...now trading at $37.41 and $78.69, which are both significant rises since five years ago. After finding the closing monthly stock prices for Wal-Mart, Microsoft and the S&P 500, as well as the monthly yield for a 30-year T-bond, we took their average for each to find the expected return. Respectively for Microsoft and Wal-Mart we found the expected returns were 1.54% and 0.88%. For Microsoft this is well above the benchmark of the S&P’s expected return, which was 1.30%, while for Wal-Mart it is well below the benchmark. We also found that Microsoft and Wal-Mart’s expected returns are higher than the average monthly yield of a 30-year T-bond, which is good because it shows they are outperforming a risk free asset. Following our calculation of expected return we went onto other risk and return measures like variance and covariance. The variances of Microsoft and Wal-Mart are 0.47% and...
Words: 682 - Pages: 3
...constant dividend growth model. Values: Beta = .60 Risk free rate = 3.13% Market risk premium = 7% Dividend declared per share = $1.60 2009 EPS = $3.65 2009 ROE = 28.00% Beta b = 1 – ($1.60 / $3.65) = .5616 Growth g = 28% × .5616 = 15.73% Risk adj. discount rate k = 3.13% + 0.60(7%) = 7.33% Present Value of divided stream P0 = $1.60(1 + .1573)2 / (.0733 – .1573) = ($25.52) I am really not capable of using the dividend growth model for my calculation since the required returned of $25.52 is lesser than the growth rate of 15.73. So, I squared the growth rate since the 2009 dividend is being used to see what the 2010 price of stock. 28. Using the P/E, P/CF, and P/S ratios, estimates the 2010 share price for Abbott Laboratories. Use the average stock price each year to calculate the price ratios. Average P/E CF P/S 5 yr avg. price ratio $17.08 $12.24 2.912 Current value per share $3.65 $ 4.95 $19.70 Growth rate 10.16% 9.82% 8.17% Expected stock price $68.68 $66.53 $62.06 Calculation of 17.08(1.1016)($3.65) 12...
Words: 1035 - Pages: 5
...the 8% interest rate into account, PPC’s actual cost of capital would be calculated as: [.08(1-.34)]= 5.28%. PPC has simply been using 10% (their equity growth rate) as their cost, but must instead either use the CAPM model to calculate their cost of equity, or the Dividend-growth model. If they use the CAPM model, which is the most accurate, their cost of equity will be: .078+.8(.1625-.078)=14.56%. Or they can use the Dividend-growth model and their cost of equity would be: (2.7/63)+.1=14.29%. Both are acceptable but, because the Dividend-growth model is subjective, and the coupon rate (that PPC was originally using is a sunk cost, they should use the market rate). Thus using the market rate to calculate CAPM you use the Beta and market risk premium which are both based on the market rate and more accurate. Finally, their company WACC of 9% that they have calculated is incorrect and...
Words: 346 - Pages: 2
...NIKE INC. CASE 14 Philip Chen, Choco Huang, Ariel Chou, Matt Krieger In this report we analyzed Cohen’s approach in calculating WACC. After observing how Cohen derived his figures we came up with our own WACC, terminal value, and EPS. Cohen broke down his calculations into five parts 1) Single or Multiple Costs of Capital 2) Proportion of capital from debt and equity 3) Cost of Debt 4) Cost of Equity 5) WACC In part one; we disagreed with Cohen where he decided to value the company as a whole instead of valuing each division separately. Since Nike is a multidivisional firm Cohen should of aggregated the values of the individual divisions and calculate a different cost of capital for each one. Since the exhibit 1 and 3 provide a consolidated income statement and balance sheet it is difficult to segregate the divisions. Therefore when we did our own calculations we used Cohen’s assumption of a single cost of capital. In part two Cohen allocated the weight of debt and equity based on book value. This method is incorrect because the allocation should be based on market value. The table below is our calculation of capital allocation. Table 1.1 | Price: Exhibit 4 | shares outstanding | Total | % of Capital | Debt | 95.60 | 271.50 | 25,955.40 | 69.43% | | | | | | | Price: Exhibit 2 | shares outstanding | Total | % of Capital | Equity | 42.09 | 271.50 | 11,427.44 | 30.57% | | | | 37,382.84 | 100.00% | Part 3 is the cost...
Words: 685 - Pages: 3
...and restaurant divisions of Marriott? Answer: The cost of capital for lodging is 9.2% and the cost of capital for restaurants is 13.1% Calculation: WACC = (1-t) * rd * (D/V) + re* (E/V) Where: D= market value of DEBT E = market value of EQUITY rd = pretax cost of debt re = aftertax cost of equity V = D+E t = tax rate To calculate the formula above, we need to determine each component Tax rate (t) 56% --> calculated before LODGING Step 1: Calculate unlevered beta using similar companies Weigh Unlever . Avg. ed Beta (βu) Sales Sales 0.70 0.77 23% 0.43 1.66 50% 0.40 0.17 5% 0.67 0.75 22% 3.35 Beta (β) Debt (D/V) E/V Hotel D/E Tax HILTON HOTELS CORPORATION 0.76 14% 86% 0.16 44% HOLIDAY CORPORATION 1.35 79% 21% 3.76 44% LA QUINTA MOTOR INNS 0.89 69% 31% 2.23 44% RAMADA INNS, INC. 1.36 65% 35% 1.86 44% Total Sales Calculate unlevered beta for the Marriott Lodging using Weighed Average of Sales βu = 23%*0.70+ 50%*0.43+5%*0.40+22%*0.67 βu lodging = 0.54 Note: βu = βe / (1+ (1-t) * D/E) Step 2: Re-lever the beta ( βl ) for lodging βl = βu * (1+ (1-t) * D/E) Use 74% debt target ratio --> Calculation βl = βu * (1+ (1-t) * D/E) βl = 0.54 * (1 + (1-0.44)*(.74/.26)) βl = 1.41 Calculation re = rf + β * (rm - rf) re = 8.95% + 1.41*7.43% re =19.4% Step 3: Calculate cost of equity (re) re = rf + β * (rm - rf) Where rf = risk free β = beta levered risk premium = rm - rf rm = market risk --> rf used is 8.95% since Marriotts uses the long-term debt for its lodging cost-of-capital...
Words: 1056 - Pages: 5
...companies overall. Janet Mortensen has been struggling with her calculations, wondering if her application is correct given the amount of grumbling she has heard. She has asked you, as experienced professionals, to analyze the company and the current economic data and to assess the cost of capital for the company and one of the company’s divisions. Ultimately, she wants to be able to answer to her company and staff: RAVI 1) What is the best way to estimate the company and divisions’ cost of capital? COST OF CAPITAL 2) Should it be calculated differently for different purposes?COST OF CAPITAL JAKE WILL COMPILE – everyone will send word write-up for their questions You should address your analysis to Ms. Mortensen and support your analysis for the cost of capital for the company and its divisions. WORD DOCUMENT I will play the role of Ms. Mortensen in assessing your analysis. The class members not presenting will play the role of interested staff, employees and board members. Questions to specifically address 1) KARI What is the appropriate risk-free rate to use in the WACC calculations? How did you arrive at this number? COST OF EQUITY 2) MARCUS What is the Market Risk Premium (EMRP) that is most appropriate to use in the calculation for the cost of equity? How did you arrive at that number? COST...
Words: 727 - Pages: 3
...strategies has financial costs and benefits. These are discussed below. 1) Ten per cent increase through efficiency The efficiency improvement strategy carries no costs and should yield 10 per cent on the bottom line, or about an additional $12,100 profit. The calculations are: $550,000 annual revenue x 2% margin = $11,000 net profits $11,000 net profit x 10% efficiency improvement = $1,100 $11,000 + 1,100 = $12,100 increase in net profits 2) Add adventure diving The adventure diving resort strategy will require about $15,000 to get started. It should yield about $95,680 additional revenue. The calculations are: 8 divers per trip x $115 for each diver = $920 revenue per trip $920 each trip x 2 dives per week - $1,840 revenue per week $1,840 revenue per week x 52 weeks = $95,680 annual adventure diving revenue 3) Focus on family diving The family diving resort strategy will cost $60,000 to $160,000 (in renovations and improvements) and should yield at least an additional $157,000 over current revenues, assuming no increases in prices. If Coral Divers raises its prices to equal other family resorts, the revenues should be even higher. Two methods of calculation are shown below. Method 1: Occupancy during high season is 90 per cent, so: 90% (“x”) = 0.90x [where “x” equals total seasonal revenue] And occupancy during low season is 50 per cent, so: 50% (“x”) = 0.50x [where “x” equals total seasonal revenue] ...
Words: 570 - Pages: 3
...whether a floor price and taxing on alcohol would benefit Thailand’s population and also whether the UK should trial similar ideas. A Simple Model for Demand To be able to work out the effect that the increase in demand will have on the annual consumption I would have to interpret the data given in the report. As we are told, the price per litre of alcohol is expected to increase by 60% to 2,500 Baht in 2013, I was therefore able to work out that in 2012 the average price of alcohol would have been 1,562.5 Baht per litre by doing the following calculation: 2500 / 160% = 1562.5 2500 / 160% = 1562.5 378 / 100 1.5 = 372.33 378 / 100 1.5 = 372.33 Moreover, as we were also told in the report the annual amount of alcohol consumed in 2012 was 378 million litres and that this is expected to decrease by 1.5% by 2013. I was able to calculate the predicted amount of litres of alcohol consumed by doing the simple calculation: An Equation for the Demand Curve The information that I have formulated above has allowed me to be able to calculate the gradient and more importantly the equation of the demand curve between Thailand’s annual consumption of...
Words: 889 - Pages: 4
...Step 4 Calculation * Step 11 Calculation * Step 15 Calculation * Step 17 Calculation * Step 19 Calculation * Summary of RF Behavior | 2 2 2 2 2 15 | Calculate each of the five measurements in the project.In your own words, summarize what you have learned concerning RF behavior from your calculations, readings, and research. | Case Project 4-3: MIMO (page 156) 25 points * Introduction * Advantages/Disadvantages * Applications * Future | 55510 | Discuss MIMO antenna technology, including history, advantages, disadvantages, current applications, and future. | Total | 50 | A quality paper will meet or exceed all of the above requirements. | Deliverables IMPORTANT: A report template is provided beginning on the next page, and you must use it to submit your assignment. Before submitting your assignment, delete the pages containing the instruction and rubric. Your submitted assignment should begin with the title page and only contain your report. Don’t forget to place your name, your professor’s name, and the date on the title page. Week 2 iLab Report Francisco Santoya DeVry University NETW360: Wireless Technologies and Services COMPUTE RF BEHAVIOR AND MIMO Submitted to: Professor: Jalinous Date: 9/11/13 Compute RF Behavior Calculate each of the five measurements in the project by performing every step in sequence. In your own words, summarize what you have learned concerning RF behavior. Calculations Step...
Words: 727 - Pages: 3
...CIST 1122 Homework Home PC Power Supply Calculation Date: 9-2-13 Mission objective: ALL LABS ARE TO BE COMPLETED INDIVIDUALLY UNLESS NOTED OTHERWISE! NO GROUP WORK! Examine your home PC and calculate the estimated consumption and the recommended power supply size. Phase 1: Calculations Use the chart on page 76. Complete the form below System Model and Type: Hp pavilion a705w OS Installed on System: Windows 2007 System Location: Office Device Quantity Appx Wattage Total Wattage Motherboard, Processor, memory, keyboard, mouse 5 500 watts Fan 1 5 watts Hard drive 2 60 watts CD-RW dive/Dvd 1 25 watts Device Quantity Appx Wattage Total Wattage Moderately priced video card 1 100 watts ___________________ ______ _______ __________ ___________________ ______ _______ __________ ___________________ ______ _______ __________ Total Estimated power consumption 690 watts + 30% = 897 watts Phase 2: Find a Power Supply Search a supplier for a replacement unit that will power your system, at the minimum power rating. You may have to round up on the power supply wattage to find a right match. Make sure you get the correct power connectors. You may use NewEgg.com or TigerDirect.com will work. Take a screen shot of the power supply with price and then attach it to lab below. Please include webpage address and ad in the same screen shot. [pic] Phase 3: Turn it in Once...
Words: 251 - Pages: 2
... Bank investments R 400 000 Motor vehicle R 400 000 R 300 000 R 250 000 Income tax R 84 000 Insurance portfolio: Death benefit Life cover benefit payable on death Life policy payable to the estate R2 500 000 Life policy payable to Juliette R3 100 000 Keyman policy owned by his employer R1 300 000 Retirement Annuity fund R2 200 000 In terms of Romeo’s Last Will and Testament, he leaves his residential property to his spouse and the residue of the estate to his child. Romeo’s marginal tax rate is 40% Question 1 (5 marks) Calculate the executor’s fees payable in the event of Romeo’s death. Show your calculations. Question 2 (10 marks) 2.1 Indicate which assets will not attract CGT in the event of Romeo’s death and explain why not. 2.2 Calculate the CGT payable in the event of Romeo’s death. Show all your calculations Question 3 (22 Marks) 3.1 Explain whether the Annuity proceeds payable on his death will attract estate duty. 3.2...
Words: 500 - Pages: 2
...More ... * Search the Archive * Browse by clinical topic * Browse by issue date * Awards * Nursing Times Awards * Student Nursing Times Awards * Patient Safety Awards * Care Integration Awards * Write for Us * Nursing events * Courses * Subscribe from overseas * Francis report * Nursing Practice * Nursing Times Learning * Opinion * Student Nursing Times * Jobs * Subscribe * You are here: Home * Clinical Zones * Medicine management How to ensure patient safety in drug dose calculation 12 October, 2012 Medicines management is a core nursing skill. This review gives an introduction to and taster of our newly launched online Nursing Times Learning unit on drug calculations. Keywords: Patient safety/Drug calculation/Medicines management * This article has been double-blind peer reviewed * Figures and tables can be seen in the attached print-friendly PDF file of the complete article in the ‘Files’ section of this page Medication incidents accoun-ted for 11% of all patient incidents reported to the National Reporting and Learning System (2012) in England and...
Words: 1837 - Pages: 8
...and e. will require that you use a financial calculator, given the complexity of the problems. There are several calculators on the internet. (See the Web Sites section of this site.) The key inputs are: interest rate, future value, number of annual payments, and amount of each payment. f. is another bonus opportunity (one point). For this bonus question, you have to make an assumption that, under annual compounding, the bank will pay interest on the mid-year payments, and the rate for those payments is that rate which produces an effective annual rate of 10.0 percent. 5. Same comments as for question 4 above, and again one bonus point is possible for f. Also, I couldn’t find a calculator on the web that would do ‘annuity due’ calculations (d. and e.); so you may have to use a real...
Words: 436 - Pages: 2
...with stamped drawings, you'll eventually need to do commercial load calculations in the field or on a licensing exam. The NEC covers commercial calculations in Art. 220, but other articles also apply. For example, you must know the definitions in Art. 100, be familiar with what Art. 210 says about continuous loads, and understand the overcurrent protection requirements set forth in Art. 240. Two items associated with this type of calculation repeatedly need clarification: * Voltage The voltage to use for your calculations depends on the system design voltage. Thus when you calculate branch-circuit, feeder, and service loads, you must use a nominal system voltage of 120V, 120/240V, 208Y/120V, 240V, 347V, 480Y/277V, 480V, 600Y/347V, or 600V unless otherwise specified (220.2) (Fig. 1 below). * Rounding Refer to 200.2(B) to end the rounding mystery. When the ampere calculation exceeds a whole number by 0.5 or more, round up to the next whole number. If the extra is 0.49 or less, round down to the next whole number. For, example, round 29.5A up to 30A, but round 29.45A down to 29A. Specific loads. Art. 220 doesn't cover all specific loads. For example, you'll find motors in Art. 430 and air conditioners in Art. 440. To know if you should look in another Article, use the NEC index. <b>Fig. 1.</b> Don’t make the mistake of using actual field measurements of system voltage in your calculations. Unless specified otherwise, loads shall be computed using the nominal...
Words: 1557 - Pages: 7
...Pediatric calculations Accurate doses are especially important in giving medications to infants and children because even small errors can be dangerous due to their small body size. Two methods are used to calculate pediatric dosages: According to the weight in kilograms (kg) According to the child's body surface area (BSA) Calculations based on body weight 1. The first step is to convert the child's body weight into kg. The formula is 2.2 lb. = 1 kg. 2. The second step is to calculate the medication dose. a. Calculate the daily dose b. Divide the daily dose by the number of doses to be administered. c. Use either the ratio-proportion or formula method to calculate the number of tablets/ capsules or volume to be administered with each dose. Example: A child weighing 76 lbs. is ordered to receive 150 mg of Clindamycin q6h. The pediatric drug handbook states the recommended dose is 8-20 mg/kg/day in four divided doses. The Clindamycin is supplied in 100 mg scored tablets. 1. What is the weight in kg? 76 lbs÷2.2kg/lb. = 34.5 kg 2. What is the safe total daily dose? Minimum: 8 mg/kg/day X 34.5 kg = 276 mg/day Maximum: 20 mg/kg/day X 34.5 kg = 690 mg/day 3. Is this a safe dose? 150 mg/dose X 4 doses/day = 600 mg/day Yes this is within the recommended safe range. 4. Calculate the number of tablets to give. 100 mg: 1 tablet = 150 mg: x (multiply means 100...
Words: 458 - Pages: 2
