Nike Inc. Case 1. What is the WACC and why is it important to estimate a firm’s cost of capital? WACC is weighted average cost of capital, which is the expected rate of return on average from all the company’s existing debts and securities. It takes into account all different types of financing in the company’s capital structure. The reason it is important to estimate WACC is because it measures what it costs the firm to take on a project based on its current Debt and Equity mix. When the
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Economic Value Added (EVA) EVA is not actually a new discovery. The concept of EVA has been described in the first theoretical basis of capital structure and company value was presented in the academic papers by two financial economists, Franco Modigliani and Merton H. Miller in 1958, later has been known as M&M (Modigliani-Miller) theorem. The basic theorem states that the value of a firm is unaffected by how the firm is financed, whether by issuing stock or selling debt. However, Modigliani
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UNIVERSITY OF WASHINGTON Graduate School of Business Administration Finance 553 CAPITAL INVESTMENT PLANNING Winter 2003 Professor Robert C. (Rocky) Higgins 306 Mackenzie Hall Tel: 543-4379 E-mail: rhiggins@u.washington.edu Homepage: http://us.badm.washington.edu/higgins/ (From here you’re one click from the class page) Office Hours: M, W: 10:30 – 12:00 COURSE OBJECTIVE Capital Investment Planning is a case course examining corporate investment decisions and related issues in
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Introduction: BMW is a famous company in the word. It owned many brand like Rolls-Royce, mini. BMW created by Karl Rapp in 10/1993 Analysis Task1: Objectives of BMW: Up to the year 2020, BMW Group intends to strengthen its position within the global motor vehicle market by increasing sales to more than two million automobiles per year. BMW’s strategic objective is to ensure that: The BMW Group is the leading provider of premium products and premium services for individual mobility. (http://www
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NIBC Valuation Memo Analysis of valuation methodologies Comparable company analysis compares trading and operating performance of the Wynn Resort to its peers. We used this valuation method to determine how the market has valued the earnings and cash flows of similar companies and allow us to analyze other parameters such as book value, leverage and margins. The main benefit of this valuation methodology is that market efficiency ensures that the trading multiples are similar for companies
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อยู่ที่ AA และ A ตามลำดับ แต่พอหลังการควบรวมกิจการเป็นบริษัท Diageo ทำให้มีถูกลด rating เหลือเพียง BBB โดยRating Agencies ได้แก่ Standard and Poor’s และ Moody’s เนื่องจากเกิดความไม่แน่นอนของนโยบายทางการเงินของบริษัท บริษัท Diageo จึงต้องควบคุม Capital Structure ให้มีประสิทธิภาพ โดยการรักษาระดับของ interest cover ratio ไว้ 5-8 เท่า และคงระดับของ EBITDA/Total Debt ให้อยู่ที่ 30% - 35%ถ้าบริษัท Diageo ต้องการรักษา rating ให้อยู่ที่ระดับ A+ นอกจากนี้บริษัทจะต้องใช้นโยบาย Trade-off Theory ซึ่งเป็นการเลือกระหว่างความเสี่ยงและผลตอบแทน
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TAXATION PAPERS WORKING PAPER N.33 - 2012 Serena Fatica Thomas Hemmelgarn Gaëtan Nicodème The Debt-Equity Tax Bias: consequences and solutions Taxation and customs union Taxation Papers are written by the staff of the European Commission's Directorate-General for Taxation and Customs Union, or by experts working in association with them. Taxation Papers are intended to increase awareness of the work being done by the staff and to seek comments and suggestions for further analyses
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- Ajay Gnanashekaran - Shafrin Maredia Table of Contents Sl.No 1. 2. 3. 4. 5. 6. 7. 10. 11. Contents Evolution of Project Boeing 7E7 Empirical Data 7E7 Project NPV –DCF Analysis WACC Calculation Payback Period Stock Options @ Risk Analysis Conclusion References Page 1 4 5 7 11 12 22 23 24 Table of Tables Table Number Table
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of financing your business with a strictly low amount of debt. With all due respect, we would like to present our analysis of your current capital structure in order to give some insights that might cause you to reconsider this policy and to delve into the possibility of adopting a better one. Our in-depth examination of the issue at hand led our team to propose a capital structure of 70% debt as the optimal one. To begin, utilizing more debt for financing purposes would entail a greater EPS (earnings-per-share)
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What is an appropriate required rate of return against which to evaluate the prospective IRRs from the Boeing 777? 1a. which beta did you use? Why? 1b. if you used the CAPM, which risk premium and risk free rate did you use? Why? 1c. which capital-structure weights did you use? Why? Answer: i. Key Assumptions for the Calculation: In order to calculate the appropriate rate of return against which to evaluate the prospective cash flows from the Boeing 777 project, several assumptions had to
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