FM11 Ch 29 Pension Plan Management

... 29 - How important are pension funds?  They constitute the largest class of investors  They hold about 33% of all U S stocks 29 - Pension Plan Terminology  Defined benefit plan: Employer ... aggregate actuarial uncertainty 29 - 17 What risks are borne by the plan sponsor and plan beneficiaries under the four types of pension plans?  Defined benefit plan: Most risk fall...

Ngày tải lên: 06/04/2015, 19:41

... $0.40 26 - 13 What is exchange rate risk? Exchange rate risk is the risk that the value of a cash flow in one currency translated from another currency will decline due to a change in exchange ... regulatory obstacles  To reduce risk by diversification 26 - What are the major factors that distinguish multinational from domestic financial management?  Currency differences  Economic...

Ngày tải lên: 06/04/2015, 19:41

... 22 - Basic Definitions  Gross working capital: Total current assets  Net working capital: Current assets - Current liabilities  Net operating working capital (NOWC): Operating ... (More…) 22 -  Working capital management: Includes both establishing working capital policy and then the day-to-day control of cash, inventories, receivables, accruals, and accounts payabl...

Ngày tải lên: 06/04/2015, 19:41

... optimal amount of debt capital 30 - 28 What unique problems not-forprofit businesses encounter in financial analysis and planning and short-term financial management?  In general these tasks are ... of insufficient funding, or to use more than the theoretically optimal amount of debt 30 - 14 Why is capital budgeting important to not-for-profit businesses?  The financial...

Ngày tải lên: 06/04/2015, 19:41

... ordering costs increase  If Q > EOQ, total carrying costs increase, but ordering costs decrease 28 - 15 Suppose delivery takes weeks Assuming certainty in delivery and usage, at what inventory ... if you view cash as an operating assets, just like inventory  In this view, cash has a carrying cost, which is the opportunity cost for investing the funds, and an order cost, wh...

Ngày tải lên: 06/04/2015, 19:41

... portfolio risk management 23 - 20 How are risk exposures identified and measured?  Large corporations have risk management personnel which have the responsibility to identify and measure risks facing ... substantially in the interim 23 - 19 Chapter 23 Extension: Insurance and Bond Portfolio Risk Management  Risk identification and measurement  Property loss, l...

Ngày tải lên: 06/04/2015, 19:41

... is reported on balance sheets 15 - Total Corporate Value  Total corporate value is sum of: Value of operations Value of nonoperating assets 15 - Claims on Corporate Value  Debtholders have ... share = $376.94 /10 = $37.69 15 - 25 Value-Based Management (VBM)  VBM is the systematic application of the corporate valuation model to all corporate decisions and strategic in...

Ngày tải lên: 06/04/2015, 19:41

... and Local Government Employee Retirement Systems Fiscal Year 2005  Ibid AU0548.indb 7/21/08 10:00:33 AM   n  State and Local Pension Fund Management Reason No 4: While state and local pension ... 1.5  State and Local Pension Systems In this section, we take a closer look at some other important characteristics of state and local pension plans 1.5.1  P...

Ngày tải lên: 29/03/2014, 05:20

... balances schedule is the receivables -to-sales ratio  There is no difference in this ratio between March and June, which tells us that there has been no change in payment pattern (More ) 27 - 20 ... Underlying cause is seasonal variation 27 - 16 Construct an aging schedule for the end of March and the end of June Age of Account (Days) - 30 31-60 61-90 March A/R % $210 84% 40 16 0 $250 10...

Ngày tải lên: 06/04/2015, 19:41

... losses)(More ) 25 -  Break-up value: Assets would be more valuable if broken up and sold to other companies 25 - What are some questionable reasons for mergers?  Diversification  Purchase of assets ... rate would change the discount rate 25 - 26 Assume the target company has 20 million shares outstanding The stock last traded at $11 per share, which reflects the target’s value on...

Ngày tải lên: 06/04/2015, 19:41

... creditors when liquidation does occur  Companies in bankruptcy can hurt other companies in industry 24 - 24 Chapter 24 Extension  MDA to predict bankruptcy  Recent business failures 24 - 25 What ... or assignee, and then the assets are sold off 24 - 10 Describe the following terms related to U.S bankruptcy law:  Chapter 11: Business reorganization guidelines  Chapter 7: Li...

Ngày tải lên: 06/04/2015, 19:41

... convertibles would be exercised Debt would remain outstanding 21 - 43 Recap the differences between warrants and convertibles  Warrants bring in new capital, while convertibles not  Most convertibles ... equity and 20% convertibles or bonds with warrants What effect will the two financing alternatives have on the firm’s WACC? 21 - 35 Convertibles Step 1: Find the after-t...

Ngày tải lên: 06/04/2015, 19:41

... Financial lease  Long-term and normally noncancelable  Maintenance usually not included  Sale and leaseback  Combination lease  "Synthetic" lease 20 - How are leases treated for tax purposes?  Leases ... is leased: Firm could obtain a 4-year lease which includes maintenance Lease meets IRS guidelines to expense lease payments Rental payment would be $260,000 at the beginn...

Ngày tải lên: 06/04/2015, 19:41

... 19 - What agencies regulate securities markets?  The Securities and Exchange Commission (SEC) regulates:  Interstate public offerings  National stock exchanges  Trading ... fund 19 - Differentiate between a private placement and a public offering  In a private placement, such as to angels or VCs, securities are sold to a few investors rather than to the public ... in final...

Ngày tải lên: 06/04/2015, 19:41

... investors 18 - 28 New Stock Plan  Firm issues new stock to DRIP enrollees, keeps money and uses it to buy assets  No fees are charged, plus sells stock at discount of 5% from market price, which is ... increases risk, and doesn’t appeal to any specific clientele  Conclusion: Consider residual policy when setting target payout, but don’t follow it rigidly 18 - 19 Stock Repurc...

Ngày tải lên: 06/04/2015, 19:41