...Question 3: Create a financial analysis of Santiago’s choices and use it to make a recommend a solution to his problem. - Phân tích trường hợp cần USD của ông Santiago: Ông Santiago là một người kinh doanh dược phẩm, công việc của ông yêu cầu một nguồn cung đô la lớn để thanh toán các đơn đặt hàng. Tuy nhiên trong thời gian Tổng thống Venezuela Hugo Chavez cầm quyền và đưa ra các chính sách thay đổi trên các lĩnh vực kinh tế, tài chính cụ thể là kiểm soát vốn làm những người kinh doanh như ông Santiago khó có thể tiếp cận được nguồn đô la cần thiết. Ông Santiago đã tham gia kêu gọi phản đối Tổng thống Chávez do đó bị CADIVI không cho phép hoán đổi đồng Bolivar (đồng tiền của Venezuela) thành Đôla. Trong khi đó, Santiago có một hợp đồng phải thanh toán 30.000 đôla Mỹ các sản phẩm dược từ các nhà cung cấp Mỹ. Do không mua được Đô la từ CADIVI ông đã buộc phải tìm kiếm nhiều các nguồn thay thế nhằm thực hiện nghĩa vụ thanh toán bằng đồng Đô la của mình, mặc dù các cách thức này tốn kém hơn và không hợp pháp. Kể từ khi chính sách kiểm soát vốn được ban hành, việc tìm kiếm mua bán đồng đô la đã trở thành hoạt động hàng tuần của Santiago. Ngoài con đường chính thống mua bán đồng đô la qua CADIVI, Santiago còn có thể mua bán đồng đôla thông qua thị trường chợ đen và thị trường xám với mức giá cao và chứa đựng nhiều nguy hiểm tiềm ẩn. - Ngày 10.03.2004, Santiago đã nhận được CADIVI cho phép mua 10.000 đô la với tỷ giá chính thức Bs1920/USD, đồng thời Santiago sẽ phải trả cho CADIVI...
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...Chapter 1 ------------------------------------------------- An Overview of Corporate Finance and ------------------------------------------------- The Financial Environment MINI CASE ------------------------------------------------- Assume that you recently graduated with a degree in finance and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle Dellatorre, a professional tennis player who has just come to the United States from Chile. Dellatorre is a highly ranked tennis player who would like to start a company to produce and market apparel that she designs. She also expects to invest substantial amounts of money through Balik and Kiefer. Dellatorre is also very bright, and, therefore, she would like to understand, in general terms, what will happen to her money. Your boss has developed the following set of questions which you must ask and answer to explain the U.S. financial system to Dellatorre. ------------------------------------------------- a. Why is corporate finance important to all managers? Answer: Corporate finance provides the skills managers need to: (1) identify and select the corporate strategies and individual projects that add value to their firm; and (2) forecast the funding requirements of their company, and devise strategies for acquiring those funds. ------------------------------------------------- ...
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...A. 1. Right to share income and assets 2. Control of the firm 3. Preemptive right 4. Voting Right B. Free cash flow (FCF) represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base. Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value. Without cash, it's tough to develop new products, make acquisitions, pay dividends and reduce debt. All else equal, the WACC of a firm increases as the beta and rate of return on equity increases, as an increase in WACC notes a decrease in valuation and a higher risk. The cash flow valuation model is Free Cash Flow = Net Income + Depreciation + Deferred Taxes – Dividends Paid- Capital Expenditures C. D. E. 1. F. 1. O. rs = = 7% + (12% - 7%)(1.2) = 7% + (5%)(1.2) = 7% + 6% = 13% P. D1=2*1.06=2.12 D2=2.2472 D3=2.3820 2. D1/rs-g=2.2472/0.13-0.06=$32.1 3. Dividend Yield =Dn/pn-1=7% R =13% Expected capital gains yield = r- Dn/pn-1=6% Q. 2.12/30.29+0.06 = 13% R. P0=46.66 Expected dividend yield= 2.6/46.66 = 5.6% Capital gains yield= 7.4% Year 3 to Year 4 P3= 56.5964 Expected dividend yield = 7.0% Capital gains yield= 6.0% S. Free cash flow is a way of looking at a business's cash flow to see what is available for distribution. This may be useful to equity holders, debt holders, and preferred stock holders to see how much cash can be extracted from a company without causing issues...
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...Chapter 1 An Overview of Corporate Finance and The Financial Environment MINI CASE Assume that you recently graduated with a degree in finance and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle Dellatorre, a professional tennis player who has just come to the United States from Chile. Dellatorre is a highly ranked tennis player who would like to start a company to produce and market apparel that she designs. She also expects to invest substantial amounts of money through Balik and Kiefer. Dellatorre is also very bright, and, therefore, she would like to understand, in general terms, what will happen to her money. Your boss has developed the following set of questions which you must ask and answer to explain the U.S. financial system to Dellatorre. a. Why is corporate finance important to all managers? Answer: Corporate finance provides the skills managers need to: (1) identify and select the corporate strategies and individual projects that add value to their firm; and (2) forecast the funding requirements of their company, and devise strategies for acquiring those funds. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. Answer: The three main forms of business organization are (1) sole proprietorships, (2) partnerships, and (3) corporations. In...
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...Portfolio National Markets / Performance Mini Case Summary International Portfolio Theory and Diversification Group 5 Kristin Hanselmann, Anna Ivaniuk, Lalita Pongpitakwises, Christian Seemann Fachhochschule Mainz - MA.IB International Finance March 2013 K. Hanselmann, A. Ivaniuk, L. Pongpitakwises, C. Seemann International Portfolio Theory and Diversification 1/35 Introduction Diversification / Risk Internationalizing Portfolio National Markets / Performance Mini Case Summary Introduction Christian Seemann International Portfolio Theory and Diversification 2/35 Introduction Diversification / Risk Internationalizing Portfolio National Markets / Performance Mini Case Summary Agenda Introduction International Diversification and Risk Internationalizing the Domestic Portfolio National Markets and Asset Performance Mini Case Summary 1 2 3 4 5 6 Christian Seemann International Portfolio Theory and Diversification 3/35 Introduction Diversification / Risk Internationalizing Portfolio National Markets / Performance Mini Case Summary Introduction Multinational Business Finance Part 5 - Foreign Investment Decisions Chapter 17 Pages 432 – 451 Christian Seemann International Portfolio Theory and Diversification 4/35 Introduction Diversification / Risk Internationalizing Portfolio National Markets / Performance Mini Case Summary International Diversification and...
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...Corporate Finance, 9/e Stephen A. Ross, Massachussetts Institute of Technology Randolph W. Westerfield, University of Southern California Jeffrey F. Jaffe, University of Pennsylvania ISBN: 0073382337 Copyright year: 2010 Table of Contents PART I: Overview 1 Introduction to Corporate Finance 1 1.1 | What Is Corporate Finance? | 1 | | The Balance Sheet Model of the Firm | 1 | | The Financial Manager | 3 | 1.2 | The Corporate Firm | 4 | | The Sole Proprietorship | 4 | | The Partnership | 4 | | The Corporation | 5 | | A Corporation by Another Name . . . | 7 | 1.3 | The Importance of Cash Flows | 7 | 1.4 | The Goal of Financial Management | 10 | | Possible Goals | 11 | | The Goal of Financial Management | 11 | | A More General Goal | 12 | 1.5 | The Agency Problem and Control of the Corporation | 13 | | Agency Relationships | 13 | | Management Goals | 14 | | Do Managers Act in the Stockholders' Interests? | 14 | | Stakeholders | 15 | 1.6 | Regulation | 16 | | The Securities Act of 1933 and the Securities Exchange Act of 1934 | 16 | | Sarbanes-Oxley | 17 | | Summary and Conclusions | 18 | | Concept Questions | 18 | | S&P Problems | 19 | 2 Financial Statements and Cash Flow 20 2.1 | The Balance Sheet | 20 | | Liquidity | 21 | | Debt versus Equity | 22 | | Value versus Cost | 22 | 2.2 | The Income Statement | 23 | | Generally Accepted Accounting Principles | 24 | | Noncash Items | 25...
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...advancement of science and technology and increasing competition in the worldwide market highly efficient and effective electronic gadgets like iphones, ipads, macbooks came up from Apple Inc. On October 2014 Apple came up with two of its leading innovations Apple ipad mini3 and ipad air 2 which are not much different from each other. The apple ipad HYPERLINK"http://finance. yahoo. com/news/ipad-mini-2-3-deals-134000863.html" mini 3 sale showed incredible discounts on the prices of the newcomers with much better configurations and features and thus failed the concept that old ones get discounts when new models come up and thus making it much more attractive to the apple shoppers. Apple Inc. is the leading manufacturing unit of electronic goods globally. The products even costs high enough for the common people to afford. We had a concept that when new models enter into the market, the older ones goes on for sale. But Apple Inc. changed this concept totally. It was astonishing to see that only after a few weeks of its launch apple ipad mini 3 and ipad air 2 experienced incredible discounts on their prices. The ipad mini 3 sale results showed a good discount on the prices of the newcomer and even on the old ones and thus made it affordable to the majority sections of the market. Steve Jobs-Father of Apple Ipad...
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...TermPaperWarehouse.com - Free Term Papers, Essays and Research Documents The Research Paper Factory Join Search Browse Saved Papers Search Home Page » Business and Management Mini Case - Mckenzie Corporation's Capital Budgeting In: Business and Management Mini Case - Mckenzie Corporation's Capital Budgeting CFEA3230 Advanced Managerial Finance individual assignment: MINI CASE - McKENZIE CORPORATION'S CAPITAL BUDGETING Prepared by :- RUBBIATUN ARDAWIYAH bt ABDUL HAMID CEA 080147 Prepared for:- Profesor Madya Dr. Rubi Binti Ahmad Date of submission :- 25 april 2012 MINI CASE - McKENZIE CORPORATION'S CAPITAL BUDGETING Sam McKenzie is the founder and CEO of McKenzie Restaurants, Inc., a regional company. Sam is considering opening several new restaurants. Sally Thorton, the company's CFO, has been put in charge of the capital budgeting analysis. She has examined the potential for the company's expansion and determined that the success of the new restaurants will depend critically on the state of the economy next year and over the next few years. McKenzie currently has a bond issue outstanding with a face value of $34 million that is due in one year. Covenants associated with this bond issue prohibit the issuance of any additional debt. This restriction means that the expansion will be entirely financed with equity, at a cost of $8.4 million. Sally has summarized her analysis in the following table, which shows...
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...Home Page » Business and Management Mini Case (P. 45) In: Business and Management Mini Case (P. 45) a. Why is corporate finance important to all managers? Corporate finance is important to all managers because it allows a manager to be able to predict the funds the company will need for their upcoming projects and think about ways to organize and acquire those funds. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. The organizational forms a company might have as it evolves from a start-up to a major corporation are: sole proprietorships, partnerships and corporations. The advantages of a sole proprietorship are that is is easily and inexpensively formed; is subject to few government regulations and it’s income is not subject to corporate taxation (but is taxed as part of the proprietor’s personal income). A partnership has many many of the same advantages and disadvantages as a sole proprietorship but a partnership is more complicated with regards to liability. For example if the partnership goes bankrupt if any partner is unable to meet their pro rata liability then the remaining partners must make good on the unsatisfied claims by drawing on their personal assets. A corporations has three major advantages: unlimited life (a corp. can continue after their original owners are deceased); easy transferability of ownership interest (stock is more...
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...1.0 Summary This report aims to help us to know the Mini (BMW) using the marketing principle. This report including the core product that the Mini offers, the reasons of BMW prepared to invest to have the Mini in its range, how the core product translated into different style of products, the advantages and disadvantages of using an existing brand name and the reason of the mini has been successful in the US. Report also has the company introduction and the product details. It tells us the difference between the Mini and competitors, such as safe and reliable, trendy yet iconic, small but sporty-ish, fun and individualistic, statement of wealth/status, staid and classic, understated power, history, great star effect, outstanding services, the contribution of environmental protection and reliable quality Through the report we know how the BMW Company use markets to sell the Mini to the consumers. 2.0 Introduction The Mini is a small car that was made by the British Motor Corporation (BMC) and its successors from 1959 until 2000. At its first lunched in 1959, lots of people were attracted by its small, fashion, sport, safe and easy move. And its space-saving front-wheel-drive layout (which allowed 80% of the area of the car's floorpan to be used for passengers and luggage) influenced a generation of car-makers. Its owners included The Beatles, Mick Jagger, Peter Sellers and Twiggy and it played a star role with Michael Caine in the movie The Italian Job. As an aside, it also...
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...Facts About Financial Structure Throughout the World • The financial system is a complex structure including many different financial institutions: banks, insurance companies, mutual funds, stock and bonds markets, etc. Copyright ©2015 Pearson Education, Inc. All rights reserved. 7-6 Basic Facts About Financial Structure Throughout the World • The chart on the next slide shows how nonfinancial business attain external funding in the U.S., Germany, Japan, and Canada. Notice that, although many aspects of these countries are quite different, the sources of financing are somewhat consistent, with the U.S. being different in its focus on debt. Copyright ©2015 Pearson Education, Inc. All rights reserved. 7-7 Sources of Foreign External Finance Figure 7.1 Sources of External Funds for Nonfinancial...
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...Mini Case BUS 401: Principles of Finance Chapter 11 Mini Case A. Due to flows being an item that the firm obtains and can reinvest, Caledonia should concentrate on cash flows verses accounting profits. When cash flows are being evaluated, the firm’s benefits and costs can be reviewed in a better manner. Since firms are more interested in benefits for the shareholders, they are only interested in the cash flows after-tax. Incremental cash flows are reviewed the most because firms are more concerned with their increased values when the project’s marginal benefits are being evaluated. B. When reviewing cash flow items, depreciation is not one of them. But depreciation to play a role in the differential cash flows of the project because of its effect on taxes. Overall expenses are increased by the expense of depreciation. Depreciation reduces accounting profits which also impacts cash flow by reducing taxes. C. Since firms are more concerned with incremental after-tax cash flows only, sink costs are typically ignored. Regardless of the results in regards to a project, sink costs have happened and are not considered incremental cash flows. J. Because the NPV is greater than zero and the IRR is greater than the rate of return, than the project should be accepted. K. The total project risk, also known as the project standing alone risk, disregards the statistic that the majority of the projects risk will be diversified away as the project...
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... LONG BEACH DEPARTMENT OF FINANCE, REAL ESTATE AND LAW FINANCE 400 FINANCIAL MANAGEMENT, NEU Dr. BILICI, Summer 2016 e-mail fin400neu@gmail.com REQUIRED TEXT: Intermediate Financial Management, by Brigham and Daves Financial Management Cases. Supplemental Readings: Study Guide. Course Objectives: To review the theoretical concepts in Corporate Finance and improve financial administration skills through projects problem solving and cases. Lectures, Projects, cases and problem solving approaches will be used to achieve the course objectives. Grading: Grade Percent Points Exams 200 points Excellent 80+ Group Work and Cases 100 points Good 70-79.9 Participation, Indiv. Cases 100 points Average 60-69.9 TOTAL 400 points Passing 50-59.9 Fail Below 50 Percentage Score 400/4=100 You will be penalized for absence, lack of participation or poor performance on reading assignments case assignments and problem assignments You are required to read the assigned chapters and finish the mini case assignments before the class discussion of the assignments. Additional readings and problems may be assigned as needed to supplement the text book. * EACH GROUP WILL TURN IN SIX WRITTEN CASE FOR GRADING PRIOR TO PRESENTATION. Written Case as well as Presentation will...
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...401(k) Account at East Coast Yachts Elijah Clark Walden University 401(k) Account at East Coast Yachts A new company employee is seeking to sign up for the company’s 401(k) plan. The individual is trying to determine which investment option is the best. After gaining information from a colleague, the employee decides to invest in a diversified portfolio. However, the employee is confused on whether to select the Vanguard 500 index fund or equity mutual funds. Assignment Questions The 401(k) Account at East Coast Yachts mini case asks to provide details regarding implications drawn from a provided graph for mutual fund investors. Additionally, the mini case asks whether the graph is consistent with market efficiency. Furthermore, the mini case seeks to understand the reason for making an investment decision for the equity portion of a 401(k) account. Graph for Mutual Fund Investors The general desire for an investor is to receive a return on their investments. The mutual fund has to outperform the market return in order to produce profits. However, mutual funds are unlikely to outperform the market because they usually have average market returns before expenses (Ross, Westerfield, & Jaffe, 2013). Considering the fund managers are responsible for making decisions and achieving results, they often take a high fee, which adds to expenses and deducts from the funds overall value. Additionally, no more than half of equity mutual fund investors are likely to outperform...
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...FI 8320, Spring 2005 Cases and Readings in Corporate Finance [pic] [pic] [pic] [pic] Instructor Professor David C. Nachman Office: RCB 1239 Phone: 651-1696 email: dnachman@gsu.edu Office Hours: W 10:00 am – 2:00 pm, or by appointment Prerequisites FI 8000 CSP: 1, 2, 6 Course Description This course focuses on financial policy-making through case analyses, contemporary readings from the professional literature, and problem solving. The emphasis in the course is on investment and financing decisions and their impact on firm value and on capital market imperfections and their impact on the raising of corporate capital. The course also provides an opportunity for the study of additional topics of special current significance such as capital structure and dividend policy, corporate restructuring and the market for corporate control, real options, risk management, international capital budgeting and financing, financial planning and working capital management, project financing, reorganizations and advanced equity valuation. Course Material Required text material • (BMA) R. A. Brealey, S. C. Myers and F. Allen, Principles of Corporate Finance, 8th ed., McGraw- Hill/Irwin, Inc., 2006. •(RP) Reading Packet •(CP) Case Packet The required text (BMA) and the materials that make up the Case Packet (CP) are available at the GSU Book Store. The Reading Packet (RP) is available at ERes. Contents of (CP) and (RP) (with ERes access instructions) follow...
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