27708, USA National Bureau of Economic Research, Cambridge, MA 02912, USA Received 2 August 1999; received in revised form 10 December 1999 Abstract We survey 392 CFOs about the cost of capital, capital budgeting, and capital structure. Large "rms rely heavily on present value techniques and the capital asset pricing model, while small "rms are relatively likely to use the payback criterion. A surprising number of "rms use "rm risk rather than project risk in evaluating new investments. Firms
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Lehigh Steel Harvard Business School Case: 9-198-085 Instructor Prof. K. M. Padmanabhan 12/16/2011 Submitted By Section E, Group 8 Aravind Ganesan 2011PGP448 Gadkhel Rohit 2011PGP629 Gokulnath R 2011PGP638 Kartik Shrivastava 2011PGP685 Sumit Prakash 2011PGP907 Upasana Mukherjee 2011PGP922 Vemb V 2011PGP932 The task is to evaluate the best costing alternative for Lehigh steel. For this, an improvised costing system is developed which overcomes the assumptions of ABC and
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Problem Solution: InterClean, Inc. A look at the InterClean strategies reveals that the organization is in a ripe form for change of structure, business process, Human Resource (HR) alignment, communication process and employee management. A change is inevitable; the successful management of a change with buy-in from all affected quadrants is the ideal situation for InterClean to achieve the merger with EnviroTech. Such a solution can be found with the right implementation of the HR domain statement
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12 Integer Programming In Chap. 3 you saw several examples of the numerous and diverse applications of linear programming. However, one key limitation that prevents many more applications is the assumption of divisibility (see Sec. 3.3), which requires that noninteger values be permissible for decision variables. In many practical problems, the decision variables actually make sense only if they have integer values. For example, it is often necessary to assign people, machines, and vehicles to
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cost of capital and estimate the cost of placing an order. Assume that the annual inventory cost of a unit is given by, CH = iCI, where i is the cost of capital and CI, the unit cost of the item. 2. Consider the connector data and the all unit price structure described in Table 1. For each price level ($5.00, $4.75, etc.) determine the EOQ, and the corresponding total annual cost. Sketch the total annual cost as a function of the order quantity. Based on these results, identify the optimal ordering
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outstanding. What is your estimate of the current price per share? 3. a) Klose Outfitters Inc. believes that its optimal capital structure consists of 60% common equity and 40% debt, and its tax is 40%. Klose must raise additional capital to fund its upcoming expansion. The
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on strong hand’ written by Jonathon Shapiro and published in an August 2011 edition of The Australian Financial Review, discusses how ANZ raised $750 million in hybrid capital (capital combination of debt and equity characteristics) in order to maintain its already strong capital position and balance sheet. ANZ has a Tier 1 capital ratio of 10.6% compared to Westpac, NAB and the Commonwealth Bank of Australia and will only improve with further equity issuance. The ANZ treasurer spoke of the company’s
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and consists of three main questions. Marks will be allocated as indicated for each question below. Your total assignment submission (excluding your reference list) should not exceed five (5) A4 pages. Question 1: Cost of Capital (8 marks) You are to estimate the cost of capital for Boral Ltd, an Australian listed company, at its half year ended (31 December 2014). Boral manufactures and supplies building and construction materials mainly in Australia but also in the USA and Asia. Boral uses both
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Wesfarmers re-financed the $4bn bridging facility with debt. i) Pro-forma financial statements [pic] Comments on results: Under the alternative financing scenario, the $4 billion bridging facility used to fund Coles acquisition and working capital is replaced by a long term debt facility. The debt facility has the same terms as the USD650 million (i.e. AUD $711 million) bond issue which has a 5-year duration at 6.998% p.a. interest rate. The interest bearing debt will increase by $3,289
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alculations)for)the)problems) section;)you)must)do)so)to)receive)full)marks.)You)must)hand$in$everything,)upon)completion)of) the)exam.)You)have)two$hours)to)complete)the)exam.)) 1. Suppose a firm uses a constant WACC in determining the value of capital budgeting projects rather than using the security market line. The firm will tend to _____________________. A) accept profitable, low risk projects and reject unprofitable, high risk projects B) accept profitable, low risk projects and accept unprofitable
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