...DUKE UNIVERSITY Fuqua School of Business FINANCE 251F/351 Individual Assignment #1 Cost of Capital at Ameritrade Prof. Simon Gervais Spring 2010 – Term 1 In this case, you have to use data from comparables to estimate the cost of capital at Ameritrade. The process involves a few stages that this handout will guide you through. First, we need to determine which set of firms to use as comparable firms. You should try two different sets. The first set will include three discount brokerage firms: Charles Schwab Corp, Quick & Reilly Group, and Waterhouse Investor Services.1 The second set will include six investment services firms: A G Edwards, Bear Sterns, Merrill Lynch, Morgan Stanley Dean Witter, Paine Webber, and Raymond James Financial. Stock price and return data for these nine firms are provided in a separate spreadsheet that you can download from the course schedule at www.duke.edu/∼sgervais. In fact, this spreadsheet contains all six exhibits contained in the case. To estimate the equity beta for each of these firms, you will need to perform a regression of their past returns on past market returns (only the slope of this regression is useful for your analysis, i.e., there is no need to calculate/report on anything else). For this purpose, let us use monthly data from January 1992 through December 1996, that is, five years of monthly data as is the norm in practice.2 As you will see in Exhibit 5, the data for the discount brokerage firms includes stock price, dividend and stock split...
Words: 1160 - Pages: 5
...DUKE UNIVERSITY Fuqua School of Business FINANCE 251F/351 Individual Assignment #2 Sampa Video, Inc. Prof. Simon Gervais Spring 2010 – Term 1 In this case, you have to assess the viability of the home-delivery project that Sampa Video is considering. You are asked to do your analysis using WACC, and then using APV. In both cases, you can use the data in Exhibit 2 to calculate the unlevered free cash flows of the project. Assume that these unlevered free cash flows will grow at 5% per year in perpetuity following the year 2006; that is, if you calculate the unlevered free cash flow to be UFCF2006 in 2006, the unlevered free cash flow will be UFCF2006(1.05)t−2006 in year t = 2007, 2008, . . . When calculating the project’s value using WACC, assume that the target debt-to-value ratio of the project is 25%, and that the firm will borrow at a rate of 6.8%, as suggested in Exhibit 3. When calculating the project’s value using APV, assume that Sampa Video will initially borrow $1.5 million at a rate of 6.8% to start the project. However, assume that at the end of every year for the first five years, Sampa Video will repay $150,000 in principal (in addition to the interest on the outstanding loan) and reduce the value of the outstanding loan to $750,000 at the end of 2006. After that, assume that Sampa will keep the debt at that level (of $750,000 outstanding) in perpetuity. For your calculations with both WACC and APV, do your analysis with two different assump- ...
Words: 848 - Pages: 4
...30 Research Tools and Resources in DCCCD Libraries http://www.dcccd.edu/databases A: Six Essential Finding Tools That Everyone Should Know Well 1. The Library Catalog (thelibrarycatalog.com) – The key to the entire contents of the DCCCD Libraries. 2. The Choose a Database Page – A gateway to the DCCCD’s extensive collection of digital resources (dcccd.edu/databases). 3. Academic Search Complete (Ebscohost) – The DCCCD’s largest single database of articles. Includes full text articles from nearly 8,000 magazines and journals in all disciplines. Some newspapers. 4. Serials Solutions - The answer to "where is that journal title I'm looking for?" 5. Gale Virtual Reference Library - An alternative to Wikipedia. Citable articles from specialized subject encyclopedias in full text on the Web. 6. Google and Its Subsets (Advanced, Books, Scholar, Directory, Uncle Sam, Google Dictionary). B: The Traditional Library 7. Library of Congress Classification System Your guide to systematically browsing the library shelves. 8. Physical books and e-books (NetLibrary) E-books allow full text searching. Physical books allow bathtub reading. 9. WorldCat - A tool for finding almost any resource published (except for articles) - many available in nearby libraries (not just in the DCCCD) C: Online Databases: The Choose a Database Page listed in A is the starting point (dcccd.edu/databases). 10. CQ Researcher - The best single source for analysis of current and controversial...
Words: 4225 - Pages: 17
...Marketing Management 14 PHILIP KOTLER Northwestern University KEVIN LANE KELLER Dartmouth College Prentice Hall Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editorial Director: Sally Yagan Editor in Chief: Eric Svendsen Executive Editor: Melissa Sabella Development Editor: Elisa Adams Director of Editorial Services: Ashley Santora Editorial Project Manager: Kierra Bloom Editorial Assistant: Elizabeth Scarpa Director of Marketing: Patrice Lumuba Jones Senior Marketing Manager: Anne Fahlgren Senior Managing Editor: Judy Leale Production Project Manager: Ann Pulido Senior Operations Supervisor: Arnold Vila Creative Director: John Christiano Senior Art Director: Blair Brown Text and Cover Designer: Blair Brown Lead Media Project Manager: Lisa Rinaldi Editorial Media Project Manager: Denise Vaughn Full-Service Project Management: Sharon Anderson/BookMasters, Inc. Composition: Integra Printer/Binder: Courier/Kendallville Cover Printer: Lehigh-Phoenix Color/Hagerstown Text Font: 9.5/11.5, Minion Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text. Copyright © 2012, 2009, 2006, 2003, 2000 Pearson Education, Inc., publishing as Prentice Hall, One Lake Street, Upper Saddle River, New Jersey 07458. All...
Words: 8292 - Pages: 34
...DCC-GARCH Model Yang Ding Andrew Schwert Dr. Emma Rasiel & Professor Aino Levonmaa, Faculty Advisors Honors thesis submitted in partial fulfillment of the requirements for Graduation with Distinction in Economics in Trinity College of Duke University Duke University Durham, North Carolina 2010 Acknowledgements We would like to thank Dr. Emma Rasiel and Professor Aino Levonmaa for their invaluable direction, patience, and guidance throughout this entire process. Abstract The goal of this paper is to investigate the forecasting ability of the Dynamic Conditional Correlation Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH). We estimate the DCC’s forecasting ability relative to unconditional volatility in three equity-based crashes: the S&L Crisis, the Dot-Com Boom/Crash, and the recent Credit Crisis. The assets we use are the S&P 500 index, 10-Year US Treasury bonds, Moody’s A Industrial bonds, and the Dollar/Yen exchange rate. Our results suggest that the choice of asset pair may be a determining factor in the forecasting ability of the DCC-GARCH model. I. Introduction Many of today’s key financial applications, including asset pricing, capital allocation, risk management, and portfolio hedging, are heavily dependent on accurate estimates and well-founded forecasts of asset return volatility and correlation between assets. Although volatility and correlation forecasting are both important, however, existing literature has...
Words: 7879 - Pages: 32
...Class of 2014 First-Year Professional Development Timeline Ongoing Check email, the Career Center webpage and the Professional Development Resource Center (PDRC) for updates at least weekly. Review and regularly re-assess your personal professional network. Review legal & business media sources, including market-specific publications, both for subject matter content and possible points of connection. Attend and participate in the Career Center’s required first-year curriculum. Engage with the Law School and broader legal community to: o Master key laws and current challenges in your practice area of interest; o Strengthen core skills needed to demonstrate your commitment to qualification for a career in your desired field; and o Create advocates invested in your professional success by actively pursuing intentional relationships. October 2011 Prepare your best legal resume, utilizing the guidance and resources provided in this Manual. Prepare your “baseline” cover letter for legal positions utilizing the guidance and resources provided in this Manual. Attend Foundations of Professional Development presentation to which you are assigned by LARW section. o Receive and review your copy of the Class of 2014 Career Planning Manual. o Receive and review the eight-session, required curriculum for all firstyears. o Receive and review the list of summer opportunities accepted by members of the Class of 2013 as first-years. o Receive and review the abbreviated professional...
Words: 34853 - Pages: 140
...MORGAN NORTH STANLEY RESEARCH AMERICA Morgan Stanley & Co. LLC Adam S. Parker, Ph.D Adam.Parker@morganstanley.com +1 212 761 1755 Brian T. Hayes, Ph.D Brian.T.Hayes@morganstanley.com Antonio Ortega Antonio.Ortega@morganstanley.com November 26, 2012 Adam J. Gould, CFA Adam.Gould@morganstanley.com US Equity Strategy The 2013 Playbook We are launching our 2013 US equity outlook today. We have been cautious on US equities for much of the last two years. Our concerns around US deficit / debt and the obvious borrowing from the future that occurs from unconventional policy, the European sovereign crisis, and slower growth in emerging markets generally remain, but the acuteness of these issues appears for now to be less sharp. Our 2013 year-end target calls for low-to-mid single digit upside (Exhibit 1) predicated on our view that 2014 corporate earnings are likely to modestly recover from our 2013 forecasted level, perhaps with profits troughing during the April 2013 earnings season. Our year-end 2013 S&P500 price target is 1434, and our bull and bear targets are 1733 and 1135 (Exhibit 1). Our EPS outlook for 2014 is $110.21, up from our 2013 forecast of $98.71, both well below consensus. Improving Michigan Confidence and tightening corporate spreads drive the relative improvement in our earnings outlook. Please see our Interactive Model: S&P500: 2013 Year-End Forecast, also published today, to play with key assumptions and change assumptions for EPS...
Words: 21028 - Pages: 85
...Table of Contents Introduction/Executive Summary Page 1 Shorting CDO’s Page 1-2 S.E.C. Investigations Page 2-3 A.I.G. Page 3-4 Greece Debt Page 4 Conclusion Page 4-5 Best of the Worst ` Goldman Sachs, the famous investment company, is universally acknowledged as a super star on Wall Street and has been honored with a great reputation for its incredible profitability. However, as a symbol of Wall Street, Goldman has also been featured in greedy and sophisticated traits by numerous critics. The events of 2008 and the recent Greek debt crisis have brought to the public’s attention the dangers of moral hazard and its implications. Some investors have said that one can always see Goldman’s figure in a financial crisis. Indeed, in the latest two destructive financial crisis-the US subprime crisis and European Debt crisis, Goldman Sachs played significant roles in contributing to both and was publicly blamed to be fraudulent. One of the main examples of Goldman Sachs involvement in the subprime mortgage crisis was their formation of various Collateralized Debt Obligations (CDO’s) which demonstrated conflicts of interest, ultimately landing in Goldman’s favor rather than their clients. Starting in 2006 with the Hudson Mezzanine synthetic CDO, comprised of asset backed securities of Goldman’s inventory and single name CDS contracts on subprime Residential Mortgage Backed Securities (RMBS) and CDO securities Goldman...
Words: 1813 - Pages: 8
...Kale(1985) & Black(1986) |If traders trade on “noise” signals, unrelated to fundamental data, then share price can deviate from intrinsic value. | | |Shleifer (2000) |Two major foundation of behavioral finance: | | |Limited arbitrage | | |Investor sentiment | |Shleifer (2000) |Investor sentiment is mainly driven by two phenomena: | | |The tendency of people to view events as representative of some specific | | |class and ignore the laws of probability in the process | | |And conservatism. | |Lee, Shleifer & Thaler (1991) |CEFD suggest that as the discount increase, retail investor sentiment | | |decrease. | |Barber, Odean and Zhu(2006)...
Words: 3861 - Pages: 16
...All About Asda What we love about 2010 ASDA 08 A Sustainable Business 09 Business Strategy 10 11 12 13 14 15 16 17 Our Food Our Brands Our Home & Leisure Our Clothing Brand - George Our Format Portfolio Our Digital Business Our Openings & Extensions Our Five Year Summary Our purpose at Asda is simple..Quis aliquatie volor sustrud tio delent num eu Contents faci blandit, se dunt vent luptatue voluptat wiscincipis dolestrud modolore We magna aliquatem zzrit vercil dolor adipsum quat am quat nim nisl 02 WhoAsdaAre ut veliquate 03 The Story feuisis delese volobore conse do dit am, quamconse vel et ad tate04 The Walmartfeum magna Family 06 What We Love About Asda veriureet niatem v xx Business Review Pack 2010 Who We Are Our Mission To be Britain’s best value retailer exceeding customer needs, every day Our Purpose To save everyone money, every day Our Values We put our customers first, every day We care for our colleagues, every day We strive to be the best we can be, every day 02 All about Asda 2010 The ASDA Story The Reign of Queen’s Supermarkets Peter Asquith and his brother Fred made contact with Associated Dairies and a new company was formed... Asquith + dairies = the birth of Asda The Foundation of George A major success of this period was the foundation of the George Davies partnership and the introduction of George clothing into 65 stores in February 1989 Asda Became part of the Walmart Group in June 1999 The Digital Age The end of the decade...
Words: 4144 - Pages: 17
...Citation: 1989 Duke L.J. 27 1989 Content downloaded/printed from HeinOnline (http://heinonline.org) Mon Dec 3 16:27:50 2012 -- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and Conditions of the license agreement available at http://heinonline.org/HOL/License -- The search text of this PDF is generated from uncorrected OCR text. -- To obtain permission to use this article beyond the scope of your HeinOnline license, please use: https://www.copyright.com/ccc/basicSearch.do? &operation=go&searchType=0 &lastSearch=simple&all=on&titleOrStdNo=0012-7086 FAIRNESS OPINIONS: HOW FAIR ARE THEY AND WHAT CAN BE DONE ABOUT IT? LucIAN ARYE BEBCHUKt AND MARCEL KAHAN* INTRODUCTION Fairness opinions have become a regular feature of every major corporate control transaction. Whether in negotiated mergers,1 freeze-out mergers, 2 hostile tender offers, 3 friendly tender offers,4 self-tenders, 5 leveraged buyouts, 6 negotiated share repurchases, 7 or negotiated sales of treasury stock,8 directors seek the blessing of investment banks before approving transactions or adopting defensive measures. These banks give their blessings in the form of fairness opinions, which usually consist of short letters that state an opinion about whether a proposed transaction is "fair" or "adequate." 9 In addition, the banks often give presentat Professor of Law, Harvard Law Schaool; Faculty Research Fellow, National Bureau of Economic Research. * Visiting John M. Olin Scholar...
Words: 14271 - Pages: 58
...Welcome to the Samsung Global Strategy Group I. Samsung Overview II. Introduction to the Global Strategy Group (GSG) III. GSG & You IV. Korea & Seoul I. Samsung Overview I. Samsung Overview (Revenue & Global Presence) Fast growth and vast global footprint Samsung Group Revenue ※ Billion US Dollars Global Operations 318 369,000 employees worldwide 510 offices and facilities in 79 countries 141 87 226 Electronics 80 Samsung 22 1997 2005 2012 4 I. Samsung Overview (Leading Products) 5 I. Samsung Overview (Leading Products) 6 I. Samsung Overview (Brand Value) Samsung ranked 9th among global companies in 2012 7 I. Samsung Overview (Total 29 Affiliates Companies) The Samsung Group consists of many different business units Electronics Industry Electronics Engineering & Heavy Industry C&T Corporation Engineering Financial Services Life Insurance Fire & Marine Insurance Samsung Card Securities Asset Management Venture Investment Chemical Cheil Industries Inc. Petrochemical Fine Chemicals BP Chemicals Total Other Companies Cheil Worldwide Everland Inc. The Shilla Hotels & Resorts Economics Research Institute S1 Corporation Medical Center BioLogics SDS Heavy Industries Electro-Mechanics Techwin SDI Display Corning Precision Glass Bioeps 7 Affiliates 3 Affiliates 6 Affiliates 5 Affiliates 8 Affiliates 8 I. Samsung Overview (SEC Biz. Division) HME : Health Medical...
Words: 5322 - Pages: 22
...Table of Contents EXECUTIVE SUMMARY 1 INTRODUCTION TO ENGRO PAKISTAN 2 FOOD INDUSTRY IN PAKISTAN 3 ENGRO FOODS 3 RESEARCH AND DEVELOPMENT AT ENGROFOODS 4 STRATEGIC INTERNAL AND EXTERNAL AUDIT 4 STEEPLE ANALYSIS 4 PORTER’S FIVE FORCES MODEL 6 THREAT OF NEW ENTRANTS 6 BARGAINING POWER OF SUPPLIERS 7 BARGAINING POWER OF BUYERS 7 AVAILABILITY OF SUBSTITUTES 7 COMPETITIVE RIVALRY 8 SWOT ANALYSIS 8 STRENGTH 8 WEAKNESSES 9 OPPORTUNITIES 10 THREATS 11 INDUSTRIAL SWOT ANALYSIS 12 IFA AND EFA FOR ENGROOFOODDS 15 COMPETITIVE PROFILE MATRIX (CPM) 17 CORE COMPETENCIES & KEY SUCCESS FACTORS 18 COMPETITIVE ANALYSIS 19 INTERNAL EXTERNAL (IE) MATRIX 20 GRAND STRATEGY MATRIX 21 SUGGESTIONS AND RECOMMENDATIONS 22 REFERENCES 23 Executive Summary The repot at hand provides useful overview about Engro Pakistan Ltd, a private fertilizer firm that keeps about 22 % of market share in the milk food industry Pakistan, established in 2005, a 100% owned subsidiary –First investment of dairy plant Processed milk market is growing at approx: 20% per year. Olper’s achieved peak market shares of 12.3% within 6 months of launch. Other products are launched such as –Olper’s Cream, OLwell –High Calcium Low Fat Milk (Premium Brand) Plans to expand product portfolio Milk processing capacity to increase by 200 million liters annually will become the only company in Pakistan covering the entire milk catchments area. It already has the 2ND largest cooled milk collection system in the country. Distribution network...
Words: 5753 - Pages: 24
...Walmart Case Study Beth R. Thornhill Organization The relevance of choosing Walmart lies in their enormous growth and their strategies to be and maintain their competitiveness in the free-market. Some of their strategies were outlined by San Walton, founder of Walmart include: Sam Walton’s strategy of, “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life.” (Walmart.com) Background on Walmart Walmart serves customers and members more than 200 million times per week at more than 10,130 retail units under 69 different banners in 27 countries. With fiscal year 2012 sales of $443 billion, Walmart employs 2.2 million associates worldwide. Walmart was founded in 1962, with the opening of the first Walmart discount store in Rogers, Ark. The company incorporated as Wal-Mart Stores, Inc., on Oct. 31, 1969. The company's shares began trading on OTC markets in 1970 and were listed on the New York Stock Exchange two years later. The company grew to 276 stores in 11 states by the end of the decade. In 1983, the company opened its first Sam’s Club membership warehouse and in 1988 opened the first supercenter -- now the company’s dominant format -- featuring a complete grocery in addition to general merchandise. Walmart became an international company in 1991 when it opened its first Sam's Club near Mexico City. (Walmart.com) Background on Walmart Strategy Traditionally, Walmart...
Words: 4430 - Pages: 18
...Chapter 1 An Introduction to Project, Program, and Portfolio Management LEARNING OBJECTIVES After reading this chapter, you will be able to: Understand the growing need for better project, program, and portfolio management Explain what a project is, provide examples of projects, list various attributes of projects, and describe project constraints Describe project management and discuss key elements of the project management framework, including project stakeholders, the project management knowledge areas, common tools and techniques, and project success factors Discuss the relationship between project, program, and portfolio management and their contribution to enterprise success Describe the project management profession, including suggested skills for project, program, and portfolio managers, the role of professional organizations like the Project Management Institute, the importance of certification and ethics, and the growth of project and portfolio management software 2 OPENING CASE Doug Milis, the Chief Executive Officer (CEO) of Global Construction, Inc., was summarizing annual corporate highlights to the board of directors. Like many other large construction companies, they had a very difficult year. They had to scale down operations and let some employees go. When one of the board members asked what he was most proud of that year, Doug thought for a few seconds, and then replied, “Excellent question, Gabe. Honestly, I think the main reason we survived this...
Words: 12765 - Pages: 52
