Assignment 1-Financial Research Report FIN 534: Financial Management Hannah Fox Dr. Dana Leland August 30, 2015 The U.S. publicly traded company that I have selected is Kroger. Kroger is a grocery retail chain in the US. It operates supermarkets and multi-department stores under a number of banners including Kroger, Harris Teeter, Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, Jay C, QFC and City Market. According to The (Kroger Co. SWOT Analysis, 2015), the company
Words: 4580 - Pages: 19
plants in the foreign market which in turn strengthened its presence through economies of scale. What is important CEMEX targeted companies which market value was lower than its underlying values: WACC, profitability, capacity etc. Geographic diversification had also reduced earnings volatility. For example when peso crisis happened in Mexico and Mexican cash flows could not be used for FDI, CEMEX used its non Mexican assets from Spain to further finance new acquisitions. 2. How specifically has
Words: 902 - Pages: 4
Chapter 3, 13th edtion Financial Statements, Cash Flow, and Taxes Learning Objectives After reading this chapter, students should be able to: ◆ List each of the key financial statements and identify the kinds of information they provide to corporate managers and investors. ◆ Estimate a firm’s free cash flow and explain why free cash flow has such an important effect on firm value. ◆ Discuss the major features of the federal income tax system. Lecture Suggestions
Words: 5225 - Pages: 21
managers should explore positive NPV projects to to determine the cshflow estimate and the source of value. When the market is efficient the cost of capital in the market is a good estimate of the return required. (5 marks) a. Give two examples of anomalies in the financial markets. Seasonality of stock prices (January Effect) which is when firms with small capitalizations have high returns in the first days of the new year so investors buy small capitalizations stocks in December. Bubble
Words: 3010 - Pages: 13
Therefore, EVA basic formula is calculated using NOPAT to reflect firm’s return from its operations: EVA = NOPAT – After-tax dollar cost of capital used to support operations = NOPAT – (Total net operating capital x WACC) Where, NOPAT = Net Operating Profit After Taxes WACC = Weighted Average Cost of Capital Total Net Operating Capital is another term of Invested Capital (IC) From this formula, it can be seen that EVA represents the residual income that remains after the cost of all capital
Words: 2471 - Pages: 10
techniques Sum-of-the-parts analysis – If a target has more than one lines of business, the financial advisor will value each business separately. Therefore, each “part” might have its own Public Comps, Transaction comps and DCF (with different WACCs for each part). The total value is the sum of the parts Other –depending on the unique characteristics of the transaction, financial advisors will perform a number of other analyses to arrive at fair value like Leveraged Buyout (“LBO”) Analysis
Words: 3013 - Pages: 13
Discuss each single one of the main risk factors that should be allowed for (in addition to WACC) in order to determine the appropriate required return on this capital investment opportunity. In 2011, China surprisingly has taken over the United States’ position as the world’s largest producer of manufactured goods. Ross (2013) noted that, China’s industrial output had risen to 120% of the US level where in 2007, China’s total industrial production was only 62% of the US level. The huge manufacturing
Words: 652 - Pages: 3
The traditional approach to company gearing and the WACC The traditional theory of optimal capital structure assumes that there is an optimal debt-equity ratio (and thus an optimal capital structure) for every company. The optimal level of gearing describes a situation with minimal financial cost. Thereby specific behaviours of the investors are assumed. For a given total capital a company is able to minimize the average cost of capital by substituting more expensive equity through cheaper debt
Words: 757 - Pages: 4
Relative Valuations 19 Financial Forecast 21 Discounted Cash Flow Valuation 22 Conclusion and Recommendation 23 Table of Figures Figure 1) World-Wide Energy Consumption Growth since 1965. 7 Figure 2) Example Photograph and Diagram of "Jackup" Oil Rigs 9 Figure 3) Example Photograph and Diagram of "Semisubmersible" Oil Rigs 9 Figure 4) Comparison of the Average Size of 2009 Oil Field Discoveries: Offshore vs. Onshore 10 Figure 5) Historical WTI Oil Prices 11 Figure 6) Historical
Words: 8241 - Pages: 33
2 Graduate Thesis By Teia R. Merring Copenhagen Business School Strategic and financial analysis and valuation of B&O 0 1 Executive Summary................................................................................2 Introduction............................................................................................6 1.1Motivation.................................................................................................................. 6 1.2Problem Specification
Words: 60014 - Pages: 241
