...-the relationship of the leader to the board has a tremendous impact on the organization’s ability to fulfill its mission. -they work with to create the most effective, strong, and healthy boards possible to serve the organizations that they lead. -The chapters provide a brief overview of the best practice and its relationship to board development. -Join this journey of exploring the best practices of strong and effective boards. guiding the reader from a solid starting point of development by establishing role, purpose and function of the board to knowing and communicating the organization’s mission, vision and values. -Board members intentionally and routinely engage in mutual accountability, communication, evaluations and board development while taking the necessary time to process decisions eliminating unnecessary surprises. Boards unite and resolve to work together through change and transitions for the good of the Kingdom, the advance of the Gospel, and the prosperity of the organization. -to exhibit generosity as board members and to be outstanding examples of giving regularly and sacrificially to the church, college or organizations they serve in order to establishment a culture of board development that embraces the principle of “passing it on,” by developing new board participants that will lead to a strong and healthy future for the organization. - as a board member or as leader of an organization can take your present board environment and develop it into...
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...Chapter 5 Questions – January 31 1. Which of the following bonds has the greatest interest rate price risk? |a. |A 10-year $100 annuity. | |b. |A 10-year, $1,000 face value, zero coupon bond. | |c. |A 10-year, $1,000 face value, 10% coupon bond with annual interest payments. | |d. |All 10-year bonds have the same price risk since they have the same maturity. | |e. |A 10-year, $1,000 face value, 10% coupon bond with semiannual interest payments. | 2. Amram Inc. can issue a 20-year bond with a 6% annual coupon. This bond is not convertible, is not callable, and has no sinking fund. Alternatively, Amram could issue a 20-year bond that is convertible into common equity, may be called, and has a sinking fund. Which of the following most accurately describes the coupon rate that Amram would have to pay on the convertible, callable bond? |a. |Exactly equal to 6%. | |b. |It could be less than, equal to, or greater than 6%. | |c. |Greater than 6%. ...
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...If a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years. The percentage difference between the MIRR and the IRR is equal to the project’s WACC. 3. (TCO D) Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock? a. $26.77 b. $27.89 c. $29.05 d. $30.21 e. $31.42 (Points : 20) 4. (TCO G) The ABC Corporation's budgeted monthly sales are $4,000. In the first month, 40% of its customers pay and take the 3% discount. The remaining 60% pay in...
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...tax system encourages risk management to stabilize earnings. d. Statements a, b, and c are correct. e. None of the statements above is correct. Derivatives Answer: d Diff: E N . Which of the following is an example of a derivative? a. Futures. b. Options. c. Swaps. d. All of the above are examples of derivatives. e. None of the above are examples of derivatives. Options Answer: b Diff: E . An option that gives the holder the right to sell a stock at a specified price at some time in the future is called a(n) a. Call option. b. Put option. c. Out-of-the-money option. d. Naked option. e. Covered option. Option value Answer: d Diff: E . The value of an option depends on the stock’s price, the risk-free rate, and the a. Exercise price. b. Variability of the stock price....
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...Sheet）。但是，包括你的团队、你的董事会、你周围的朋友在内，都没有人曾经看到过一份Term Sheet，里面的某个“清算优先权”条款是这样写的（通常是英文）： Series A Preferred shall be entitled to receive in preference to the holders of the Common Stock a per share amount equal to 2x the Original Purchase Price… A系列优先股有权优先于普通股股东每股获得初始购买价格2倍的回报… 你完全搞不懂这是什么意思。 情景二：假如你接受了上面那份Term Sheet，投资人跟你投资了$2M，给你的投资前估值（Pre-money valuation）是$3M，投资后（Post-money）估值$5M，于是投资人拥有你公司40％的股份。经过1年，公司运营不是很好，被人以$5M的价格并购。你认为你手上60％的股份可以分得$2.5M的现金，也还满意。但是投资人突然告诉你，根据协议，他要拿走$4M（投资额的2倍），留给你的只有$1M。你又糊涂了。 什么是清算优先权（Liquidation Preference）? 几乎所有的VC选择可转换优先股（Convertible preferred stock）的投资方式，而可转换优先股的最重要的一个特性就是拥有清算优先权。 优先清算权是Term sheet中一个非常重要的条款，决定公司在清算后蛋糕怎么分配，即资金如何优先分配给持有公司某特定系列股份的股东，然后分配给其他股东。例如，A轮（Series A）融资的Term sheet中，规定A轮投资人，即A系列优先股股东（Series A preferred shareholders）能在普通股（Common）股东之前获得多少回报。同样道理，后续发行的优先股（B/C/D等系列）优先于A系列和普通股。也就是说投资人在创业者和团队之前收回他们的资金。 通常所说的清算优先权有两个组成部分：优先权（Preference）和参与分配权（Participation）。参与分配权，或者叫双重分配权（Double Dip）有三种：无参与权（Non participation）、完全参与分配权（Full participation）、附上限参与分配权(Capped participation)，相应的就有三种清算优先权： （1）不参与分配优先清算权（Non-participating liquidation preference） 参考下面实例： Liquidation Preference: In the event of any liquidation or winding up of the Company， the holders of the Series A Preferred shall be entitled to receive in preference to the holders of the Common Stock a per share amount equal to [x] the Original Purchase Price plus any declared but unpaid dividends (the Liquidation Preference). 清算优先权：在公司清算或结束业务时，A系列优先股股东有权优先于普通股股东获得每股[x]倍于原始购买价格的回报以及宣布但尚未发放的股利（清算优先权）。 ...
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...Communications Annual Report 2011-12 Profile Reliance Communications Limited Reliance Communications Limited is the flagship Company of Reliance Group, one of the leading business houses in India. Reliance Communications is India’s foremost and truly integrated telecommunications service provider. The Company, with a customer base of 161 million as on March 31, 2012 including over 2.5 million individual overseas retail customers, ranks among the Top 4 Telecom companies in the world by number of customers in a single country. Reliance Communications corporate clientele includes over 35,000 Indian and multinational corporations including small and medium enterprises and over 800 global, regional and domestic carriers. Reliance Communications has established a pan-India, next generation, integrated (wireless and wireline), convergent (voice, data and video) digital network that is capable of supporting best-of-class services spanning the entire communications value chain, covering over 24,000 towns and 600,000 villages. Reliance Communications owns and operates the world’s largest next generation IP enabled connectivity infrastructure, comprising over 2,77,000 kilometers of fibre optic cable systems in India, USA, Europe, Middle East and the Asia Pacific region. Mission: Excellence in Communication Arena To attain global best practices and become a world-class communication service provider – guided by its purpose to move towards greater degree of sophistication and maturity...
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...FORMULAS Expected return of a stock portfolio - E[rp]: (3 stocks) E[rp] = X1 ( E(r1) + X2 ( E(r2) + X3 ( E(r3) Portfolio variance ((P)2 : (3 stocks) ((P)2 = X12 ( (12 + X1( X2((12 + X1( X3((13 + + X2( X1((21 + X22 ( (22 + X2( X3((23 + + X3( X1((31 + X3( X2((32 + X32 ( (32 where: X1 , X2 och X3 is respective stocks amount of the total value of the portfolio. (12 , (22 and (32 is respective stocks variance (12 = (21 is the covariance between stock 1 and stock 2 (13 = (31 is the covariance协方差 between stock 1 and stock 3 (23 = (32 is the covariance between stock 2 and stock 3 CAPM: E(rj) = rf + (j ( [E(rm) -rf] where: E(rj) is the expected return of stock j E(rm) is the expected return of the market portfolio rf is the risk-free interest rate (j is the beta-value of stock j (j = Cov (rj,rm)/var(rm) = (jm ( [pic] Stock j:s contribution to the risk of the portfolio (j = [pic] MODIGLIANI & MILLER M&M Prop I. Without corporate taxes: VL = VU M&M Prop II. Without corporate taxes: rS = rU + (rU - rB) ( [pic] M&M Prop I. With corporate taxes: VL = VU + TC (B M&M Prop II. With corporate taxes: rS = rU + (rU - rB) ( [pic] ((1-TC) rWACC = [pic]rB ((1-TC) + [pic]( rS VL = [pic] where: VU = Value of the all equity financed firm (Unlevered firm) VL = Value of the Levered firm B = Value of the debt (bond value) S = Value of the equity (Stock value) TC = Corporate tax rate) ...
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...my micro/macro economy & Global Economy, and to find that I need more time to remember and understand alll these, it's depressing. My mental judgment tells me that you know what you are saying. Thank you. (That still I´m not) you don´t need to be a PhD in Economics (even as having one can help): you DO need a lot of PATIENCE, you need a discipline of reading everyday A LOT about global economic & political news (discarding the garbage from real-value information), you need a strategy and need to follow it, and you need to remember Peter Lynch´s famous phrase: ¨The main organ in Investing is not the brains: it´s the stomach!¨ . Good investing & best regards. Also, when the stock market drops due to some economic event, we often get dollar rallies. The reason is because everyone is selling thier stock and trading it for Cash. If everyone wants cash, cash...
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...dropped out of university to found Dell Computers. Michael formed in his dorm room the underlying principles, which he would follow throughout the 80's and 90's as CEO of Dell Computers. Since their inception in 1982, dell has had a consistent rise in sales. Dells built to order strategy has enabled them to become a very efficient producer of computers and profitable company. The WebPages for dell computers has enabled dell to be able to reduce expenditures and become more efficient in their overall production and distribution of their products. Dell has been the only company to become an efficient maker of computers using the built-to-order system. Dells stock has become increasingly more valuable to investors over the past five years. Dell's built-to-order strategy has made them successful in growth, development and stock valuation. The book "Direct from Dell" gave a lot of background information on, Dell's strategy, and mail order system as well as statistics on company sales and growth. The book goes into depth when analyzing Dell's built-to-order system, and mail order system. The book was written before the WebPages became popular so it talks only about what the company expects from it and not about how the web page has performed. The Charles Shwabb investment web page gave a lot of information, which would suit potential investors on Dell. The web page allowed me to view Dell's financial statements and analyze just how profitable...
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...out the remaining assets of the company to the one of the other 3 big cable companies; Time Warner, Comcast and Cablevision; each one of them offered different amount in the bid, nevertheless the company had to analyze how certain each offers were, how probable was any of them to pull out the offers as well as what to do with the money they would get in case the judge let them do the sell. Family Control Adelphia was founded and managed by Rigas family, the case talks about how the company after 1985 decided to go public in order to acquire the capital investment to expand and become one of the biggest cable providers in the country. Nevertheless the Rigas family managed to keep almost full control of the company by keeping special type stocks with decision making power in the board. The company kept being managed by the funding family as well as the family keeping some of the cable assets for themselves in separate private partnerships and continuing to buy properties privately as well as for the company. The case explains how the privately owned assets of the family were managed by already-public Adelphia Corp by some management agreements and with this the expenses of such assets were consolidated with the expenses of Adelphia by some accounting system the company had; however the profits and revenues of such assets were not consolidated. This created the first red flag. The case shows clearly the structure of the board of directors; which was entirely created by family and...
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...Bond Law Review Volume 15 Issue 1 Special Issue: Comparative Corporate Governance 7-1-2003 Article 13 Corporate Governance in Malaysia Kamini Singam Recommended Citation Singam, Kamini (2003) "Corporate Governance in Malaysia," Bond Law Review: Vol. 15: Iss. 1, Article 13. Available at: http://epublications.bond.edu.au/blr/vol15/iss1/13 This Article is brought to you by the Faculty of Law at ePublications@bond. It has been accepted for inclusion in Bond Law Review by an authorized administrator of ePublications@bond. For more information, please contact Bond University's Repository Coordinator. Corporate Governance in Malaysia Abstract This article examines the corporate governance system in Malaysia. A sound corporate governance system should help create an environment conducive to the efficient and sustainable growth in the Malaysian corporate sector. Since the Southeast Asian financial crisis in 1997 – 98 (‘financial crisis’), corporate governance has become a key policy issue confronting many Southeast Asian countries, including Malaysia. This article considers the distinctive problems of corporate governance in Malaysia, despite several steps for reform that have taken place since the financial crisis. There will be a brief discussion on the meaning of corporate governance and an overview of the present status of corporate governance in Malaysia, in particular after the financial crisis. Keywords corporate governance, Malaysia, Southeast Asian financial...
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...purchased one of these bonds at par value when it was issued. Right away market interest rates jumped, and the YTM on your bond rose to 6 percent. What happened to the price of your bond? A4-12 P = 50/1.06 + 50/1.062 + 50/1.063 + 1.050/1.0610 = $926.40 P5-1. The equity section of the balance sheet for Hilton Web-Cams looks like this: Common stock, $0.25 par $400,000 Paid-in capital in excess of par $4,500,000 Retained earnings $1,100,000 a. How many shares has the company issued? 400,00/.025=1.6 MILLION SHARES b. What is the book value per share? (400,000+4,500,000+1,100,000)/1.6 MILLION SHARES = $3.75 PER SHARE c. Suppose that Hilton Web-Cams has made only one offering of common stock. At what price did it sell shares to the market? (4,500,000+400,000)/1.6 MILLION SHARES = $3.0625 P5-3. Owners of the Internet bargain site FROOGLE.com have decided to take their company pubic by conducting an initial public offering of common stock. They have agreed with their...
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...Owner’s equity paper Taisha Ransom ACC/423 August 29, 2011 Henry Leonard Before investors invest in a company, he or she must take various items into consideration. First, both paid in capital and earned capital are looked at. These items tell investors how well the company is doing and if the company is profitable. Next, investors look at earnings, basic and diluted. Once an investor takes the above into consideration, he or she can then make the decision whether to invest in a company or not. This paper will discuss why it is important to keep paid in capital separate from earned capital. How earned capital and basic earnings are more important than paid in capital and diluted earnings will also be discussed. Before one can explain why it is important to keep paid in capital separate from earned capital, one must know the difference between the two. Earned capital, also known as retained earnings, is the capital companies make from everyday operations. “It consists of all undistributed income that remains invested in the company”(Kieso, D. E., Weygandt, J.J., & Warfied, T. D., 2007). Paid in capital is also known as contributed capital. Paid in capital is “the amount provided by stockholders to the corporation for use in the business” (Kieso, D. E., Weygandt, J.J., & Warfied, T. D., 2007). It is important to keep the two separate so the two are clearly stated for investor and stockholder information. Another reason it is important to keep the two separate is...
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...LECTURE 7 APPENDIX: A step-by-step estimation of the WACC (Read this before attempting the case study) The balance sheet of a firm reveals the following liabilities and equity: Bank overdraft Accounts payable Provisions Bank mortgage loan Bonds Deferred tax liabilities Preference shares Shareholders equity Share capital Reserves Retained earnings $('000) 1000 4266 2934 5000 3000 3600 4000 2000 5000 18000 $50000 Additional information: a) The current interest rate on bank overdraft is 9%. b) The current mortgage loan has two years remaining to maturity. The loan taken out three years ago with a bank carried an interest of 9% per annum on the reducing balance. A new 2-year loan will cost 10% on similar terms. c) The bonds outstanding pay a coupon of 11% once a year with the face value to be repaid in six years. A merchant banker suggests that the current yield on a new 6-year bond issue is 10.5%. d) Preference shares were issued with a face value of $100 and a dividend rate of 9%. They were recently traded at $90. e) There are 2 million ordinary shares outstanding. The last trade of ordinary shares was $47. New shares can be sold for $45 net of issue costs. The beta of the shares is estimated to be 1.06. 10-year government bonds are currently yielding 5.52% and the expected market risk premium is 8%. f) The tax rate is 30 cents in the dollar. Step 1: calculate the market value of outstanding securities in order to estimate the weights provided by each source of financing Bank...
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...Case Study: Debt Policy at UST Inc. UST Inc. is the leading producer of moist smokeless tobacco products which manage by using the conservative debt policy and high dividend payout. Since the firm has faced the decline of the growth from year 1993, the company decided to make the recapitalization by borrowing $1 billion to repurchase their stock in order to maximize the company’s value. By borrowing, interest charged on loan is tax-deductible which the firm can benefit from tax shield and can also reduce the cost of capital. With the combination of debt and equity financing, the company can find the optimal point that reflect the lowest cost of capital which would provide the maximum valuation. Moreover, additional debt can reduce the agency cost of the company by forcing management to avoid investment in the underperform business. This can reflect the return on equity to increase which can represent the management performance and preferable for the investor. However, when the borrowing is too high, the risk of bankruptcy will be high also. Thus, it is important to include the risk of bankruptcy in the analysis of the firm. In order to make the decision about the borrowing plan of amount, cost and time, the information of the company, stakeholders and risk are needed to concern for analysis. From, the historical data and information, the company’s operation reflects the strong cash flow because of the strength and highly cash generative nature of tobacco...
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