growth model‚ we can calculate that Company XYZ’s cost of capital is ($1 / $10 ) + 3% = 13% Using CAPM‚ we can calculate that Company XYZ’s cost of capital is 3% + 1.0*(12% - 3%) = 12% Why It Matters: Cost of equity is a key component of stock valuation. Because an investor expects his or her equity investment to grow by at least the cost of equity‚ cost of equity can be used as the discount rate used to calculate an equity investment’s fair value. Both cost of equity calculation methods have
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Australian School of Business School of Accounting ACCT5910 BUSINESS ANALYSIS AND VALUATION Course Outline Semester 2‚ 2013 Table of Contents PART A: COURSE-SPECIFIC INFORMATION 1 2 STAFF CONTACT DETAILS COURSE DETAILS 2 2 2 2 2 2 3 3 4 4 4 5 5 5 7 7 8 9 9 9 9 9 9 1 1 1 1 2 2 2 2 2 3 2.1 Teaching Times and Locations 2.2 Units of Credit 2.3 Summary of Course 2.4 Course Aims and Relationship to Other Courses 2.5
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financial courses that I am looking for. For instance‚ the corporate finance courses and the equity valuation and derivatives courses that will broaden my knowledge in different ways. The corporate finance courses will provide me with a comprehensive understanding of financial concepts and tools and will prepare me to analyze and evaluate corporate financial planning and decisions. The equity valuation and derivatives will deeply enhance my (existing) knowledge on what I already know about the equity
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Comparable companies analysis – Done to determine appropriate valuation multiple for Crocs‚ Inc. • • Selected peer group based on industry‚ business and financial characteristics Included explosive growth stocks such as Lulelemon & Under Armour having similar prospects for growth and ROIC as Crocs‚ Inc. and some mature‚ stabilized businesses with stable industry growth rates – Nike‚ Deckers & Timberland. This mix will help us provide valuation from an aggressive sales growth and maturing sales context
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are the tradeoffs in using multiples versus the DCF analysis? Answer: DCF Valuation ; Martin forecast revenue for each year for from the firm’s financial data‚select appropriate discount rate based on WACC‚ discount each cashflow back to it present value‚ obtain the terminal value through an application of terminal value multiple‚ using DCF method‚ Martin calculates the price of Cox’s share to be $54.29. Multiple Valuation; Identify comparable firms that have growth‚ cashflow and risks similar to
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Biography of Allan Pinkerton CJS/250 November 30‚ 2011 Sean Wilson Biography of Allan Pinkerton Introduction Allan Pinkerton was very influential regarding private security. Pinkerton presented ideas as well as actually demonstrated the benefits for private security in comparison to public policing. This paper will not only introduce Allan Pinkerton but will also briefly describe the impact of his ideas on private security. The Beginning Allan Pinkerton was born August 25‚ 1819‚ in Glasgow
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the case didn’t provide us with the financial statements for Monmouth‚ we can assume that in order to complete the acquisition they have to issue stocks as they exhausted (or will pretty soon exhaust) their debt capacity. 2. Based on the DCF valuation and using a WACC of 8.25% (the beta assumed to be 1‚ the average beta of comparable firms and the coupon rate to be 7.96%‚ the rate for BB rated companies) and a growth rate of 5.5%. The fair price is $40.4 per share for Robertson‚ lower than the
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Optimal Risky Portfolios 23 Chapter 9 The capital asset pricing Model 24 Chapter 11 The Efficient Market Hypothesis 25 Chapter 12 Behavioural Finance and Technical Analysis 26 Chapter 17 Macroeconomic and Industry Analysis 27 Chapter 18 Equity Valuation Models 28 Chapter 19 Financial Statement Analysis 29 Chapter 24 Portfolio Performance evaluation 30 Chapter 27 The Theory of Active Portfolio Management 31 Information about the unit Welcome to: BUS311 Investment Analysis
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Pinkerton (A) Assignment The assignment is twofold. First‚ to advise Tom Wathen as to whether he should buy Pinkerton for the asking price of $100 million. Second‚ regardless of your answer to #1‚ assuming that Wathen does buy Pinkerton‚ should he finance the purchase with Financing Alternative #1 (debt and equity financing from an investment firm) or Alternative #2 (all debt financing from a bank). The financing alternatives are discussed on page 4 of the case. You should do the discounted
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Guide for assignment Executive Summary - Summarize the content of the whole report. Highlight anything that you feel is very important. About half to one page long Do not share with other content Opinion of value Mention your proposed selling price. Suggest whether your boss should buy the business or not. Support your claim. Should mention that opinion has been made under the assumptions and limiting conditions. About one page Do not share with other content Assumptions and Limiting
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