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 are concerned about "nancial
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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 are concerned about "nancial
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Pre-Feasibility Study DENIM JEANS STITCHING UNIT Small and Medium Enterprises Development Authority Government of Pakistan www.smeda.org.pk HEAD OFFICE 6th Floor LDA Plaza Egerton Road, Lahore Tel (042)111 111 456, Fax: (042) 36304926-7 helpdesk@smeda.org.pk REGIONAL OFFICE PUNJAB 8th Floor LDA Plaza, Egerton Road, Lahore. Tel: (042) 111 111 456, Fax: (042) 36370474 helpdesk.punjab@smeda.org.pk REGIONAL OFFICE SINDH 5TH Floor, Bahria Complex II, M.T. Khan Road, Karachi. Tel: (021)
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Business Executives Advanced Diploma 1.34CF CF0608 Corporate Finance afternoon 5 June 2008 1 Time allowed: 3 hours. 2 Answer any FOUR questions. 3 All questions carry 25 marks. Marks for subdivisions of questions are shown in brackets. 4 Present value and annuity tables are included in this question paper on pages 9 and 10. 5 No books, dictionaries, notes or any other written materials are allowed in this examination. 6 Calculators, including scientific calculators, are allowed providing they are not
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acquisition? Explain your answers. Answer: Synergy is by far the most socially justifiable reason for mergers. Synergy occurs when the value of the combined enterprise exceeds the sum of the values of the pre-merger firms. (If synergy exists, the whole is greater than the sum of the parts, hence, synergy is often described as "2 + 2 = 5.") A synergistic merger creates value, which must be allocated between the shareholders of the acquiring and the acquired firms. Synergy can arise from many sources, the
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4/28/2015 Table of Contents TASK REQUIREMENT 25% 3 WEIGHTED AVERAGE COST OF CAPITAL (WACC) 3 WACC Formula: E /V * Re + D/V *Rd * (1-Tc) 3 DEMONSTRATION OF APPLICATION KNOWLEDGE 55% 5 Describe capital structure 5 Indicate how these might be useful to determine the feasibility of the capital project 5 Recommend which is more appropriate to apply to project evaluation. 5 Define marginal cost of capital 5 ACADEMIC WRITING 20% 7 References 7 Footnotes 8 Tables 9 Figures 10
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Telstra Corporation Limited is taken as a benchmark due to its huge success in Australia. The trends show very positive results indicating management efficiency, asset efficiency and operations efficiency. ATH beta was calculated against the STRI values of the market and ATH. This was then used to determine WACC of the company. Beta was found to be 0.6 indicating ATH’s lower risk portfolio compared to the market. Required rate of return was calculated to be 9%. A discount factor of 7% was obtained
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associated with development costs and projected sales revenue to support a decision.Using the data given, we have built a simulation model that takes into account all of the variables and their uncertainty. The model predicts, using randomly generated values of the uncertainties, a cost of development and production (including the chance of failed customer testing) and a revenue volume (if the simulation leads to commercialization). These two amounts are compared and if the revenues (in 2002 dollars)
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Table of Contents Definition of capital budgeting 2 The Major Capital Budgeting Techniques 4 Payback Period 4 Internal Rate of Return 7 Factors Influencing Capital Budgeting 7 Need For Capital Budgeting 7 Capital budgeting project 8 References 9 Definition of capital budgeting Capital budgeting is the planning process used to determine whether an organization's long term investments such as new machinery, replacement machinery, new plants, new products, and research
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Chapter 1 Introduction to Information Technology Investment Decision-Making Learning Objectives After completing this chapter, you should be able to: • • • • • Describe different types of IT investment decisions manager face. Briefly describe some of the methodologies that are used in IT investment decision-making. Explain why IT investment decision-making is important as a subject to study. Explain some of the limitations that should be considered when using IT investment methodologies. Explain
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