...REAL OPTION VALUATION: MW PETROLEUM I. Company background and description on each of 4 projects In 1991, Amoco Corporations, a conglomerate of petroleum and chemical corporations, decided to divest some of their smaller properties and when further cuts were needed, they looked to divest the middle section of assets in its marginal curve. As a result, they formed MW Petroleum, a free-standing exploration company that was even as large as some of independent oil companies. It operated exploration and development for well, approximately working interests in 9,500 wells in 300 production areas. Amoco then prepared to sell MW Petroleum to a mid-size independent petroleum company. Apache Corporation was interested in buying most portions of MW and was the only buyer that appears to be a good fit in the market at that time. Apache, with revenue of $270 million, believed that achieving high profit could be realized by acquiring marginal properties and operating well with expertise. Therefore, the deal was likely to be a win-win situation for both parties, if they could reach a reasonable price to accept. The asking price from Amoco was $1 billion. Was it a reasonable price? We will discuss this number, and find a conclusion to this question through our document. II. Valuation Methodology Generally, the Discounted Cash Flow method is the most popular valuation methodology for financial analysts. It uses the concept of time value of money; the future cash flows are estimated...
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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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...FI 4320, 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 4000 CSP: 1, 2, 4, 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)...
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...INTRODUCTION Background of the Study The evolution of industrialization and mechanization in the 21st century made it possible to transform manual equipment into modern machinery. With this development, global reliance on petroleum-based fuel is constantly increasing, giving rise to a challenge on energy sufficiency. Negative impacts, such as greenhouse gas (GHG) emissions, are associated with the combustion of these petroleum-based fuels (MacLellan, 2010). Major GHG contributors identified by the United States Environmental Protection Agency (EPA) include industry (20%), residential and commercial (11%), and agriculture (8%) (Bogart, 2013). Adverse effects on health and the environment of using petroleum-based fuels, thus, urge scientific community to search and develop alternative renewable fuel to replace the current and existing petroleum-based fuels. Biofuels have been demonstrated by several researches to reduce GHG emissions as compared to gasoline (petrol) (Leen, 2012). Among the alternative biofuels, bioethanol has received considerable attention in transportation sector because of its utility as an octane booster, fuel additive, and even as neat fuel (Mudliar, et. al., 2009). Bioethanol can be derived from organic materials, such as energy crops like corn, wheat, sugar cane, sugar beet, and cassava, among others (Neves, et. al., 2007). However, due to their primary utility as food, these crops cannot provide the global demand for bioethanol production. Among...
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...Presently Pakistan’s energy claim is assumed to be 20,000 MW against its insufficient production of 11,500 MW, as a result this unstable presents in supply and demand, seeds the energy crisis in Pakistan. On the other hand the ratio of utilizing natural resources for the production of electricity is small as compared to other countries. Pakistan relies much on non-renewable energy resources for the production of electricity. The price change of gasoline in international market brings uncertainity in the generation expenditures of electricity in Pakistan. The usual advancement in the price rates of fuels influences entirely and is wholly responsible for energy crisis. Pakistan should produce energy from renewable energy sources like Hydro power, coal , wind and solar energy and their utilization may bring a solution to the crisis in...
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...Chapter 14 Energy Energy is considered to be the lifeline of economic development. For a developing economy with a high population growth rate, it is important to keep a balance between energy supply and emerging needs. If corrective measures are not effectively anticipated significant constraints start emerging for development activities. The rise in global energy demand has raised questions regarding energy security and increased the focus on diversification, generation and efficient allocation. The answer lies in the attainment of optimal energy mix through fuel substitution by promoting energy efficiency and renewable energy and interregional co-operation. However, oil and natural gas will continue to be the world’s top two energy sources through 2040; accounting for about 60 percent of global demand. Gas being the fastest growing major fuel source over this period is expected to grow at 1.6 percent per year from 2010 to 2040 as estimated by “The Outlook for Energy: A View to 2040” is given in Figure-14.1. Figure 14.1: Global energy demand by fuel type (Quadrillion BTUs) 250 Quadrillions British Thermal Units 2010 200 150 100 2040 2040 2010 From its peak in 2025, coal will decline by more than 10 percent of total Hydro/Geo 2010 2040 Latin America and China are the biggest users of hydro power, which makes up over 80 percent of total Hydro/Geo supplies 2040 50 0 2010 2010 2040 2010 2040 2010 2040 Source: The Outlook for Energy: Aview...
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...The purpose of this paper, prepared by Jessica Chan under the supervision of Robert F. Bruner is about analyzing the companies Coca Cola and Pepsi after Pepsi has announced a merger with Quaker Oats Company with a deal at around $14 billion. With this deal Pepsi would have access to 83.6% of the sport drink market and around 33% of the U.S. noncarbonated-beverage market, followed by Coke with 21%. The paper wants to answer the questions how the latest announcement of Pepsi has an effect on the two companies´ prospects for value creation by showing the company background of both companies, giving a briefly industry overview of the beverage market and competitive events and establishing a financial comparison, especially with ratio and economic profit analysis. In the world Coca Cola and Pepsi have towered as the two leading brands of beverages. In the year 2000, Coca Cola was the largest manufacturer, distributor, marketer of soft-drink concentrates and syrups in the world and its market value reached $110.01 billion. On the other side Pepsi was a $20 billion worth company in 2000, acting in the snack food, soft drink and noncarbonated beverage market. Both companies have reached worldwide expansion of their markets, which include a large product range of beverages, apparel and paraphernalia with their respective logos. Both have grown into longstanding global and social industry leaders. Coca Cola´s annual sales were $20.5 billion which were earned also through a variety of...
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...Efficiency and Rural Electrification 2nd Edition, June 2015 Implemented by 2 Acknowledgements This report on the Nigerian energy sector was compiled as part of the Nigerian Energy Support Programme (NESP). NESP is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and funded by the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ). The authors would like to thank the GIZ Nigeria team for having entrusted this highly relevant subject to GOPA- International Energy Consultants GmbH, and for their extensive and dedicated inputs and guidance provided during implementation. The authors express their gratitude to all project partners who provided particularly valuable and interesting insights into ongoing activities during the course of the project. It was a real pleasure and a great help to exchange ideas and learn from highly experienced management and staff and committed representatives of this programme. How to Read Citations Bibliography is cited by [Author; Year]. Where no author could be identified, we used the name of the institution. The Bibliography is listed in Chapter 10. Websites (internet links) are cited with a consecutive numbering system [1], [2], etc. The Websites are listed in Chapter 11. 3 Imprint Published by: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Nigerian Energy Support Programme (NESP) 2 Dr Clement Isong Street, Asokoro Abuja / Nigeria Contact: Daniel Werner...
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...AN ASSESSMENT OF ALTERNATIVE ENERGY SOURCES IN ACHIEVING ENERGY SECURITY FOR EFFECTIVE OPERATION OF HOMES, SCHOOLS AND HEALTH FACILITIES IN KAJIADO COUNTY, KENYA BY ONYANCHA MORARA GEORGE A Research Project Submitted to the Graduate School in Partial Fulfillment of the Requirements for the Conferment of the Degree of Master of Business Administration DEPARTMENT OF BUSINESS FACULTY OF COMMERCE KISII UNIVERSITY 2014 DECLARATION DECLARATION BY CANDIDATE This research project is my original work and has not been submitted for the award of a diploma or degree in this or any other institution/university. Signature……………………………….. Date…………………………… Onyancha Morara George CBM12/10003/10 DECLARATION BY SUPERVISORS This research project has been submitted for examination with our approval as University Supervisors. Signature:………………………………… Date:………………………… Dr. Nemwel N. Bosire Lecturer, Department of Business Signature:………………………………… Date:…………………………. Mr. Martin O. Lumumba Lecturer, Department of Business COPYRIGHT All rights reserved. No part of this report may be reproduced or transmitted in any form by means of mechanical reproduction including photocopying, recording or retrieval from systems without express permission of the researcher or Kisii University on his behalf. ©2014 DEDICATION This research project is dedicated to my father, the late Onyancha Michieka and mother...
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...energy and solar energy etc. Why Energy is needed ? • Think about how you use energy every day. You wake up to an alarm clock. You take a shower with water warmed by a hot water heater. You listen to music on the radio as you dress , u eat breakfast….. And so on……. • Food items, medicines, groceries, the accessories which we use, Cosmetics, electronic appliances, lighting, heating cooling, • Everything needs energy in direct or indirect way Why Energy is needed ? Various sectors of economy- Industry, residential, commercial, transport • Industry- Petroleum Refining , steel, cement, chemical, metal, paper, pharmaceuticals, mining etc • Transportation,-automobile, commercial transport,-bus , truck, train, airplane , mass transits • Residential and commercial buildings use energy in for heating and cooling, lighting, heating water, and operating appliances. Non-Renewable Energy Sources • Conventional – Petroleum – Natural Gas – Coal – Nuclear • Unconventional (examples) – Oil Shale – Natural gas hydrates in marine sediment 6 Renewable...
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...Act were moving generation and distribution out of ‘License Raj’ regime, opening access to national grid and demolishing the ‘Single Buyer’ model. The failure of the huge federal structure and the changing global scenario have forced Government to think of ways to revive this fundamental infrastructure sector. Two of the avenues that government can count on for future growth of this sector is “Midgets or Small Power Plants” and “CDM—Clean Development Mechanism”. India and Infrastructure With traditional government controlled vertically integrated monopoly giving way for new multi-player market-driven scenario, the opportunity in power sector attracted entrepreneurs into the sector. The ever-growing demand gap asked for addition of 1000 MW generation capacity per year. These forces coupled gave rise to different strategies that were new to the sector. One of the fast growing strategies that attracted a lot of players was—Small...
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...Electricity Generation by Hybrid Biomass Power Plant From Waste For Bangladesh Md. Rakibul Islam Monshy Department of Electric Engineering & Computer Science North South University, Dhaka Abstract- Hybrid renewable Biomass Power is becoming popular for remote area power generation applications due to advances in renewable energy technologies and subsequent rise in prices of petroleum products. A hybrid energy system usually consists of two or more renewable energy sources used together to provide increased system efficiency as well as greater balance in energy supply. Hybrid renewable energy systems is one of the most promising applications of renewable energy technologies in remote areas, where the cost of grid extension is prohibitive and the price of fossil fuels increase drastically with the remoteness of the location. It has been demonstrated that hybrid energy systems can significantly reduce the total life-cycle cost of stand-alone power supplies in many situations, while at the same time providing a more reliable supply of electricity through the combination of energy sources. Applications of hybrid systems range from small power supplies for remote households providing electricity for lighting or water pumping and water supply to village electrification for remote communities. Mixed combinations of renewable energy systems are also possible, that is applications where different renewable energy technologies are applied in one location without the systems being...
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...Corporate Social Responsibility in the Solar Photovoltaic Industry Corporate Social Responsibility in the Solar Photovoltaic Industry CSR Across Industries CSR Across Industries Table of Contents Executive Summary 3 The Solar Photovoltaic Industry and CSR related issues 3 Introduction 3 CSR Issues 4 Companies 4 The Companies 5 1. British Petroleum – (Philip Leith) 5 2. ENEL – (Santiago Liotta) 7 3. MEMC Electronic Materials, Inc. / SunEdison – (Eleonora Ricciardi) 9 4. Sharp Solar – (Aaron Teo) 11 5. Suntech – (Tutram Nguyen) 13 Companies Comparison and Evaluation 16 Conclusions 17 Bibliography 18 Executive Summary In the last decade, the solar industry has seen exponential growth. Government subsidies, climate change debate and need to identify alternative eco-friendly energy sources have fueled this sector. The idea of harnessing renewable energy from the sun is naturally attractive but is it a perfect solution? Do the companies profiting in this business abide to the same United Nations Global Compact principles urged by environmentalist, conservationists, human rights activists, governments and other stakeholders around the world? This paper will provide our findings on our evaluation of five global players against a handful of corporate social responsibility issues in the solar industry. The Solar Photovoltaic Industry and CSR related issues Introduction As traditional hydrocarbon supplies are increasingly difficult and expensive...
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...The major contributing factors to the astounding success of Mundra Port are as follows: 1. Ready Availability of Cargo: The primary purpose of any port is to facilitate the smooth movement of cargo and related ships. In fact one of the parameters for measuring the efficiency of a port is to measure the time as to how fast a particular cargo/commodity is moved to/from the port. The faster the movement the more efficient is the port. As Adani Group was already in trading business and thus had ample cargo waiting for efficient movement so the port so constructed was bound to succeed. The existing port facilities were poor and inadequate at that time and hence the trading business of Adani group was suffering due to lack of such port. 2. Strategic Location: Mundra Port is strategically located in Northern Gulf of Kutch and provides a convenient international trade gateway to Europe, Africa, America and the Middle East. It also has a large land area available for development, part of which is now the Mundra SEZ which proposes to attract port-led industrial development. Thus though initially the scope of port was just a captive jetty for Adani Group, but there was always huge scope for growth to a multi-user port facility from the very beginning. 3. Natural Deep Draft: The biggest maritime factor and USP for continued growth of Mundra Port has been the availability of natural deep draft. The port is blessed with an all round draft of 17-17.5 meters. The deep draft means...
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...Source of Energy Introduction Despite enormous hydropower potential (theoretically 83,000 MW), only about 40 percent of the population of Nepal has access to electricity and this percentage even drops down in the remote areas. Since the rural energy demand is basically for lighting, Government of Nepal (GoN) has its dedicated energy policy to promote Renewable Energy Technologies (RETs) including Solar Home Systems (SHS) which follows the principles of Solar Photovoltaic Systems. Photovoltaic are best known as a method for generating electric power by using solar cells to convert energy from the sun into a flow of electrons. Solar cells produce direct current electricity from sun light, which can be used to power equipment or to recharge a battery. The first practical application of photovoltaic was to power orbiting satellites and other spacecraft, but today the majority of photovoltaic modules are used for grid connected power generation. Due to the growing demand for renewable energy sources, the manufacture of solar cells and photovoltaic arrays has advanced dramatically in recent years. Solar photovoltaic is growing rapidly from a small base to a total global capacity of 40 GW (40,000 MW) at the end of 2010. More than 100 countries use solar PV. Some 24 GW of solar was projected in November 2011 to be installed in that year, pushing up worldwide capacity to roughly 64 GW. Installations...
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