Business Finance Summary Business Finance, Investors, Firms and Markets • Investments in assets are important because assets generate the cash flows that are needed to meet operating expenses and provide a return to owners of the business. • Financing decisions involved generating funds internally or form external sources to the business. Such as by issuing debt or equity securities. • Financing charges amount to non-operating cash flows • The required rate of return caters for the costs
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Mergers, Acquisitions and Corporate Restructuring II MERGERS, ACQUISITIONS AND CORPORATE RESTRUCTURING Mergers, Acquisitions and Corporate Restructuring Edited by Chandrashekar Krishnamurti Vishwanath S.R. Copyright © Chandrashekar Krishnamurti and Vishwanath S.R., 2008 All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage or retrieval
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Case 70 Computer Concepts/CompuTech Merger Analysis QUESTIONS Question 1 Several factors have been proposed as providing a rationale for mergers. Among the more prominent ones are (1) tax considerations, (2) diversification, (3) control, (4) purchase of assets below replacement cost, and (5) synergy. From the standpoint of society, which of these reasons are justifiable? Which are not? Why is such a question relevant to a company like CompuTech, which is considering a specific acquisition
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corporate income taxes due to the fact that interest is treated as an expense that reduces taxable income. To the extent that the government collects less tax, there is a bigger pie of after-tax income available to the debt and equity holders. Example: Assume operating income is $100,000, the interest rate on debt is 10%, and the tax rate is 35%. Compare income for an unlevered firm versus a firm that borrows $400,000: | |Zero-debt firm |$400
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SEATTLE PACIFIC UNIVERSITY School of Business and Economics BUS 6220 CRN 43797 Office: McKenna Hall 205 Financial Analysis Phone: 281-3523 Dr. Herbert Kierulff Hours: Th. 1-6 and by appt. hkierulf@spu.edu Classroom: McKenna 111 "…value reflects only our opinions
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Urban Water Partners Urban Water Partners Presentation to investors by the executive team Emily Chai Brook Aspden Tiffany Kok Chloe Muggeridge What will you gain by investing in Urban Water Partners? Financial Introduction Analysis Strategy Non-financial Financials Implementation Conclusion Urban Water Partners will generate a 7.5 times return on investment $1.7m 1600000 1400000 1200000 1000000 800000 600000 400000 $0.2m 200000 0 Invested
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P2-3. LG 1: Income statement preparation a. |Cathy Chen, CPA | |Income Statement | |for the Year Ended December 31, 2009 | |Sales revenue | |$360,000 | |Less: Operating
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Harvard Business School The Emergence of a Global PC Giant: Lenovo’s Acquisition of IBM’s PC Division A Final Paper Submitted to Professor Mihir Desai By John Ackerly Måns Larsson Cambridge, MA December 2005 The Emergence of a Chinese Global PC Giant: Lenovo’s Acquisition of IBM’s PC Division By John Ackerly & Måns Larsson 1/28 Introduction On May 1, 2005, the Lenovo Group acquired IBM’s personal computing division (IBM PC) for $1.25 billion, achieving the goal of its ambitious founder, Liu
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Question a. Why is corporate finance important to all managers? Corporate Finance is important to all managers because it gives them the skills necessary to identify and select the corporate strategies that could add value to the company. Question b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. |Organizational Form |Advantages
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variance, probability and other statistical tools. ------------------------------------------------- What is beta? ------------------------------------------------- What is cost of equity? ------------------------------------------------- What is WACC? ------------------------------------------------- ------------------------------------------------- "Stock A generates a return of 20% while stock B generates a return of 25%. The risk free-rate is 5%. Stock A has a standard deviation (risk)
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