initial market value of the unlevered equity? c. a. Suppose the initial $100‚000 is instead raised by borrowing at the risk-free interest rate. What are the cash flows of the levered equity‚ and what is its initial value according to MM? E ⎡C (1)⎤ = ⎣ ⎦ 1 (130‚ 000 + 180‚ 000) = 155‚ 000‚ 2 155‚ 000 NPV = − 100‚ 000 = 129‚167 − 100‚ 000 = $29‚167 1.20 155‚ 000 = 129‚167 1.20 b. c. Equity value = PV ( C (1)) = Debt payments = 100‚ 000‚ equity receives 20‚000 or 70‚000. Initial value‚ by MM‚ is
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Module Name: Managing Finance & Information Assignment 1 Table of Contents No. Title Page No. A What is Dunelm Mill? 5 B What is Table? 5 C What is Data? 5 D What are Rows & Columns? 5 1 Task 1: Relational database 6-13 2 Task 2: Information System 14 What is SAP Software? 14 2.1 Benefits of implementing SAP Business Objects Portfolio at Dunelm Mill 14‚15 2.2 Vendor evaluation used by Dunelm
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Jean Piaget and Jerome Bruner are two theorists who have both had an effect on education over the past century. The process of teaching and learning used by mathematics teachers has been greatly contributed to by Piaget and Bruner. Constructivism is based on the ideas formed by Piaget and Bruner‚ “a theory that views the child as creating knowledge by acting on experience gained from the world and then finding meaning in it.” (Sperry-Smith‚ Van De Walle‚ Karp and Bay-Williams‚ 2012‚ p.10). Jean
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financial managers should primarily focus on increasing which one of the following? A. size of the firm B. growth rate of the firm C. gross profit per unit produced D. market value per share of outstanding stock E. total sales 3. Which one of the following is the financial statement that shows the accounting value of a firm’s equity as of a particular date? A. income statement B. creditor’s statement C. balance sheet D. statement of cash flows E. dividend statement 4. Which one of the
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FORMULAS TIME VALUE OF MONEY PV (simple without compounding) = FV/1+r FV (simple without compounding) = PV (1+r) PV (compounding) = FV / (1+r)n FV (compounding) = PV (1+r)n PV (for monthly‚ daily or bi-annually basis) = FV / (1+r/m)n*m FV (for monthly‚ daily or bi-annually basis) = PV(1+r/m)n*m To find interest rate: FV = PV (1+r(?))n (FV and PV are given) APR (Annual Present Rate) = r * Total days in a year/given days In Excel: =RATE(n‚pmt‚PV) EAR (Effective Annual Rate)
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motherboard design was completed for an after-tax payment of $30 million. QUESTIONS 1. Tom believes the company should use the extra cash to pay a special one-time dividend. How will this proposal affect the stock price? How will it affect the value of the company? 2. Jessica believes
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Company has a separate legal entity from its members‚ can sue or be sued on its own behalf. As illustrated in Foss v Harbottle (1843)‚ the proper plaintiff is the company itself. In other words‚ directors have the power to decide whether or not to sue in protection of the company. However‚ very often‚ the persons who commit misconduct are the major controller of the company and improbable to permit the company to sue. A common law right is therefore reserved for shareholders to sue the wrongdoers
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the determinants of corporate investment‚ financing‚ hedging‚ payout‚ and executive compensation policies. The course will provide an analysis of the determinants of each policy as well as the implications for shareholder value. While the basic economic insights will be presented through simple examples‚ the course is quantitative in nature. Course material The reference textbook is Corporate Finance by Jonathan Berk and Peter DeMarzo‚ Pearson International Edition‚ 2nd Edition‚ (BDM hereafter).
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Solutions to Chapter 10 Introduction to Risk‚ Return‚ and the Opportunity Cost of Capital capital gain + dividend ($44 − $40) + $2 = = 0.15 = 15.0% initial share price $40 1. Rate of return = Dividend yield = dividend/initial share price = $2/$40 = 0.05 = 5% Capital gains yield = capital gain/initial share price = $4/$40 = 0.10 = 10% 2. Dividend yield = $2/$40 = 0.05 = 5% The dividend yield is unaffected; it is based on the initial price‚ not the final price. Capital gain = $36 – $40
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Introduction To Corporate Finance: A division or department that oversees the financial activities of a company. Corporate finance is primarily concerned with maximizing shareholder value through long-term and short-term financial planning and the implementation of various strategies. Everything from capital investment decisions to investment banking falls under the domain of corporate finance. Corporate finance is the funding provided to support the operations of the venture itself‚ as distinct
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