Week 4 Study Guide: Business Valuation Readings and Key Terms • Ch. 5 of Fundamentals of Corporate Finance o Time value of money o Time zero o Future value (fv) o Principal o Simple interest o Compounding o Compound interest o Discounting o Discount rate o Present value (pv) o Rule of 72 • Ch. 6 o Annuity o Perpetuity o Ordinary annuity o Present value of an annuity (PVA) o Amortization o
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Start-up capital: * Production cost (for trial period and the first run): Cost roughly 82 USD for each Streetsense * Logistic expenditure: Cost roughly 30 USD per package (UPS 2 day shipping service within US) *Specific numbers depend on the future marketing plan * Storage expenditure: 0 if we use the office as a warehouse *Specific numbers depend on the future marketing plan * Outsource part (production, assembling, packaging): Roughly cost 40 USD for each Streetsense(over
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1. What factors should Ameritrade’s management team consider when evaluating the proposed advertising program and technology upgrades? How significant are these factors from a risk perspective? Based on the case, we know the company Ameritrade Holding Corporation is a deep-discount brokerage, and the company’s proposed strategy is to increase the customer base by being a low-cost provider against its competitors. The company plans to invest more towards technology and advertising, and cut costs
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Midterm Review A few pointers PORTFOLIO THEORY Expected returns • As we talk about annual expected returns, keep in mind what they are: E(D1 ) + E ( P1 ) E(ri ) = -1 P0 E(D1 ) E(P1 ) - P0 = + P0 P0 Risk • As time passes, realized stock prices and dividends may differ from what you expected. • Such future deviations from expectations represent, from today’s perspective, risk. • Standard deviation measures this risk (“average deviation from expectation”). Portfolios
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Nike Inc. Case Summary. Kimi Ford, a portfolio manager of NorthPoint Large Cap fund is considering purchasing Nike’s stock. Nike’s report revealed a decline in sales growth, profits and market share. However, Nike had a strategy to revitalize the company. The strategy would address both top-line and operating performances by pushing its apparel lines and cutting down expenses. Analyst responded with mix signal to Nike new plan. Ford has done the discounted cash flow forecast, and Joanna Cohen estimated
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Market capitalization – number of shares outstanding multiplied by price per share (do not confuse with market capitalization rate). Liquidity – the ability to convert an asset into cash easily and at fair value * Long position – if you are “Long” a stock, you own it. * Short position -- If you are “Short” as stock, you have shorted it. Order Type | Purpose | Trigger price | Market Order | Trade (buy, sell or short) at current price | N/A | Limit buy | Buy at an attractive price |
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FIN 6416 Case 1: Valuing Coca Cola stock Executive Summary The case that has been presented is a valuation of Coca Cola, its current stock price, and whether Coca Cola has the potential to be a good recommendation for clients to add to their portfolios. The analysis herein takes into account historical Coca Cola financial information, and uses the information to ascertain whether or not Coca Cola, at its current stock price of $58.00 a share, is a viable security for investors to add to
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INC.: Cost of Capital Jul 31st, 2014 Case Approach As required in the instructions, the group will answer each of the questions regarding the case, along with its justifications. In addition, a spreadsheet will be attached with all the calculations regarding this case. Q1. What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? WACC is defined as the weighted average cost of capital, which is the
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money. The question of what breadth of diversification is appropriate is an ongoing conversation among financial professionals. Finding the right diversification level for yourself involves an analysis of your assets and your tolerance of risk. Advantages Risk reduction When your assets are widely diversified, your portfolio tends to perform in a similar way to the market as a whole. If you own stocks in 20 different areas and one of them takes a dive, it's unlikely that your portfolio will suffer
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INTRODUCTION We are required to collect stock prices of 35 public listed companies. There are 20 Malaysia, 5 United State, 5 United Kingdom, 5 Indonesia and KLCI index for the period of 2006 until 2013 based on weekly basis. Malaysia stock prices in this project based on Bursa Saham Malaysia. The stock prices of 20 Malaysia public listed company named by Prostaco, Raya International, Tiong Nam, Tong Herr, Toyo Ink, TSH, Turiya, United, Vitrox, UPA Corporation, Zecoon, Yokohama Industries, Woodlandoor
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