earned or invested has a time value. Omega Health needs to be sure this principle is kept in check. 4. Valuation – Knowing that the current value of an asset is equal to the present value of future cash flows is critical. By understanding the formula of: Value = Present value of future cash flows 5. Bond Prices vs. Interest rates – Knowing if a bond is the best measure of raising money is critical for continued
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Appendix to Chapter 5 5A.1 a. The present value of any coupon bond is the present value of its coupon payments and face value. Match each cash flow with the appropriate spot rate. For the cash flow that occurs at the end of the first year, use the one-year spot rate. For the cash flow that occurs at the end of the second year, use the two-year spot rate. P = C1 / (1+r1) + (C2+F) / (1+r2)2 = $60 / (1.1) + ($60 + $1,000) / (1.11)2 = $54.55 + $860.32
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Case Study of Just For Feet Inc. Xuan Zhang Q1. Prepare common-sized balance sheets and income statements and compute key ratios for 1997-1998. What were the high-risk financial statement items for the 1998 audit? * Common-sized financial statements: * Key ratio analysis: Liquidity and solvency: | 1999 | 1998 | 1997 | Current ratio | 3.387 | 1.998 | 2.142 | Debt to equity | 1.117 | 0.672 | 0.720 | Times interest earned | 6.376 | 24.665 | 28.286 | Activity | |
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Source:ComfortDelGro Corportion Overview ComfortDelGro Corporation Limited, an investment holding company, operates as a land transport company. It operates a fleet of public scheduled and private charter buses; an inter-city bus station; taxis under Comfort and CityCab brand names; and underground driverless rail system and light rapid transit systems in Sengkang and Punggol. The company also engages in the rental, leasing, and distribution of cars; and provision of automotive engineering services
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Corporate Strategy Case Study Analysis WHAT IS CASE STUDY ANALYSIS? A case study presents an account of what happened to a business or industry over a number of years. It chronicles the events that managers had to deal with, such as changes in the competitive environment, and charts the managers' response, which usually involved changing the business- or corporate-level strategy. Cases prove valuable in a course for several reasons. First, cases provide you, the student, with experience of
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Estimating Cash Flow ------------------------------------------------- and Analyzing Risk ANSWERS TO BEGINNING-OF-CHAPTER QUESTIONS 13-1 The firm’s FCFs reflect both its past and current investments. Past investments produce current FCFs, but current investments are expected to add to FCF at some future point. Conceptually, a project’s projected cash flows and are expected to contribute that same amount to the firm’s future free cash flows. In practice, project cash flows are
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Judging Investments 161 NPV or IRR, Which to Use? 162 The “Yes–No” Criterion: When Do IRR and NPV Give the Same Answer? 163 Do NPV and IRR Produce the Same Project Rankings? 164 Capital Budgeting Principle: Ignore Sunk Costs and Consider Only Marginal Cash Flows 168 Capital Budgeting Principle: Don’t Forget the Effects of Taxes—Sally and Dave’s Condo Investment 169 Capital Budgeting and Salvage Values 176 Capital Budgeting Principle: Don’t Forget the Cost of Foregone Opportunities 180 In-House Copying or
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Capesizes Based on Age of Vessel | | | | | | | Over 24 years | 20 to 24 years | 15 to 19 years | 10 to 14 years | 5 to 9 years | Under 5 years | | | | | | | 0.65 | 0.75 | 0.8 | 1 | 1.05 | 1.15 | | | | | | | d). In terms of cash flow Ocean will have a positive Net
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FNBK 3250 Review Sheet for 3rd exam CHAPTER 10 COST OF CAPITAL Calculate cost of each capital source: After-tax (AT) cost of debt = rd(1 - T), where rd is the before-tax cost of debt and T = tax rate. Likewise, rd = AT/(1 – T). (rd = YTM on bonds) Cost of preferred stock= rp =Dp/Pp; where Dp is annual dividend payment per share and Pp is the preferred stock price per share. Cost of Retained Earnings= rs Constant growth model: rs = D1/Po + g; D1 = Do(1 + g) CAPM model rs = rrf
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Emami Ltd. Stock Note HDFCSec Scrip Code EMALIMEQNR Industry FMCG CMP (Rs.) 588.9 CMP: Rs. 588.9 March 22, 2013 Recommended Action Buy at CMP & add on dips Averaging Price Band (Rs.) 551-563 Price Target (Rs.) 686 Time Horizon 1-2 quarters Price Chart Background Founded in 1974 & promoted by Mr. R.S. Agarwal & Mr. R. S. Goenka, Emami Ltd., a flagship company of Emami Group, is one of the leading FMCG players engaged in manufacturing & marketing of personal care & healthcare products.
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