Market val ue of equity rdebt YTM on bonds requity rf β( rm rf ) 9-4 2 25/03/2014 9-1 COMPANY AND PROJECT COSTS OF CAPITAL • Weighted Average Cost of Capital • Traditional measure of capital structure, risk and return D E WACC (1 Tc ) rD V rE V 9-5 9-2 MEASURING THE COST OF EQUITY • Capital Structure (CS) • Mix of debt and equity within a company • Expand CAPM to include CS • r = rf + β(rm − rf) • requity = rf + β(rm − rf) 9-6 3 25/03/2014
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Why is corporate finance important to all manager? Corporate finance is important to all managers due to the priority capital has in a company. That is, without effective financial management, a company will be unable to develop products, get them to market and grow the business. Organizational forms a company may have as it evolves from start up to major corporation are: Sole Propietorship. Effectively a person “hangs a shingle” and becomes a business. It is subject to few government
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Financial Statements Analysis Dr. Rimona Palas Caroline LAYANI Id: 94746 Michael WEIMBERG Id: 94852 Nathan BENAMOU Id: 94531 Sebastian KANOVICH Id:799048 I. Executive summary After analyzing the income statement, ratios and strategies of the Coca-Cola Company, we can conclude that Coca-Cola had a continuous revenue growth between the years 2009 and 2011. It is the largest soft drink industry company in the world and therefore stands in a privileged position to face potential
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Transaction, Operating, & Accounting (Translation) Exposures Foreign Exchange Exposure – measures the potential for a firm’s profitability, net cash flow, and market value to alter because of a change in exchange rates. Q: What are the three main foreign exchange exposures? A: 1) Transaction Exposure 2) Operating Exposure 3) Accounting Exposure Transaction Exposure – measures changes in the value of outstanding financial obligations incurred prior to a change in exchange rates.
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IFAC Board Exposure Draft November 2012 Comments due: February 28, 2013 Professional Accountants in Business International Good Practice Guidance Project and Investment Appraisal for Sustainable Value Creation IFAC’s mission is to serve the public interest by: contributing to the development of high-quality standards and guidance; facilitating the adoption and implementation of high-quality standards and guidance; contributing to the development of strong professional accountancy organizations
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can boost profits over the short term by using less costly materials even if this reduces the quality of the product. Once customers catch on, sales will decrease and profits will fall in the future. The stock price will fall. The moral of these examples is that, because stock prices reflect present and future profitability, the firm should not necessarily sacrifice future prospects for short-term gains. 3. The key advantage of separating ownership and management in a large corporation is
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1. During the project initiation, a project charter is created. The project charter should include which of the following? • Project managers expenses • Analysis of budget • Selection of the senior project manager • Projects high-level deliverables 2. A project's budget should be based on a company’s • strategy and financial goals • profitability • financial goals and equity • debt load and equity 3. Earned value management is a technique used to integrate projects • resources • scope
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Saint Petersburg State University Graduate School of Management Group project for the Corporate Finance course (Part II) Financial Statements Analysis, Free Cash Flow Estimation, Company Valuation, Description of Dividend Policy and Recently Taken Projects For PAO Gazprom Performed by group №___ MiM, cohort II Group members: Supervisor: assoc. prof. Yulia B. Ilina Financial statements analysis This part of analysis will be conducted using financial ratios, percentage change in
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LER 568: FIRM PERFORMANCE & HRM School of Labor and Employment Relations Office hours: By appointment, LER 211 Andrew Weaver, PhD Email: aweaver5@illinois.edu Phone: (217) 265-5087 REQUIRED TEXTS (purchase prior to class) Brealey, Myers, & Marcus. Fundamentals of Corporate Finance (8th Edition) Note: please buy a version that comes with the online “Connect” access. We will use Connect for problem sets. HBS Press & SHRM. The Essentials of Finance and Budgeting (Business Literacy for
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are stated. | Question 5.5. (TCO G) If you were a manager of a company, which of the three right side components of the DuPont Identity would you want to increase and which would you want to decrease, other things being equal? Give a specific example for how to do that for each of the three. (Points : 20) I would like to increase asset turn over so that the ROE will be increase. Then I would like to decrease equity multiplier. For exampleWall-Mart ROE = 15.7/71.3 = 22% = 3.51% x 2.31 x 2
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