a residual after funding the capital budget. Therefore, the better the firm's investment opportunities, the lower its payout ratio should be.
Even if a stock split has no information content, and even if the dividend per share adjusted for the split is not increased, there can still be a real benefit (i.e., a higher...
1,234 Words | 6 Pages
Finance Analyst - 3816 Words
Section I: Corporate Governance & Stockholder Analysis
Task 1: Chief Executive Officer Analysis
1. Who is the CEO of the company? How long has he been CEO?
Peter L Lynch since 2004
2. If your firm is a family-run company, is the CEO part of the family? If not, what career path did the CEO take to get to the top? (Did he or she come from within the organization or from outside?) Winn-Dixie began as a family-run company, but with huge amounts of growth the company has outgrown its...
3,816 Words | 13 Pages
Finance and Prada - 639 Words
• Prada’s Financial State
– €1 billion of debt maturing within 12 months (almost half in the next six
– Prada also needed to raise capital to fund growth in Asia
• Capital Raising Objectives
– Fund Growth in Asia
– Increasing working capital to manage Strained cashflow for the coming
– Strengthen Prada’s balance sheet and provide financial flexbility
• Business Update
– Forecasts for the growth in the next five years (2011-2015) was 10-11...
639 Words | 16 Pages
Finance Review - 740 Words
The same income getting taxed multiple times.
Maximizing shareholder value
Management principle that implies that the ultimate measure of a company’s success is the extent to which it enriches its shareholders.
Initial Public Offering
Stock Launch – stock in a company is sold to the general public for the first time
Sole Proprietorship, Partnership, Corporation, LLC, Subchapter S Corp (Pros and Cons of each)
Simplicity and ease of operation...
740 Words | 4 Pages
Sources of Finance - 637 Words
Source of finance
Match the source with advantages and disadvantages
State if advantage/disadvnatage
ordinary share capital: money given to a company by shareholders in return for a share certificate, which gives them part ownership of the company and entitles them to a share of the profits
21.Increasing ordinary share capital can make it easier to borrow more funds from a bank as the share capital can purchase assets that can be used as collateral.
637 Words | 4 Pages
Finance and Debt - 300 Words
MM Propositions:In a world with no taxes, no transaction costs, and no costs of financial distress, is the following statement true, false, or uncertain? Moderate borrowing will not increase the required return on a firm’s equity. Explain.
MM Proposition II states that higher debt does not affect cost of capital of a firm. The reason is that the lower cost of debt is offset by a greater cost of equity, which means investors demand a higher return on equity as a result of the higher risk...
300 Words | 1 Page
Project finance - 5631 Words
Fuqua School of Business
The MM Proposition
What is a Project?
What is Project Finance?
Real World Cases
Project Finance: Valuation Issues
The MM Proposition
The MM Proposition
“The Capital Structure is irrelevant as long as the
firm’s investment decisions are taken as given”
Then why do corporations:
Set up independent companies to undertake
5,631 Words | 54 Pages
Principles of Finance - 845 Words
Practice Ethical Behavior
* The Institute of Management Accountants lists the principle of ethical behavior as the "...obligation to the public, their profession, the organization they serve, and themselves, to maintain the highest standards of ethical conduct" that include competence, confidentiality, integrity and objectivity.
Don't Risk Without Significant Return
* Risking profits for poorly designed projects violates a basic principle of financial management. The capital market...
845 Words | 4 Pages
Finance Case - 483 Words
The Venture Capital Division of Boeing has four projects on the table with three additional leverages of debt. As the financial analyst for the division I was given the task of evaluating the four capital budgeting projects. After evaluating each project I will recommend which project will bring the most value to shareholders and the firm.
What is the cost of equity for each project at 0, 20%, and 50% leverage?
From the information provided the cost of equity at 0, 20%, and 50%...
483 Words | 3 Pages
Public Finance - 878 Words
The purpose of this paper is to provide an overview of public finance and its philosophy. Public finance is a part of economics and related with those activities, which are associated with the payment of cooperative and governmental activities (Gaffney, 2008). Public Finance may also be also defined as a science because it deals with a definite and limited field of human knowledge; it admits of an orderly arrangement of its facts and principles and contains many laws of general progress...
878 Words | 3 Pages
Finance problems - 500 Words
Chapter 22: Dividend Policy
Multiple Choice Questions
1. When is the ex-dividend date if the holder of record date is April 14, 2006?
A. April 15
B. April 16
C. April 12
D. April 13
Level of difficulty: Medium
Ex-dividend date is the second business date before the holder of record date.
2. Which of the following statements about M&M assumptions is false?
A. There are no taxes.
B. Not all firms maximize value.
C. There is no debt.
D. Markets are perfect.
500 Words | 3 Pages
Sources of Finance - 9316 Words
Sources of Finance
It was explained in week 1 that this week’s lectures will focus primarily on institutions that provide finance. Finance has been defined by Chadwick and Kirkby (1995, p 38) in their book Financial Management (first edition, publisher Routledge) as a “system of costs and risks”. As we will see throughout the course, the notion of risk from an investor’s point of view is related to whether there is the accrual of the financial returns that are...
9,316 Words | 31 Pages
Corporate Restructure - 3061 Words
Corporate Restructuring-Motives and Methods
Corporate restructuring is one of the most complex and fundamental phenomena that management confronts. Each company has two opposite strategies from which to choose: to diversify or to refocus on its core business. While diversifying represents the expansion of corporate activities, refocus characterizes a concentration on its core business. From this perspective, corporate restructuring is reduction in diversification. This involves a significant...
3,061 Words | 11 Pages
Business Finance - 930 Words
Seminar Topic: Business Finance
1. What is the primary goal of financial management?
Maximizing cash flow
Maximizing shareholder wealth
Minimizing risk of the firm
all of these
2. In the past, the study of finance has included
all of these.
3. Professor Merton Miller received the Nobel prize in economics for his work on
930 Words | 11 Pages
Understanding Finance - 1720 Words
Finance is the allocation of assets and liabilities over time under conditions of certainty and uncertainty. A key point in finance is the time value of money, which states that a unit of currency today is worth more than the same unit of currency tomorrow. Finance aims to price assets based on their risk level, and expected rate of return. Finance can be broken into three different sub categories: public finance, corporate finance and personal finance.
1 Areas of finance...
1,720 Words | 6 Pages
Sources of Finance - 7797 Words
Introduction - Sources of Finance
Introduction to the Sources of Finance resource.
Sources of Finance
This resource is designed for use with Accounting courses at A' level. This resource is relevant to the following:
* AQA Module 5, Section 14.5: 'Types of Business Organisation, Sources of Finance'
* OCR Module 2505, Sections 5.3.2 and 5.6.2
For many businesses, the issue about where to get funds from for starting up, development and expansion can be crucial for the...
7,797 Words | 25 Pages
Finance for Life - 699 Words
Integrative—WACC, WMCC, and IOS. Cartwell Products has compiled the data shown in the following table for the current costs of its three basic sources of capital—long-term debt, preferred stock, and common stock equity—for various ranges of new financing.
Source of Capital Range of New Financing After Tax Cost
Long-term debt $0 to 320,000 6%
$320,000 and above
Preferred stock $0 and above 17%
Common stock equity $0 to $200,000 20%
$200,000 and above 24%...
699 Words | 4 Pages
Finance Quizzes - 1013 Words
Finance2 Quiz 2- Attempt 1
When the firm has a high retention ratio, thus paying low dividends, the dividend is a by-product of what kind of decision?
B. Capital budgeting
C. Debt policy
Last year's return on equity was 30 percent, and while the same amount of earnings was generated this year, the ROE has decreased to 20 percent. The firm has no preferred stock. What caused the decrease?
A. Equity decreased by 10 percent....
1,013 Words | 9 Pages
Managerial Finance - 483 Words
The financial activities regard running a corporation. In other words, Corporate Finance is mainly concerned with maximizing shareholder value through long-term as well as short-term financial planning along with the implementation of different strategies. Thus, this includes everything from capital investment decisions to investment banking falls under the domain of corporate finance.
On the other hand, the shareholders own a corporation or you could say corporations are owned by its...
483 Words | 2 Pages
Managerial Finance - 856 Words
Learning Session 1 Written Assignment
Chapter 1 Discussion Question 6
What document is necessary to form a corporation?
A corporation is formed through articles of incorporation, which specify the rights and limitations of the entity (Block, Hirt, & Danielson, 2011).
Web Exercise (pp. 22-23)
In summary, the credo for Johnson & Johnson challenges the company to put the needs and well-being of the customers first. The former chairman for the...
856 Words | 3 Pages
Sources of Finance - 876 Words
Often the hardest part of starting a business is raising the money to get going. The entrepreneur might have a great idea and clear idea of how to turn it into a successful business. However, if sufficient finance can’t be raised, it is unlikely that the business will get off the ground.
Importance of Finance
Finance is very important for business organisation . Finance includes planning of financial resources, making of optimum capital structure and effective utilization of...
876 Words | 4 Pages
Source of Finance - 3121 Words
Table of Contents
1. Identify and describe the various sources of finance
1.1 Internal source
1.2 External sources
2. Assess the implication of the difference sources of finance related to risk, legal, financial and dilution of control and bankruptcy
2.1 Issue debt
2.2 Issue equity
3. Select appropriate sources of finance and make recommendations on the best ways of raising finance
Part 1: Assess and compare various costs involve with...
3,121 Words | 12 Pages
Business Finance - 988 Words
Krakatau Steel expects to raise between Rp 2.52 trillion and Rp 3.63 trillion (US$406.5 million) from an initial public offering (IPO). Krakatau Steel would sell 3.15 billion new shares or about 20 % of the company’s enlarged stocks at a price range of between Rp 800(80 US cents) and Rp 1,150 a piece during the IPO. Danareksa Sekuritas, Mandiri Sekuritas and Bahana have been named co-underwriters of the IPO. The price-to-earnings (PE) ratio would be between 9.75 to 14 times in 2011...
988 Words | 3 Pages
Finance Notes - 3249 Words
Assignment No 1 (To be handed in Week 2)
See course package: Investment Analysis and Lockheed
Assignment No 2 (To be handed in Week 3)
QUESTIONS FOR MRC CORPORATION
What is the value today (end 1960) of American Rayon, assuming that the terminal value (in 1967) of the company's operating assets is equal to the book value of its invested operating capital (PPE + WCR) in 1967?
Do you agree with this assumption and can you provide some better alternatives...
3,249 Words | 42 Pages