fixed-income security, which might include a sinking fund provision and either refunding or call protection. a) Describe a sinking fund provision. The sinking fund provision allows the firm to repurchase a fraction of the outstanding bonds at either the market price or the sinking fund price (usually set at par), depending on the structure of the provision. The provision may be for a specific number of bonds or a percentage of the bond issue. The bonds selected for repurchase are generally selected at random
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CHAPTER 16 2. Baruk Industries has no cash and a debt obligation of $36 million that is now due. The market value of Baruk’s assets is $81 million, and the firm has no other liabilities. Assume perfect capital markets. a. Suppose Baruk has 10 million shares outstanding. What is Baruk’s current share price? Assets – debt / shares 81-36/10 = 4.5 $4.50 per share b. How many new shares must Baruk issue to raise the capital needed to pay its debt obligation? Debt / share price 36/4.5 = 8 million
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decade has made Indian financial markets more integrated with the rest of the world. As a result, many Indian companies have gone for raising funds in foreign capital markets by way of issuing ADRs and GDRs. Though cross listing is viewed positively by many corporations, many researchers have shown that changes in liquidity and volatility may affect quality negatively in the domestic markets. Since companies from emerging markets go for raising funds from foreign liquid markets, some policymakers
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Innovations and Inclusive Growth A Case of Banking Industry in India Kiran Kumar Kakarlapudi Background and Motivation India has entered high growth trajectory with the initiation of economic reforms in the early 1990s with a policy shift towards free market economy.1 While on the growth front, the economy has performed considerably well, on the other hand the issue of distributional effects of growth has gained momentum in the academic and policy environment. Thus, in the eleventh and twelfth five year
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All companies must make decisions about how they will finance their current and future operations. Firms can elect to borrow funds or they can sell stakes in the company to shareholders. For companies to make these decisions, they need to consider the capital structure, or mix of debt and equity, of the firm. They must also determine the cost of their debt, the cost of their equity, and the cost to acquire new capital. Generally, a firm’s cost of capital is what it costs the firm to acquire money
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Stock Commercial Bank for Industry and Trade report, The Beta is 1.52 Reference link: http://cafef.vn/hastc/CTS-cong-ty-co-phan-chung-khoan-ngan-hang-cong-thuong-viet-nam.chn Part 2: Nowadays, financial market keeps changing so fast, which would affect a lot almost investors, especially with efficient market. Post earning announcement drift (PEAD) is the tendency of stock returns to continue moving in direction of thee earning surprise for a year after the initial disclosure of earning. However, will
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fair value. The notion of fair value accounting is intuitive when applied to quoted investments such as equities, bonds, commodities, etc. that are carried in an entity’s balance sheet at their market value. This form of fair value accounting is often termed mark-to-market accounting. However, while market prices are one aspect of fair value measurement, the term is increasingly being used to describe measurement by other means. For example, accountants often arrive at an estimate of fair value for
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securing a government construction project through private financial initiative (PFI - company will build with own source of funding and government will pay later). Being a conservative businessman, his late father kept almost all the company reserves in cash (RM30 million), owned a few parcel of agricultural land in Malaysia (book value at RM40 million) and 5 shop-lots (commercial properties) in several parts of Kuala Lumpur. The total estimate market price of the whole commercial property is about RM20
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return, E(Rm) is expected return on market proxy and (i; is a measure of risk specific to asset i. This relationship between expected return on asset i and expected return on market portfolio is also called the security market line. If CAPM is valid, all securities will lie in a straight line called the security market line in the E(R), (i frontier. The security market line implies that return is a linearly increasing function of risk. Moreover, only the market risk affects the return and the investor
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NAV = Market value of assets - liabilities Shares outstanding HPR(Funds) = Income Dist. +Capital Gain Dist. +Ending NAV-Beginning NAV)Beginning NAV Portfolio Turnover = ($ Sold & Repurchased)Average Daily Assets Tax Efficiency = Tax-Adjusted ReturnPre-Tax Return Average Holding Period = 12 months / (portfolio turnover/100) HPR = (Ending Price-Beginning Price+Cash Divi.)Beginning Price Arithmetic Mean = Simple Average = (R1 + R2 + …+ Rn) /n Geometric
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