invest on the stock of Nike, Inc. Your expected return is 12% for one year. The current share price is $42. Your benefit of the investment to purchase one share will be $5.04. If the company pay the dividend of $2.04 per share annually, the share value should increase to $45 in the next year to secure your benefit ($5.04). Therefore, the cost of equity is to cope with the risk of share price’s changes and the dividends paid by the company. There are two techniques to obtain the cost of equity as
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would cost the firm $90,000 initially, but would last ten years, which at that time would hold salvage value of $5,000. To start, I would calculate the criteria of the NPV, IRR, Profitability index and the payback period. metalcrafters Inc. would have more of an advantage at deciding which investment to recommend to the budget committee. I say this because with NPV they can look at the present value of all future cash flows. IRR, profitability index, and discounted payback criterions usually favor
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market price = $309.29 Face value = $300.00 Annual coupon rate = 13.5% ( paid half yearly) Further flotation cost ( if any) = $1.50 (300* 13.5%) = 40.5/2 = 20.25 Present value of annuity = $20.25 Pmt = $20.25 MP= Pmt * 1 – ( 1)/ (1+i)^n i 20.25 * 1 – 1/ ( 1+ 0.00675)^ 14 0.0675 = $ 179.78 Discount back the face value to 0 = FV….. ( 1+i)^n
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Experiment by changing the input values to see how quickly the output values change. b. Now create a table that shows the FV at 0%, 5%, and 20% for 0, 1, 2, 3, 4, and 5 years. Then create a graph with years on the horizontal axis and FV on the vertical axis to display your results. Begin by typing in the row and column labels as shown below. We could fill in the table by inserting formulas in all the cells, but a better way is to use an Excel data table Note that the Row Input Cell is D9
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eleven mainstream brands and eleven independent brands. The main objective of the company is to maximize the shareholders’ value by providing travel services to its customers. Since its inception, the focus of the company has been on maximizing shareholders’ value, becoming the leading financial service provider in terms of travel-related activities, achieve growth and increase value through mergers and acquisitions, and be the top independent travel provider (Group Strategy, 2012) The paper focuses
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CAPITAL BUDGETING ANALYSIS REPORT TO LAM REGARDING POTENTIAL INVESTMENT OPPORTUNITY APARTMENT COMPLEX 830 S. Westlake Avenue Los Angeles CA 90057 Presented by: GRETA BANYTE April 14th, 2010 Well maintained apartment building, built in 1964, located at 830 S. Westlake Avenue, in Los Angeles, is listed at the price of $5,700,000. The building is close to the 10, 110 and 101 freeways, as well as it is 1 mile from Mid Wilshire, 1.2 miles from Downtown, 2
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Managing Financial Resources and Decisions By (Name) Name of Class (Course) Professor Name of the School State and City Date Managing Financial Resources and decisions Managing financial resources entails the process of input maximization with the scarce resources. This process calls for maximizing opportunities within an organization through the adoption of proper management procedures. These procedures will not only help an organization
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dsohwarnesstroenamocsceacstion,oaf nand ohilaadnsdtagtaesd that it would do so again whenever attractive opportunities arose. Consequently, the company regularly estimated industry with expected growth of capital spending in the near term on new facilities. the intrinsic value of its shares by subtracting
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a separate division. Divisional managers have complete autonomy with respect to operating and investment decisions. The company evaluates its division managers on ROI, calculated as operating income before taxes (for that year) divided by net book value of assets (at the beginning of that year). The firm pays particular attention to year-over-year growth in ROI as well as budget-actual comparison of the measure. Wendy Miller is the manager of the dishwasher division. Wendy expects that the operating
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ACCT 346 WEEK 6 QUIZ A+ Graded Tutorial Available At: http://hwsoloutions.com/?product=week-6-quiz Visit Our website: http://hwsoloutions.com/ Product Description ACCT 346 Week 6 Quiz, Incremental analysis [If Serving Pieces dropped]: Table 1 Snail Extraction Serving Total Tools Pieces Sales [$1,200,000 * 1.13] $1,356,000 $1,356,000 Less: Cost of goods sold [500,000/1,200,000 * 1,356,000] $565,000 $565,000 Contribution margin $791,000 $791,000 Less: Avoidable direct fixed costs:
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