effects to the management which intends to hinder shareholders right. The purpose of which is to investigate whether managerial ownership affects the associations between the shareholders rights and the cost of equity capital. There are two variables in the article which can be clearly identified. The variables are; 1) The shareholders rights and 2) The cost of the equity capital. 1) THE SHAREHOLDERS Shareholders should have the right to discipline the managers, who are the employees of the organization
Words: 4117 - Pages: 17
circumstance. Therefore, WorldCom made acquisition of MCI in 1997. WorldCom made this decision through three main reasons. At first, since WorldCom was the No. 4 long distance provider and MCI was the No.2 long distance provider, the combination of the two firms could occupy 25% share in the U.S. long distance market. This situation consolidated WorldCom’s competiveness in such a depressing environment and decreased the risk in the long distance service market. In addition, the acquisition also combined
Words: 4227 - Pages: 17
The relationship between stock prices and exchange rates in China Mengyuan Chen Illinois Wesleyan University Dec 10, 2012 Abstract This paper uses the data of RMB exchange rates and stock market prices in China from 1994 to 2011 to estimate the relationship between stock prices and exchange rates. There are two major theories concerning the relationship. According to the portfolio balance effect, these two variables should be negatively related; in addition, according to the international trading
Words: 2999 - Pages: 12
2008. More precisely, we will be looking at a combination of causes such as the sub-prime mortgage crisis, the mortgage backed security, the collateralized debt obligation as well as how the incidental credit-default swap contributed to the incident. This paper will begin from analyzing the past, when it happened and how it built up and resulted in the financial crisis. The significance of this literature review seeks to give a simplified explanation of the financial crisis of 2008 and will be useful
Words: 7947 - Pages: 32
4: TVM PV & FV: SINGLE CASH FLOWS Future Value: FV = PV × (1 + r)n Present Value: PV = Future Value (1 + r)n PV & FV: MULTIPLE CASH FLOWS Example 1: Multiple Cash Flows In two years from today, the following cash flows will have a future value of $3032.32: $200 today, $Y at the end of one year, and $2,400 at the end of two years. The annual interest rate is 4%. What is Y? A) $330.00 B) $400.00 C) $416.00 D) $432.64 E) $167.55 PERPETUITIES & ANNUITIES Ordinary (regular) Annuity & Ordinary Perpetuity
Words: 3875 - Pages: 16
work among themselves but not refer to the work of any other groups. Any collusion of this form will be treated very seriously and penalised. 3. Please ensure that each member in a group makes an equal contribution to the assignment, as far as possible. Free riders should be reported to me and may be penalised. 4. You are expected to make this assignment an opportunity to develop you spreadsheet computational skills. Make use of Excel to do your calculations and charts/graphs. 5. Assignments
Words: 1087 - Pages: 5
Institute of Certified Public Accountants, are important to the efficient functioning of the economy. It is in the best interest of a capital market that investors and potential investors have complete and reliable information provided them so they can make proper decisions in resource allocation as well as capital distribution. Introduction Making sound investment decisions is contingent upon investors being provided with reliable and useful accounting and financial reporting. Creditors and
Words: 2406 - Pages: 10
because the flight, the event on which the revenue is based has not occurred yet. Acquisition - When one company purchases a majority interest in the acquired. Ad valorem -A tax based on the assessed value of real estate or asset. Ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenue for state and municipal governments. Explanation: The phrase ad valorem is Latin for "according to value". In the case of municipal property
Words: 19165 - Pages: 77
Q1] what is the maximum permissible bank finance? As per the recommendations of Tandon Committee, corporates should be discouraged from accumulating too much of stocks of current assets and should move towards very lean inventories and receivable levels. The committee even suggested the maximum levels of Raw Material, Stock-in-process and Finished Goods which a corporate operating in an industry should be allowed to accumulate These levels were termed as inventory and receivable norms. Depending
Words: 15319 - Pages: 62
FINANCE • Finance is the study of how resources are valued and allocated in time. • Outcomes of financial decisions are spread out over time and not known with certainty in advance • Three key concepts in finance are : Time value of money Asset Valuation (stocks, bonds, derivatives,...) Risk management 1.1: Interest and return • Income almost never matches consumption desires exactly. Either one will need to borrow to purchase more than one can afford or save excess income. • Costs
Words: 3782 - Pages: 16
