KENYATTA UNIVERSITY OPEN LEARNING PROGRAMME DEPARTMENT OF ACCOUNTING AND FINANCE UNIT CODE: BAC 502: UNIT TITLE: FINANCIAL MANAGEMENT Course Lecturer: F. Abdul LESSON ONE INTRODUCTION 1.1. What is Financial Management Financial management can be defined as the management of the finances of an organisation in order to achieve the financial objectives of the organization. The usual assumption in financial management for the private sector is that the objectives for the company is to maximize
Words: 6418 - Pages: 26
to December 2001 and net profit is negative $21,330 in December 2000 and reach positive $38,537 only one year later. As we can see, the company is a high growth company with huge potential. To meet its further growth needs, it going to public to finance more money. The advantage of IPO is by raising more capital, the firm could use the capital to fund capital expenditure (buy more airplanes), pay off existing debt and also it increase public awareness and let potential customers know their products
Words: 1787 - Pages: 8
Part A: PROBLEM-SOLVING QUESTIONS (Answer all FOUR questions). This assignment is 20% of the total mark. 1. Suppose a 10-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading for a price of $1034.74. (10 Marks) a. What is the bond’s yield to maturity (expressed as an APR with semiannual compounding)? CPN = PMT = $40 = 1000/2*0.08 P = $1034, 74 N = 20 FV = $1000 Using Therefore y = 3,75 And APR = 7.5% b. If the bond’s yield to maturity changes to 9% APR
Words: 1865 - Pages: 8
weaken UST’s cash flow. This report is prepared to consider debt policy for assessing a leverage recapitalization for UST and evaluate effect of dividend payment from buyback policy. After carefully evaluation of available information and using finance literature and relevant course lectures to conduct financial methodologies, including Unlevered beta, Value of levered firm with Financial Distress, Weighted Average Cost of Capital Analysis for Capital Structure Choice, and Proforma, I recommend
Words: 2282 - Pages: 10
with the pretax earnings of incorporated firms. Cases Xytech, Inc. provides practice in accounting for various owners’ equity transactions. Innovative Engineering Company involves comparison of alternative financing arrangements for a new company. UPC, Inc., examines the calculation of earnings per share for annual periods. Maxim Integrated Products, Inc., provides a platform to discuss accounting for stock options under PAS 123R. This is a new case with this edition. Problems Problem 9–1 a. (1)
Words: 5515 - Pages: 23
The Board may want to consider closing just the fridge division, and focusing on the parts manufacturing division, with the possibility of pursuing the option of the mobile refrigeration business. However, in this case, the problem of the lack of funding might continue. 2. Corporate Restructuring and Management Buy-Out Shareholders The shareholders would benefit from either proposal two or three, as opposed to the first proposal, as they stand to gain some funds. The restructuring proposal requires
Words: 5895 - Pages: 24
Journal of Financial Economics 00 (2002) 000-000 When a buyback isn’t a buyback: Open market repurchases and employee options Kathleen M. Kahle* Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, PA 15260, USA (Received 20 September 2000; accepted 6 June 2001) Abstract This paper examines how stock options affect the decision to repurchase shares. Firms announce repurchases when executives have large numbers of options outstanding and when employees have large numbers of
Words: 12612 - Pages: 51
Running Head: Financing Alternatives Lester Electronics Financing Alternative Benchmarking for Bernard Lester University of Phoenix MBA – 540 Introduction In this paper will compare and contrast issues that various companies had experienced in past mergers to the issues presented in the Lester Electronic Scenario. The companies benchmarked are Disney-Pixar, Lucent-Alcatel, Monaco Coach Corporation, SMC Corporation, Infosmart-Cyber Merchants, Fidelity Bank of Nassau, Royal Bank
Words: 5014 - Pages: 21
B1. Historical Analysis Historical analysis of Custom Snowboards financial statements shows the company’s net sales from 2012 to 2014. Net Sales In 2012 custom snowboards net sales were $6,874,700, net sales and continued to increase by .2% in 2013. Sales continued to increase throughout 2014, with net sales of $6,955,200 an overall increase of 1.2% from 2012 two 2014. Current Ratio Custom Snowboards profitability was at its highest in 2013 when the company’s Current Ratio was 7.06 in 2013
Words: 4559 - Pages: 19
Definition of 'Goodwill' An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company is purchased by another company. In an acquisition, the amount paid for the company over book value usually accounts for the target firm's intangible assets. Investopedia explains 'Goodwill' Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset such as buildings and equipment. Goodwill typically reflects the
Words: 6146 - Pages: 25
