heavily involved in exploration and devilment. From 1924 to the present, pioneer has been able to expand both vertically and diversify horizontally. With such resources and capital, the company has to oversee so many opportunities and ventures. Presently the company is at odds over whether they should use a company wide cut off rate based on the overall weighted average cost of capital or if Pioneer should use multiple rates that reflect risk-profit characteristics of the several businesses or economic
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Dr. Bliss Strayer University Corp. Investment Analysis—FIN550 July 27, 2011 Assignment #2: Risk Assessment, Portfolio Management 1. You are given the following long-run annual rates of return for alternative investment instruments: • US Government T-Bills 3.5% • Large-cap common stocks 12.1% • Long-term corporate bonds 6.2% • Long-term government bonds 5.6% • Small-capitalization common stock 14.6% The annual rate of inflation during the period was 2.9%. Compute the real
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“small stock effect”: small stocks provide greater returns than large stocks for the same amount of volatility. Their strategy was to invest in small cap stocks based on deciles. They started with the “DFA 9-10 Strategy”, in which they invested in companies chosen from the 9th and 10th deciles of the NYSE, the American Stock Exchange and the NASDAQ. Later, they added the “DFA 6-10 Strategy” and the “DFA 6-7-8 Strategy”. The implemented an active strategy by searching for attractive purchases. They
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HSA 525-Health Financial Management Assignment # 4 – Medical Associates November 27, 2011 Medical Associates: Equity cost of capital, DCF, CAPM, risk, capital budgeting Medical Associates is a large for-profit group practice. Its dividends are expected to grow at a constant rate of 7% per year into the foreseeable future. The firm's last dividend (D0) was $2, and its current stock price is $23. The firm's beta coefficient is 1.6; the rate of return on 20-year T-bonds currently is 9%; the
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FINANCIAL MANAGEMENT CASE REPORT 2 IDENTIFYING VALUE CREATORS Denis Vassilyev 201105020 Temple Uwalaka 201105018 04/16/2012 OVERVIEW In the given case we are supposed to prepare a comparative financial performance analysis for companies within different industries and different geographical regions in terms of value creation. From a financial perspective, value is said to be created when a business earns a return on capital that exceeds the cost of capital. For that analysis we are
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The book-to-market effect suggests that an investor can earn excess returns by investing in companies with high book value (the value of a firm’s assets minus its liabilities divided by the number of shares outstanding) to market value. A study by Fama and French 1 suggests that book-to-market value reflects a risk factor that is not accounted for by traditional one variable CAPM. For example, companies experiencing financial distress see the ratio of book to market value increase. Thus a more complex
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Equity Research Report 19th July 2012 Idea Cellular Limited CMP:INR81.4 Stock Information IDEA.NS/ IDEA.BO Sector Telecom Market Cap.(INR Mil) 280,832 Avg. Daily Volume 1,560,228 Beta 0.94 PE Ratio 38.7 52 Week High/Low 103.7/65.6 SENSEX/Nifty 117266.6/4159.0 Price Perfromance Idea 1 Month 3 Month 6 Month 12 Month 10.2% -6.1% 0.5% 5.4% S&P CNX 500 1.9% -2.8% 4.9% -9.2% “Rating:Hold (on watch)” Target Price: INR96 Our DCF valuation indicates upside of almost 18% from current price level
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PART I THE VALUATION OF BLUESCOPE FOR THE RESTRUCTURE 1. Historical Financial Performance According to BlueScope Steel Limited consolidated financial headlines, the total revenue of BlueScope kept slightly increasing from 2003 to 2008. However, there is a significant fluctuation of revenue in recent three years. As a result, the EBIT and NPAT suffered a tremendous decrease from 2008 to 2009. And BlueScope generated its first loss (YR 2009) on NPAT shown negative A$66 million which is caused by the
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000 cash flow, would be needed to accumulate $20,000 at the end of Year 5? (Assume that the cash flows for Years 1 through 5 remain the same) d. Time value analysis involves either discounting or compounding cash flows. Many healthcare financial management decisions---such as bond refunding, capital investment, and lease versus buy---involve discounting projected future cash flows. What factors must executives consider when choosing a discount rate to apply to forecasted cash flows? 9-11 Consider
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beyond the pure numbers, such as the difficult market environment. 1. Advantages of going public First of all, the IPO would help Rosetta Stone raise equity, giving the company the opportunity for further investment with the aim of establishing its brand globally and expanding its geographic outreach. As a publicly traded company, Rosetta Stone will receive more exposure to both national and the international capital markets, creating the opportunity to reach more investors. For example, the planned
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