Contribution to current literature and stakeholders 5 Section One 6 Motivation of M&A’s 6 Synergy 6 Agency theory 7 Hubris 7 Relationship between motives and financing 8 Section Two 9 Payment methods 9 Financing hierarchy vs. market conditions 9 Differing views on leverage 10 Valuation and the agency problem 10 Managerial ownership 11 Section Three 12 Performance of mergers and acquisitions 12 Performance indicators 12 Methodology 13 Profitability 13 Performance
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Financial Terms and Roles Alvaro Garcia Jr. FIN/370 August 19, 2013 Dr. Rachel Ang Finance – Individuals and businesses evaluate investments and raise capital to fund them. Understanding and having knowledge of finance will benefit both personal and professional life. Efficient market – Investors respond to new information buying and selling their investments the speed with which investors act and the way that prices respond to the information determine the efficiency of the market. Primary
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Section‐B Case Study: A Bill with A Class Act The role of a well‐functioning financial market is to create conditions wherein the savings in the economy can be smoothly channelized into investments. To make this transmission smooth and attractive for all stakeholders, it’s important that everyone plays by the rules. So, the rules have to be well defined and the interests of all stakeholders adequately protected. Stock markets in India are regulated and monitored by the Securities and Exchange Board
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Financial Terms and Roles · Finance -- The science of the management of money and other assets. · Efficient market – A market in which prices correctly reflect all relevant information. · Primary market – This is part of the capital market that deals with issuing of new securities. · Secondary market – This part also called the aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options
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Lecture 3 1. Assume you purchased 700 shares of XYZ common stock on margin at $50 per share from your broker. If the initial margin is 65%, how much did you borrow from the broker, what is the margin? 2. You purchase 100 shares at $60 per share and margin = 50%. Suppose stock rises to $80/sh (increase of 33%). What is your return? Suppose stock drops to $40/sh (decrease of 33%). What is your return? 3. Investor opens a brokerage account and purchases 300 shares of XYZ at $40 per share. She borrows
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1. Yes. Robertson Tool Company had been going through a few years of low sales and profit, and, coupled with conservative financial and accounting practices, was far behind the normal growth rate for companies in its industry. Robertson’s 50% control of the market for clamps and vises, along with its good position in the scissors and shears’ $200 million market, let it compliment the diverse holdings of Monmouth. These are attractive attributes of Robertson, but the selling point lies in the
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com I. PROJECT PROPOSED: “IMPACT OF OPEN INTEREST ON EQUITY MARKET TRENDS” II. DESCRIPTION OF THE PROJECT IN BRIEF: This project has been initiated for the purpose of acquainting me with the basics of the financial terminologies used in the stock markets along with the in-depth knowledge on how derivatives work and the impact of open interest on options. One of the most important concepts of the Derivatives Market is ‘Open Interest’. Open Interest (OI) is the total number of outstanding
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helps us to take investment decisions. • If Estimated Value > Market Price, Buy • If Estimated Value < Market Price, Don’t Buy How can equity be valued? • DDM • Relative Valuation • CAPM In discounted cash flow valuation, the objective is to find the value of an asset, given its cash flow, growth and risk characteristics. In relative valuation, we value an asset based upon how similar assets are currently priced in the market. A prospective house buyer decides how much to pay for
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Questionnaire Q1. Preference of investment, is cash market , derivatives market or both? • Only cash/capital market • Only derivative market • Both Q2. The time period for which they are investing? • Less than 1 year • 1-5 year • More than 5 year Q3. Proportion of income they invest in shares and securities? • Up to 5% • 5 to 10% • 10 to 25% • More than 25% Q4.Trading Frequency? • Daily • Monthly • Weekly • According to Market Q5.Trading advice? • On your own • Expert Opinion
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stay competitive and profitable. To achieve this goal, Larson Inc, will need to prepare for credit markets and global conditions. In this memo we will present recommendations for Larson Inc, so they can create profitable outcomes over the next few years. Credit Markets: The leaders of the Larson Inc must understand what the current and projected credit markets. The credit market is a broad market that encompasses investment-grade and junk bonds as well as short-term commercial paper. Commercial
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