The Portfolio Theory also known as Modern Portfolio Theory was first developed by Harry Markowitz. He had introduced the theory in his paper ‘Portfolio Selection’ which was published in the Journal of Finance in 1952. In 1990, he along with Merton Miller and William Sharpe won the Nobel Prize in Economic Sciences for the Theory. The theory suggests a hypothesis on the basis of which, expected return on a portfolio for a given amount of portfolio risk is attempted to be maximized or alternately the
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Aftab Automobiles Limited Dividend Policy |Year |Earning per (EPS)share |% Cash |% Stock dividend |Dividend per share (in|Pay out ratio | | |(in taka) |dividend (in Dividend| |taka) | | |2005 |86 |20 |- |20 |23.26% | |2006 |28 |20
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Bachelor of Finance & Banking Thesis -------------------------------------- The impact of capital structure on profitability of listed construction companies on Hanoi Stock Exchange from 2008 to 2013 FALL 2014 Instructor Mr. Tran Viet Dung Group members Nguyen Thi Thanh Tam (FB00464) Nguyen Thi Viet Chinh (FB00405) Hoang My Linh (FB00073) Dang Thi Hong Hanh (FB00253) Nguyen Thi Kieu Trang (FB00078) Hanoi, December 2014 Table of Contents List of tables 3 List of figure 4 Abstract
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Chapter 3. The Optimal Capital Budget Up this point, we have discussed some of the issues regarding a firm’s cost of capital and capital budgeting decisions. In the process, we have looked at some of the techniques a financial manager can use in identifying the cost of various forms of capital and choosing projects that are “profitable” to the firm. Based on our earlier discussions, we know there is a significant relationship between a firm’s cost of capital and capital budgeting decisions. In
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cost of capital is 12.5 percent. She feels that the company would be more valuable if it included debt in its capital structure, so she is evaluating whether the company should issue debt to entirely finance the project. Based on some conversations with investment banks, she thinks that the company can issue bonds at par value with an 8 percent coupon rate. Based on her analysis, she also believes that a capital structure in the range of 70 percent equity/30 percent debt would be optimal. If the
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theorem forms the basis of modern thinking on capital structure. The theorem states that under a certain market price process, in the absence of taxes, bankruptcy cists, agency costs and asymmetric information, an in an efficient market, the value of a firm is unaffected by how the firm is financed. Whether the firm’s capital is raised by issuing stock or selling debt does not affect the value of the firm. This theory is also referred to as the capital structure irrelevance principle, which we have already
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[pic] ILLUSTRATION 1 COMPUTE THE COST FOR THE FOLLOWING: a. A bond that has a Rs 1,000 par value (face value) and coupon interest rate of 12 percent. A new issue would have a flotation cost of 5 percent of the Rs 1,100 market value. The bonds mature in 10 years The firm's average tax rate is 25 percent and its marginal tax rate is 30 percent. b. A preferred stock paying a 9 percent dividend on a Rs 100 par value. If a new issue is offered, flotation costs will be 5 percent
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Advanced Corporate Finance [FN2] Examination Blueprint 2013/2014 Purpose The Advanced Corporate Finance [FN2] examination has been constructed using an examination blueprint. The blueprint, also referred to as the test specifications, outlines the content areas covered on the examination and the weighting allotted to each content area. This document also lists the topics, the level of competence for each topic, and the related learning objectives and competencies. The learning objectives have been
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Running head: PROBLEM SOLUTION: GENE ONE Problem Solution for Gene One University of Phoenix MBA 520 – Transformational Leadership Problem Solution for Gene One Change is inevitable in any organization; however, there are a myriad of approaches toward that change and the individuals involved. Change relates directly to organizational behavior and leadership style. This problem analysis and suggested solution will look at a scenario entitled Gene One and will explore the challenges facing
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financial management till the concept of wealth maximization came into being. It is a superior goal compared to profit maximization as it takes broader arena into consideration. Wealth or Value of a business is defined as the market price of the capital invested by shareholders. Wealth maximization simply means maximization of shareholder’s wealth. It is a combination of two words viz. wealth and maximization. A wealth of a shareholder maximizes when the net worth of a company maximizes. To be even
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