Finance management cengage 2013 chapter 05

... Compound Each Cash Flow 5% 100 100 100 110.25 121.55 331.80 FV3 = $100(1 .05) 4 + $100(1 .05) 2 + $100 FV3 = $331.80 5-35 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, ... PV +  M   M×N 2×3  0.10  FV3S = $100 +    FV3S = $100(1 .05) 6 = $134.01 FV3Q = $100(1.025)12 = $134.49 5-32 © 2013 Cengage Learning All Rights Reserved May not be...

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... Finance Within the Organization 1-2 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, ... ever-improving information technology have had a profound effect on all aspects of business finance 1-9 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or posted ... Difficult to raise capital – Unlimited liability –...

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... online sources (Yahoo !Finance, CNNMoney, or MSN MoneyCentral) Stock Quote for GlaxoSmithKline, July 11, 2011 Source: GlaxoSmithKline (GSK), finance. yahoo.com 2-13 © 2013 Cengage Learning All Rights ... institutions who need to raise funds to finance their investment opportunities These groups are willing to pay a rate of return on the capital they borrow 2-2 © 2013 Cengage Learni...

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... 32,592 492,592 2,866,592 2011 145,600 200,000 136,000 481,600 323,432 460,000 203, 768 663,768 1,468,800 3-5 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, ... Stockholders’ Shares Amount Earnings Equity 100,000 $460,000 $ 203, 768 $663,768 (160,176) (11,000) 100,000 $460,000 $ 32,592 (171,176) $492,592 3-8 © 2013 Cengage Learning All Rights Res...

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... FA Total Assets 2013E 85,632 878,000 1,716,480 2,680,112 1,197,160 380,120 817 ,040 3,497,152 2012 7,282 632,160 1,287,360 1,926,802 1,202,950 263,160 939,790 2,866,592 4-2 © 2013 Cengage Learning ... Total L & E 2013E 436,800 300,000 408,000 1,144,800 400,000 1,721,176 231,176 1,952,352 3,497,152 2012 524,160 636,808 489,600 1,650,568 723,432 460,000 32,592 492,592 2,866,592 4-3 © 2013...

Ngày tải lên: 14/11/2016, 14:49

... 6.5% (1 .065 )5 = (1 .062 )2 (1 + X)3 1.37009/1.12784 = (1 + X)3 6.7005% = X • The pure expectations theory says that three-year securities will yield 6.7005%, two years from now 6-20 © 2013 Cengage ... © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part One-Year Forward Rate 6.0% x% 6....

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... instances where the business is worth more “alive than dead.” – Chapter 11, Reorganization – Chapter 7, Liquidation 7-41 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, ... problems 7-40 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part Bankruptcy • Two mai...

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... © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part Partial Correlation, ρ = +0.35 8-27 © 2013 ... be shown graphically Firm X Firm Y -70 15 100 Rate of Return (%) Expected Rate of Return 8-3 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or pos...

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... Ownership implies control Stockholders elect directors Directors elect management Management’s goal: Maximize the stock price 9-2 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, ... Their PVs D0 = $2 and g is a constant 6% g = 6% 1.8761 1.7599 2.12 2.247 2.382 rs = 13% 1.6 509 9-11 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or du...

Ngày tải lên: 14/11/2016, 14:50

... © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part Divisional Cost of Capital 9-30 © 2013 Cengage ... refer to the firm’s capital structure weights •The r’s refer to the cost of each component 10-3 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicate...

Ngày tải lên: 14/11/2016, 14:50

... (1 + MIRRL)3 MIRRL = 16.5% TV inflows Excel: =MIRR(CF0:CFn ,Finance_ rate,Reinvest_rate) We assume that both rates = WACC 11-22 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, ... the appropriate cost of capital Find NPV and/or IRR Accept if NPV > and/or IRR > WACC 11-3 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or po...

Ngày tải lên: 14/11/2016, 14:50

... on operations – New sales: 100,000 units/year @ $2/unit – Variable cost: 60% of sales 12-2 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or posted to ... life: years – Depreciable life: MACRS 3-year class – Salvage value: $25,000 WACC: 10% 12-3 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or posted to ....

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... from managers’ responses to changing circumstances that can influence a project’s outcome 13-2 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplicated, or posted to ... Growth/expansion options Abandonment/shutdown options Investment timing options Flexibility options 13-3 © 2013 Cengage Learning All Rights Reserved May not be scanned, copied, or duplic...

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... debt-financed assets, so leverage will depress income • As debt increases, TIE decreases because EBIT is unaffected by debt, but interest expense increases (Int Exp = rdD) 14-15 © 2013 Cengage ... personal tax rate? Increase in bankruptcy costs? Management spending lots of money on lavish perks? Financial flexibility? Firm’s growth rate? 14-38 © 2013 Cengage Learning All Rights Rese...

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... generally occur when management is confident, so are interpreted as positive signals • On average, stocks tend to outperform the market in the year following a split 15-21 © 2013 Cengage Learning ... Stockholders may take as a positive signal; management thinks stock is undervalued Helps avoid setting a high dividend that cannot be maintained 15-23 © 2013 Cengage Learning All Righ...

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