the Modigliani-Miller capital structure irrelevance propositions and the concept of debt tax shields. With the background of a pizza company, the case provides an engaging context to discuss the “pizza graphs” that are commonly used in corporate finance curriculum to illustrate the wealth effects of capital structure decisions. Objectives: * Introduce the Modigliani-Miller intuition of capital structure irrelevance; * Establish how the cost of equity is affected by capital structure
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What were the risks posed by Georgia and what mechanisms did AES use to mitigate these risks? The financial losses of the electricity sector of Georgia totaled between a quarter of a billion and $400 million. The government believed that a private investor could help mitigate the risks and losses for Georgia. One profound problem that needed attention was the delayed maintenance and repairs that the government lacked the capital to undertake. This, in effect, allowed for only 42% available capacity
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To: Janet Mortensen, CFO From: Senior Financial Analyst Division Date: October 7, 2013 Re: Midland Energy Resources Inc. Weighted Average Cost of Capital Midland Energy Resources Inc. is a publicly traded company that primarily deals in the energy industry. The company itself is divided into three major operational divisions, two of which that is concerning to the company include: Oil and Gas Exploration and Production (E&P) and Refining and Marketing (R&M). The Petrochemicals division will not be
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INTRODUCTION No business functions without finance. For there to be business concern therefore, there must be money. Development has however, changed the business operations in the capital globalize markets. People invest in business to make returns. It is therefore imperative for an individual to invest as well as institutional investors. Prior to development in capital markets, individual investors used to make their own investment decisions. But all these are changed now as individual investors
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Why is Finance so Important to a business? Finance is a crucial part of a start-up business; it is the cornerstone to determine whether or not your business will jump over the first hurdle. Without sufficient finance, a business has a very low risk of surviving the first stage of development. Finance can be important for various activities throughout the business starting with the purchasing of stock. If you are providing a product you will most likely need raw materials, if not then you will need
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ACKNOWLEDGEMENT I would like to convey my sincere thanks to ALLAH because he has given me the opportunity to complete my internship .The Almighty for whom we are living in this beautiful world and able to conduct our works. Off course, I acknowledge the support & assistance given by a number of people. I am grateful to many individuals for the completion of the report successfully. Stamford University Bangladesh & Islami Bank Bangladesh limited both provided enormous support & guidance
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Zieme Somda Homework week 3 5-1 let’s pose the equation of the bond value VB = INTr*[ 1-(1-rd)-n]/i+M*( 1+rd)-n INT= par value =1000 M =maturity risk is not given r = coupon rate per coupon payment period = 0,8 rd= effective interest rate / coupon payment period = 0,9 n = number of coupon remaining = 12 Since the the maturity value is not given we assume that it is the same than
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TIME VALUE of MONEY Exercises Author: Luigi V. TAVA Copyright SDA Bocconi revised 2004.10 EMQ 901 1 1) For a loan of 9.2 estimate the future refund value (principal, interest, total) with simple interest: a) yearly rate 5%, for 6 years and 4 months b) yearly rate 8%, for 7 years, 2 months and 15 days 2) With a starting investment of 3.65 how long does it take to have a final total value of 4.779 with a 5.2% yearly rate, simple interest ? 3) 10 years ago you deposited 15.6 in a bank account
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How has the Economy Affected The Way Federal Managers Reward Their Staff? Tonya R. Johnson University of Maryland University College Professor Kuyatt Executive Summary This research paper provides an analysis and evaluation of the current state of the federal government budget and how federal employees are being affected. The methods of analysis include information on causes of the financial crisis the government is experiencing, the impact, program cuts and the burden it is having
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And once the Benettons have a vested interest in these firms, they would like to monitor and exert financial control over them. The above scenario is sufficient for re-focusing the business strategy to diversify into investment banking, corporate finance, brokerage houses, and leasing firms, but then the Benettons would be expected to take a 360' view. As the developed nations like Italy no longer remain the big industry giants, banks and financial institutions will begin channeling funds abroad to
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