intelligent investing. When an investor attempts to determine the worth of her shares based on the fundamentals‚ it helps her make informed decisions about what stocks to buy or sell. Without fundamental value‚ one is set adrift in a sea of random short-term price movements and gut feelings. Before we can value a share of stock‚ we have to have some notion of what a share of stock is. A share of stock is not some magical creation that ebbs and flows like the tide; rather‚ it is the concrete representation
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calculator‚ Let‚ PV = $ .86‚ FV = $2.00‚ n = 8. Solve for i. i = the average growth rate. In this case i = g = 11.13%. Plugging this growth rate into the Gordon Growth Model‚ P0 = $2.00(1 + .1113) = $118.86 .13 - .1113 3. This time‚ Let‚ PV = $1.42‚ FV = $2.00‚ n = 5. Solve for i. i = g = 7.09%. Plugging this growth rate into the Gordon Growth Model‚ P0 = $2.00(1 + .0709) = $36.24 .13 - .0709 4. The Gordon Growth Model‚ or any other dividend based pricing
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Project appraisal- A methodology Appraisal involves a careful checking of the basic data‚ assumptions and methodology used in project preparation‚ an in-depth review of the work plan‚ cost estimates and proposed financing‚ an assessment of the project’s organizational and management aspects‚ and finally the viability of project. It is mandatory for the Project Authorities to undertake project appraisal or atleast give details of financial‚ economic and social benefits and suitably incorporate
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accommodate. It is a productive capability or a facility. Capacity is a critical consideration for long term strategy. It is generally measured in volume of output per unit of time. Capacity is the limiting capability of a productive unit to produce within a stated time period‚ normally expressed in terms of output per unit of time. So‚ capacity is the maximum productive capability. Capacity can be measured in different ways. Capacity has different meaning to different people at different level
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Exercise 1. (Future value) You invest a single amount of $12‚000 for 5 years at 10 percent. At the end of 5 years you take the proceeds and invest them for 12 years at 15 percent. How much will you have after 17 years? Answer: FV(5) = 12000*(1.1^5)=19326.12 FV(12) = 19326.12*(1.15^12)=103399.60 Exercise 2. (Present value) The Western Sweepstakes has just informed you that you have won $1 million. The amount is to be paid out at the rate of $50‚000 a year for the next 20 years. With a discount
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Some scholars in Islamic economics argued that the concept of time value of money is a key to the door or riba which is prohibited in Islam. However‚ some scholars are of the opinion that time value of money is a concept valid in Islamic economics. What are your opinions on this issue? DISCUSSION: Islam prohibits riba because riba deprives justice and discourage people from undertaking real economic activities. Profit earned from money that is loaned to debtor is considered as interest or usury
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13. Relative Valuation - Using Market Comparables Zenu Sharma zenu.sharma@edhec.edu Course Road Map 1. Financial Markets and Management 2. Present Value 3. Introduction to Risk and Return 4. Portfolio Selection 5. The Capital Asset Pricing Model 6. Financing and Capital Structure 7. Interest Rates and the Valuation of Bonds 8. Project Appraisal 9. Capital Budgeting 10. Capital Budgeting with Financial Leverage 11. The Valuation of Companies and Stocks 12. Relative Valuation 13. Options and
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(5%) * Know goal of the financial manager * Define agency problem * Describe the four areas of Ratio Analysis (liquidity‚ activity‚ solvency‚ and profitability) and their purpose‚ know information that gives ratios value and meaning. Chapter 5 (15%) * Time Value of Money: PV‚ PMT of loan‚ FV of annuity‚ growth rate and mixed stream of cash flows Chapter 6-8 (46%) * Expected return‚ Standard deviation and Coefficient of variation of a single asset (Prob 8-5 but also find Standard
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details of financial analysis to get well grounded proposals. In conclusion‚ some key points‚ which can be generally applied to all DCF analysis‚ are extracted and pointed out by answering the given nine questions.  Retirement Planning (Value added materials) In addition to the case study‚ the second part of this project discusses about retirement planning‚ taking the findings of the case study into consideration. The discussion includes the importance of planning after retirement at early
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flow use stable yield stocks.It is marginally increased so good for such investors. * Market value to book value ratio : DESCRIPTION | Mar-12 | Mar-11 | Mar-10 | Mar-09 | Mar-08 | P/B ratio | 4.45 | 5.51 | 5.92 | 2.93 | 5.47 | It shows the contribution of a firm to the wealth of the society.Lower ratio is bad indicator.Here ratio is 4.45 in this year.It shows valuation of stock.Lower value of P/B ratio could mean that it is undervalued.Since 2010 ‚It is improving.So it is good sign for
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