1) The dual-track process used by Ford to initiate “consideration of strategic alternatives” affects the bidding process for Hertz by giving Hertz another plan of attack if other viable sale opportunities fall through. By obtaining an IPO price as a base for the value of the company, Ford’s strategy would give Hertz other options to retrieve necessary capital, thus reducing the amount of risk. This strategy would then give Hertz a base bid that would be either equal to or above the amount of what
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QUESTIONNAIRE ON VALUING STOCKS By: Bahae eddine Boussouf Nadezda Vovk 1) Common stock: a share of ownership in the corporation, which confers rights to any common dividends as well as rights to vote on election of directors, mergers, or other major events. Preferred stock: A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the
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Bill Miller and Value Trust Case Analysis Case Facts: 1 By middle 2005, Leg Mason Value Trust managed by Bill had outperformed S&P 500 index for 14 years in a row. This was longest successful run by any fund manager. The average return on the fund was 14.6% which surpassed the S&P by 3.67% per year. The value trust only had 36 holdings, 10 of which accounted for 50% of the fund’s assets. No manager had matched Miller’s consistent index beating record. Miller’s results were in contradiction
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Calaveras Vineyards Case The appropriate TBV equations to calculate the firm’s WACC and FCF are: * R(after tax, wacc) = (E0/V0)rE + (D0/V0)rD (1-T) * FCF = TCF – corporate tax savings from deductable interest expense or * FCF = -NCPFA + Debt interest payment – corporate tax savings from deductible interest expense Below are the calculations for Calaveras Vineyards: * V1/1/1994 = (2,500)/1.126 + 357,000/1.126^2 + 463,000/1.126^3 + 590,000/1.126^4 + 780,000/1.126^5
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The Efficient Market versus The Inefficient Market Many professionals have spent an endless time researching about the efficiency of the market. 5 years ago, we experienced one of the worst financial disasters in history and a lot of questions have been asked about the degree of efficiency of the market. Being in a recession has never been more dangerous because of globalization; the whole world can be affected, just like what happened in the crash of 2008. It started in the United States and
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1. How Goldman makes money Part 1 and Part 2? Goldman by its size and political connections enjoys many advantages you and I can only imagine. Like the insurance companies who collect interest on premiums paid while waiting months to pay health providers for services delivered today they profit on “the float”. Their size allows them to create runs in markets, shoring commodities floods the market and creates downward pressure through supply and demand, and then when the price drops they cover
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Efficient Capital Markets Topic 4 Davenport University FINC 620 - Financial Management June 3, 2016 Efficient capital markets Market Efficiency An efficient capital market is: “A market where information regarding the value of securities are incorporated into its prices accurately and in real time. Since the value of securities fluctuates depending on the present value of future cash flows, an efficient capital market enables these fluctuations to be
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innovation, their strong position in key geographic markets and the consistently high quality of their products and "High-Touch" services. At first,fundamental analysis uses earnings and dividend prospects of the firm ,expectations of future interest rates,and risk evaluation of the firm to determine proper stock prices.So l will use the fundamental analysis to analyze this chart. From the chart above,we can find that earning per share goes up gradually.It shows that EL company tend to be mature
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Chapter 7 - Positive Theory Positive Accounting Theory Philosophy of PAT Million Friedman championed positive theories in economics. He stated that: (part 3 Empirical Research in Accounts of Accounting theory from Jayne Godfrey) The ultimate goal of positive science (i.e. INDUCTIVE) is • The development of a ‘theory ‘ or ‘hypothesis’; • that yields valid and meaningful “Predictions’ • about phenomena not yet “observed”. Consistent with Friedman’s view, Watts and Zimmerman asserts that:
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Questions for the Roche case Case write-ups due on Wednesday, March 30, at 8:10 pm 1. Why is Roche seeking to acquire the 44% of Genentech it does not own? From Roche’s point of view, what are the advantages of owning 100% of Genentech? What are the risks? (1 pt) Roche already had 56% of shares of Genentech and now it seeks to acquire rest of the 44% shares so as to get the benefits of synergies. The pharmaceutical companies have been unable to introduce new products lately, and their only
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