...investment opportunity. ABC will cease to exist after the cash flows are realized and distributed to investors. Both states of the economy are equally likely. For these types of risky investments the market requires a 20% expected return on assets. The firm has no debt and there are currently 100,000 shares (0.1 mm) outstanding. Assume perfect markets (i.e., there are no taxes or transaction costs, no asymmetric information or incentive problems). a) Fill in the book value and market value balance sheets for ABC right now (before any financing is raised for the new project): Book Values: Market Values: | | | | | | Assets: 6 | D: 0E: 6 | | | Assets: 10 | D: 0E:10 | In parts b) through e), assume the firm finances the new project by issuing equity. b) If ABC issues new equity to fund the project, fill in the book value and market value balance sheets for ABC immediately after the financing is raised: Book Values: Market Values: | | | | | | Assets: 8 | D: 0E: 8 | | | Assets: 12 | D: 0E: 12 | c) What is the current price per share? 10/0.1=$100/share d) How many new equity shares does the firm need to issue? 2/100=0.02 million shares e) When the firm is liquidated next year, what are the...
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...Question: 1. Locate the annual balance sheets for General Motors (GM), Merk (MRK), and Kellogg (K). For each company calculate the long term debt-equity ratio for the prior two years. Why would these companies use such different capitals structures? 2. Look up a company and download the annual income statements. For the most recent year, calculate the average tax rate and EBIT, and find the total interest expense. From the annual balance sheets calculate the total long-term debts (including the portion due within one year). Using the interest expense and total long term debts, calculate the average cost of debt. Next, find the estimated beta for the company on the S&P Stock Report. Use this reported beta, a current T-bill rate, and the historical average market risk premium found in a previous chapter to calculate the levered cost of equity. Now calculate the unleveraged cost of equity, then the unlevered EBIT. What is the unlevered value of the company? What is the value of the interest tax shield and the value of the levered company. Answer: |Company name/Year |Debt-equity ratio 2010 |Debt-equity ratio 2011 | |General Motors (GM) |0.28 |0.31 | |Merck (MRK) |0.28 |0.28 ...
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...Advanced Corporate Finance [FN2] Examination Blueprint 2013/2014 Purpose The Advanced Corporate Finance [FN2] examination has been constructed using an examination blueprint. The blueprint, also referred to as the test specifications, outlines the content areas covered on the examination and the weighting allotted to each content area. This document also lists the topics, the level of competence for each topic, and the related learning objectives and competencies. The learning objectives have been designed to ensure that the competencies are met. In addition, information is provided on the proportion of each question type presented in the examination (that is, multiple choice, quantitative problems, and so on). Use Candidates should use the examination blueprint to prepare for the course examination. The blueprint may not include all the topics listed in the course materials; however, candidates are still responsible for acquiring a broad-based knowledge of all topics not listed in the blueprint since these topics will be tested in assignment and review questions. The topics not listed in the blueprint will also provide candidates with a greater depth of understanding of finance concepts. Examination Objectives The objective of the 4-hour comprehensive examination is to test CGA candidates on the prerequisite knowledge required for advancement into PA1 and PA2, so as to ensure that the candidates have the broad-based knowledge in finance needed to function properly in the association’s...
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...Grade Details - All Questions | 1. | Question : | (TCO C) Blease Inc. has a capital budget of $625,000, and it wants to maintain a target capital structure of 60 percent debt and 40 percent equity. The company forecasts a net income of $475,000. If it follows the residual dividend policy, what is its forecasted dividend payout ratio? (a) 40.61% (b) 42.75% (c) 45.00% (d) 47.37% (e) 49.74% | | | | Instructor Explanation: | Answer is: d Text: pp. 570-572 - Residual Dividends, Chapter 14 Capital budget $625,000 Equity ratio 40% Net income (NI) $475,000 Dividends paid = NI - (Equity ratio)(Capital budget) $225,000 Dividend payout ratio = Dividends paid/NI 47.37% | | | | Points Received: | 10 of 10 | | Comments: | | | | 2. | Question : | (TCO F) Chocolate Factory's convertible debentures were issued at their $1,000 par value in 2009. At any time prior to maturity on February 1, 2029, a debenture holder can exchange a bond for 25 shares of common stock. What is the conversion price, Pc? (a) $40.00 (b) $42.00 (c) $44.10 (d) $46.31 (e) $48.62 | | | | Instructor Explanation: | Answer is: a Chapter 19: pp. 770-774 Par value: $1,000.00 Conversion ratio: 25.00 Conversion price = Par value/Conversion ratio = $40.00 | | | | Points Received: | 10 of 10 | | Comments: | | | | 3. | Question : | (TCO B) Ang Enterprises has a levered beta of 1.10, its capital structure consists of 40 percent debt...
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...Northboro Machine Tools Corporation - Outline Wiley Belknap, Eric Huntermark, Zachary Jumba, Alexander Spoont, David Okwaisie 1) Background a) Founded in 1923 by two mechanical engineers (James North and David Peterboro), made take and armored vehicle parts during WW2 b) How do they make Money? i) By 1975, they “had developed a reputation as an innovative producer of industrial machinery and machine tools” which were sold mostly to local/regional firms ii) Incorporated CAD/CAM into production process which allowed machine presses to manufacture metal parts by responding to computer demands iii) By 1991, CAD/CAM accounted for 45% of sales, presses and molds = 40%, 2) Competition and Outside Pressure iv) CAD/CAM Industry (1) Faced a number of large competitors (GE, HP, Digital Equipment) (2) Aggressive Entry of Foreign Firms/Dollar rising 3) Northboro’s Response To declining revenues c) Devote a larger portion of R&D budget to CAD/CAM d) Corporate Restructuring #1 v) 1989 – sold two unprofitable lines of business, two plants, five leased facilities, and reduced personnel vi) Costs = 44 million e) Corporate Restructuring # 2 vii) Altered manufacturing Strategy, refocused sales and marketing, new procedures to further reduce staff and facilities viii) Cost = 60 million f) Total Restructuring in 1989/91 = 135...
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...La política económica Los subsidios en Argentina después la gran crisis financiera en 2001 Profesora:. Marta Caruso Clase: Historia Económica de America Latina (PEAL 369) Fecha: 31/10/2013 Nombre: Fabio Giacomo Müller El gobierno argentino usa un gran parte de los gastos públicos a los subsidios. Una cantidad alta mana a la financiación de los subsidios. En 2013 el parte de los subsidios en por ciento del PIB totaliza un 5%. Aún grandes cortes en 2011 y 2012 no impidió un gran crecimiento de los gastos en subsidios. La primera vez cuando yo reconocía ese situación era cuando compre billetes para vuelos a Iguazú. Encontré billetes y cuando yo quise comprarlos necesité ingresar mi numero y país de mi pasaporte. Después el precio subió una cantidad cuantiosa porque cambié la nacionalidad de Argentina a Alemán. Una cantidad que el estado paga por los residentes de Argentina para estimular el comportamiento de los consumidores. Después la crisis financiera en 2001 y la anulación del tipo de cambio fijado. El gobierno de kirchnerismo empezó a cambiar las facturas de servicios, que estaban en dolars, en Pesos Argentinos y se las congeló. Por la desvalorización rápida del Peso Argentino el ingreso de las tarifas congeladas no eran suficiente para cubrir los gastos. Por cuanto que el gobierno se hizo cargo a el déficit entre los ingresos de las tarifas congeladas y los costos de la facilitación, los subsidios subieron rápidamente. El gran crecimiento de la economía...
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...P(After stock dividend is paid) x (100,000 x 1.05) P(After stock dividend is paid) = $10.1 What will be the number of new shares to be issued for raising the new money? m1 x P(after stock dividend) = I – (NOI – D) m1 x 10.1 = 211,000 – (200,000 – 90,000), m1 = 10,000 shares 2. Companies A and B are essentially the same except the dividend policies. A B Outstanding shares 10,000 10,000 Net Operating Income $20,000 $20,000 Cost of capital 15% 15% Expected stock price at t=1 $23 $23 (Before dividend payment) Cost of new investment t=1 $50,000 $50,000 Dividend pay-out ratio 50% 0% What will be the equilibrium stock prices for both companies today (t=0)? How many new shares have to be issued to finance the investments for both firms? P0 = 23/1.15 = 20 A: m1xP(ex div) = I – (NOI-D) = 50,000 – (20,000 – 10,000) = 40,000 m1 = 40,000/22 = 1,818 shares B: m1 = 30,000/23 = 1,304...
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...Copyright © 2013 by McGraw-Hill Education. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. ISBN: 978-0-07-180360-1 MHID: 0-07-180360-2 The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-180359-5, MHID: 0-07180359-9. E-book conversion by Codemantra Version 1.0 All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps. McGraw-Hill Education eBooks are available at special quantity discounts to use as premiums and sales promotions or for use in corporate training programs. To contact a representative please visit the Contact Us page at www.mhprofessional.com. Trademarks: McGraw-Hill Education, the McGraw-Hill Education logo, 5 Steps to a 5 and related trade dress are trademarks or registered trademarks of McGraw-Hill Education and/or its affiliates in the United States and other countries and may not be used without written permission. All other trademarks are the property...
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...Interface * Intra-LTE (Intra-MME/SGW) Handover Using the S1 Interface * Handover Measurements * Handover Optimization and Design Principles * Handover Parameters * Handover Evaluation Mechanisms * Handover Failures in LTE * Conclusion. References: 1. Han, J., & Wu, B. (2010, October). Handover in the 3GPP long term evolution (LTE) systems. In Mobile Congress (GMC), 2010 Global (pp. 1-6). IEEE. 2. Iñiguez Chavarría, J. B. (2014). LTE Handover performance evaluation based on power budget handover algorithm. 3. Rao, V. S., & Gajula, R. (2010). Interoperability in LTE. White Paper Continuous Computing, published in webbuyersguide. com. 4. Cox, C. (2012). An introduction to LTE: LTE, LTE-advanced, SAE and 4G mobile communications. John Wiley & Sons. 5. Kreher, R., & Gaenger, K. (2010). LTE signaling: troubleshooting and optimization. John Wiley & Sons. 6. Network, E. U. T. R. A. (2011). S1 Application Protocol (S1AP)(Release 10). *More...
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...computer teacher at Garfield High School in downtown Los Angeles, California. To his surprise, the school lacked the computers he needed for the class, so he took an alternative position as a math teacher. In that first year of teaching, Mr. Escalante was confronted with many obstacles. The school was in the verge of loosing its operative certification; many students scored poorly in their academics, had problems with drugs or were involved in gang violence. As a new teacher, he constantly felt frustrated, with a sense of guilt for not inspiring his class to love math the way he did. Subsequently, and against all the odds, Mr. Escalante made a great contribution in the lives of students, and transformed the face of the College Board’s Advanced Placement Program® (AP®). Most...
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...OMNITEL PLAN 1) OPERATING MARKET: Market sector: Telecommunication After the collapse of Soviet Union in 1991 the first Lithuanian telecommunication company was organized by two Lithuanian entrepreneurs -Doctor of Economics J. P. Kazickas and Victor Gediminas Gruodis. Today JSC “OMNITEL” is recognized as the leading mobile communication service provider in the Baltic countries. From 2004 the company was joined to international telecommunication and network service provider SC “TeliaSonera” which is considered to be listed in Europe’s 5th largest telecom operators. According to the Communications Regulatory Authority (CRA) in 2010 in the latest quarterly report Omnitel in revenue covered: * 35.4% of the Lithuanian mobile market * 39.7% of active subscribers * 56.7% of Lithuanian mobile broadband PC market Omnitel Businesses: GSM mobile services, mobile Internet access and integrated data transmission solutions. JSC „Omnitel“ activities includes data transfering, GPRS ( General Packet Radio Service), web services, mobile and radio service, voice transfering. 2) COMPANIES ORGANIZATIONAL STRUCTURE: (gavau informacija is draugu, kurie ruose diploma apie omnitel) Company constantly improves and develops the organizational structure towards horizontal one, thus ensuring the optimum flow of information from top management to the lowest level of management. However, the detailes of organizational structure of the company are not publicized. ( neisitikinus...
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...Group C1 Case Study D: M-Commerce Definition: Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device Question 1: What is the “8-second-rule” of the internet and why is it important to the m-commerce technology? 8 second rule: a webpage has to be loaded completely in less than 8 seconds in order not to bother internet users who feel frustration while they are waiting Application to the m-commerce technology: since it is a new technology and we will see that users have many concerns about it, phone service providers need to offer fast connection Especially since the current technology isn’t stable and reliable enough, especially in big western cities where it is most important Question 2: Why might it be useful to m-commerce providers to have records of their users’ purchase histories? Through the use of cookies during online navigation, users are “customizing” their use of the internet which allows them to have quicker and easier navigation (automatically fulfilled) This also allows providers to get a lot of information about customers Three main purposes of having records: * Customer Relationship Management * Targeted advertising * Geographic localization Question 3: What is the biggest concern most cell phone users have about using m-commerce services? What are some other...
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...require remedial work. Advanced Placement Test (AP) High school students, who are high achievers, have an option to take AP classes. The College Board requires that the AP class be taken by an accredited school and the courses have to be approved and audited by the College Board. Only the approved sites are able to use the "AP" designator on the transcript "Authorization to use the "AP" designation for your course. http://www.collegeboard.com/html/apcourseaudit/faq.html However, a home school educator can create an account on the AP Course Audit homepage at the College Board website. Once the account is created, submit the course material and course syllabus to be evaluated and pre-approved. AP is graded on a simple 5-point scale. Each university has their own guideline of which AP classes to accept and what grade level is required. Before taking the AP course, check with the Universities for their rules. The point-scale for the AP exam ranges from 1 to 5. 5 - Exceptionally qualified to receive college credit 4 - Qualified to receive college credit 3 - Qualified to receive college credit, although a 3 is not accepted by most colleges. 2 - Could possibly be qualified to receive college credit (keep in mind that almost no college will accept a score of 2) 1 - Not recommended to receive college credit There are 37 AP courses offered each May around the country. Remember that homeschoolers can only label courses as “Advanced Placement” on their high...
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...FINA - 010 Intel: Managing Working Capital Introduction op y In early 2004, Intel was the undisputed leader in the microprocessor industry with about 90% market share. Since 1968 when it was founded, Intel had launched many groundbreaking products. By 2004, it had 450 products and services ranging from the ubiquitous PC microprocessors like Pentium, the 64-bit high-end Itanium 2 to mobile computing chipsets such as Centrino. Intel ended 2002 with revenues of $ 26.7 billion. Many analysts believed Intel’s success was as much about technology as about management. They attributed the success of Intel to its unbroken leadership chain. As one great leader retired, another took over. While Intel was well known for innovation, it had also attempted to be a disciplined company that maximized operational efficiency. Intel realized that as competition intensified, working capital management would become increasingly important. Exhibit: I Intel, Corporate Snapshot 1968 78,000 $26.7 Bill over 450 65 INTC N ot C Year founded: Number of employees: Revenues (2002): Products and services: Fortune 500 ranking: Stock symbol: Worldwide offices and facilities: 294 Source: Intel, corporate website www.intel.com D o Corporate Background A popular story which went around in Intel was that one weekend afternoon in the spring of 1968, Gordon Moore (Moore) dropped by Robert Noyce's (Noyce) home. The two decided to launch a new company to pursue large-scale integrated (LSI) memory. That...
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...w w w e tr .X m eP UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS GCE Advanced Level e ap .c rs om MARK SCHEME for the May/June 2011 question paper for the guidance of teachers 9707 BUSINESS STUDIES 9707/31 Paper 3 (Case Study), maximum raw mark 100 This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes must be read in conjunction with the question papers and the report on the examination. • Cambridge will not enter into discussions or correspondence in connection with these mark schemes. Cambridge is publishing the mark schemes for the May/June 2011 question papers for most IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses. Page 2 1 Mark Scheme: Teachers’ version GCE A LEVEL – May/June 2011 Syllabus 9707 Paper 31 Analyse the advantages and disadvantages for AC of greater use of electronic methods of communication. [10] Knowledge 3 marks Level 2 3 marks Two or more relevant points made or one point made plus knowledge of communication shown. 1–2 marks One relevant point made or knowledge of communication shown. Application 2 marks 2 marks Points made are well...
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