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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Corporate Business Finance Seminar 5 Project Finance Lauren Leigh Essaram 207507339 Ruvimbo Mukorera 206525531 27 September 2010 Submitted in partial fulfilment of the duly performed requirement of International Business Finance‚ School of Economics and Finance‚ University of KwaZulu-Natal Abstract Non-recourse financing has grown in popularity‚ especially in developing countries. It has done so more specifically in the basic infrastructure‚ natural resources and also in the energy
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Corporate Finance Syllabus Spring 2009 Prof. Anna Scherbina UC Davis Graduate School of Management Office: 126 AOB IV Tel: 530.754.8076 e-mail: ascherbina@ucdavis.edu Course Focus We will explore how corporations make financial decisions through the analysis of Harvard Business School cases. Should a firm undertake a new investment opportunity‚ raise equity‚ acquire another firm‚ or conduct an IPO? How should small firms manage their working capital? How fast should a firm grow
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Chapter 14 Capital Structure in a Perfect Market 14-1. Consider a project with free cash flows in one year of $130‚000 or $180‚000‚ with each outcome being equally likely. The initial investment required for the project is $100‚000‚ and the project’s cost of capital is 20%. The risk-free interest rate is 10%. a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment‚ the project is sold to investors as an all-equity firm. The equity holders will receive
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Reaction Mechanisms The mechanism of a chemical reaction is the sequence of events that take place as reactant molecules are converted into products. Introduction The study of kinetics includes very complex and sophisticated reactions that cannot be analyzed without a proposed mechanism‚ a series of steps that a reaction takes before reaching the final products. Reaction mechanisms are step-by-step descriptions of what occurs on a molecular level in chemical reactions. Each step of the reaction
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Question 1 (5 points) In a world with no frictions (i.e.‚ taxes‚ etc.)‚ having debt is always better because it increases the value of the firm/projet. Your Answer | Score | Explanation | False | 5.00 | Correct. You understand the irrelevance of financing. | Total | 5.00/5.00 | | Question Explanation | | | Fundamental question about value creation. | Question 2 (5) the return of equity is equal to the return on debt of a project/firm Your Answer | Score | Explanation | Never true
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Question 1 (5 points) By simply increasing the number of assets (e.g.‚ assets > 30) in any portfolio‚ you can diversify your exposure to specific/idiosyncratic risk. False. True. Question 2 (10) You have an equally weighted portfolio that consists of equity ownership in three firms. Firm A is trading at $23 per share and has a beta of 1.15; Firm B is trading at $16 per share with a beta of 1.60; Firm C is trading at $76 per share with a beta of 0.85. Assume a risk free rate of 2% and market
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U NIVERSITY OF L UXEMBOURG ‚ L UXEMBOURG S CHOOL OF F INANCE Corporate Finance Master in Economics and Finance 2nd Assignment - Stock valuation + Cost of capital Due on 10/3/2014 E XERCISE 1 Starr Co. just paid a dividend of $2.15 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year‚ indefinitely. If investors require a 12 percent return on the stock‚ what is the current price? What will the price be in three years? In 15 years? E XERCISE
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Problem set 2 16-1. Gladstone Corporation is about to launch a new product. Depending on the success of the new product‚ Gladstone may have one of four values next year: $150 million‚ $135 million‚ $95 million‚ and $80 million. These outcomes are all equally likely‚ and this risk is diversifiable. Gladstone will not make any payouts to investors during the year. Suppose the risk-free interest rate is 5% and assume perfect capital markets. a. What is the initial value of Gladstone’s equity
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Top of Form Please read all questions and instructions carefully. Note that you only need to enter answers in terms of numbers and without any symbols (including $‚ %‚ commas‚ etc.). Enter all monetary answers to the nearest dollar (no decimal/cents) and all interest rates to the nearest on hundredth of a percent (two decimal places). Read the syllabus for examples. The points for each question are listed in parentheses at the start of the question‚ and the total points for the entire assignment
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