Samsung has no debt in its capital structure. It is proposing a deal‚ which will allow it to borrow $5 million at 8% and buy back 500‚000 shares and cancel them. Required a. What will be the share price after the deal? b. What is the weighted average cost of capital before and after the deal? [15 marks] 3. Nokia is all equity financed (that is it has no debt). Its shares have a return of 10%. Du is the same as Etisalat. It is predicting cash flows
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for their children is allow them to be who they were born to be.” In both Amy Tan’s Two Kinds and W.H. Auden’s The Average‚ the protagonist’s parents work for their children to lead great lives‚ which the children in turn reject because they see themselves as average; however in Two Kinds the protagonist’s negative self-image comes from a desire to spite her mother‚ whereas in The Average it stems from the protagonist’s aspiration for an ordinary life. In both works the protagonist’s parents come from
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Home Depot Fiscal year end of Jan. 29‚ 2012 1. What is the name of the company? Home Depot. What is the industry sector? Home Improvement Retailer. 2. What are the operating risks of the company? * Uncertainty regarding current economic conditions. * Competition. * Timely identifying changes in demand. * Relationships with suppliers and disruptions in the supply chain. * Failure of key information technology or process; including customer facing and privacy disruptions
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growth rates. During the period‚ the net income of Walgreens grew at 14 percent per year‚ while Wrigley’s net income grew at 10 percent per year. Even though Walgreens was one of the fastest-growing companies in the United States during this time‚ its average annual shareholder returns were 16 percent‚ compared with 17 percent for the significantly slower-growing Wrigley. The reason Wrigley could create slightly more value than Walgreens despite 40 percent slower growth was that it earned a 28 percent
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Players (High) 6 Ratio Analysis 7 Profitability Ratios 7 Growth Ratios 7 Efficiency Ratios 7 Financial Strength Ratios 8 Dividend Ratios 8 Management Effectiveness Ratios 8 Discounted Cash Flow Valuation 9 Calculation of Weighted Average Cost of Capital 9 Cost of Equity Calculation 9 Pro Forma Financial Statements 10 Pro forma Profit and Loss Statement 10 Pro forma Balance Sheet 11 Proforma Cash Flow Statement 11 DCF using FCFF 11 Sensitivity Analysis
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evaluate this company based upon two methods: The Discounted Cash Flow Method and the Comparable Companies Method. Discounted Cash Flow Method takes the forecast free cash flows during forecasted horizon. Then we estimate the cost of capital (weighted average cost of capital) and estimate continuing value (value after forecast horizon). The future value is discounted to the present value. We than add back cash ($13 Million) and non-current assets and deduct total debt. With the information provided
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2 2‚040‚000 2‚040‚000 -192‚500 -192500 -10‚000 -10‚000 -1‚650‚000 -1‚683‚000 187‚500 -56‚250 131‚250 192‚500 -770‚000 -770‚000 -770‚000 323‚750 292‚325 300‚650 245‚117 154‚500 -46‚350 108‚150 192‚500 Payback Period Discounted Payback Period Average Return on Investment NPV PI IRR Equivalent Annuity 2.46 yrs 3.01 yrs 39% 165‚017 baht 1.21 21% 52‚906 baht Working Notes 1. Rental income = baht 170‚000*12 for the years 1 and 2 and increase by 5% in the years 3 and 4 2. Straight line depreciation
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her estimation was correct and suggest our own proposal of changes. CASE ANALYSIS What our group agrees on with Ms Cohen’s approach is the choice of WACC – Weighted Average Cost of Capital. WACC is one of the most widely used estimation of a firm’s cost of capital‚ with each and every source of capital proportionally weighted. A firm is generally financed by debt and equity‚ therefore‚ the equation to calculate WACC is as follows: Where: - book value of the firm’s debt - book value
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I. STATEMENT OF THE PROBLEM Star River Electronics is a CD-Rom manufacturing company based out of Singapore. Star River was founded as a joint venture between Starlight Electronics Ltd.‚ and an Asian venture-capital firm called New Era Partners. Star River became favorably recognized as a supplier of high-quality CD-ROMs as the industry grew quickly during the mid to late 1990s. New Chief Executive Officer Adeline Koh is tasked with navigating the CD-ROM manufacturing company through tough times
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SCHOOL OF BUSINESS‚ ECONOMICS AND MANAGEMENT HRM310: FINANCIAL MANAGEMENT ASSIGNMENT DUE DATE: MARCH 15‚ 2013 \ Instructions to Candidates: 1. Ensure that you have the correct assignment paper with you. 2. All questions in this paper should be answered 3. One mark will be allocated for neatness and clarity of presentation 4. Plagiarism is not permissible. QUESTION ONE i. Discuss the role that Capital markets play in the economic development of a country like
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