Finance 725 Spring 2006 J. E. Hodder Corporation Finance Course Schedule Tuesday‚ January 17: Introduction Thursday‚ January 19: Clarkson Lumber Company Reading: Note on Financial Analysis a. How is the company ’s financial performance? (Examine appropriate financial ratios.) b. Why has Clarkson Lumber borrowed increasing amounts despite its consistent profitability? c. How has Mr. Clarkson met the financing
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Billabong Dividend Policy to similar firms 14 4.4 Relationship Between the Company’s Characteristics and Dividend Policy 15 4.5 Alternatives to Dividend Payments 16 4.6 Optimal Dividend Policy 16 5.0 Valuation 18 5.1 Weighted Average Cost of Capital (WACC) 20 5.2 Estimation of Share Price 23 5.3 Sensitivity Analysis 25 5.4 Comparison between the calculated and actual share price 28 5.5 Investment Decision 28 6.0 References 29 7.0 Appendix 30 1.0 Introduction Company Overview Billabong was
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Connections: Calculate the present value of free cash flows with synergies Incorporate data from Steps 2 – 5 as seen above Proceed with final valuation and terminal value calculation ACC Adjusted Present Value • Used Adjusted Present Value (APV) valuation method • Value AirThread assuming 100% equity financing • Avoids calculating debt-to-equity ratio for consecutive years • Use “Return on Assets” to discount 2008 – 2012 cash flows • Return on Assets = 7.82% ACC Base-Case Operating
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FIN 819: Financial Management Administrative Issues Course Overview FIN 819: Lecture 1 Today’s plan l Administrative issues l Course overview l Team formation • prerequisite • add‚ drop and withdraw • projects • case writing and discussion • final exam • final grade FIN 819: Lecture 1 The instructor l l l l l My name is George Li Office: DTC 582 and BUS 315 Email: li123456@sfsu.edu Office hours: Monday: 1:30 p.m. to 3:30
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valuation method that better matches its insights into specific drivers creating value in the industry (Lie and Lie‚ 2002). Jointly‚ Young‚ M 1996). According to Oded‚ J. (2007)‚ there are four cash-flow methods to value a company: Adjusted Present Value (APV)‚ Capital Cash Flows (CCF)‚ Cash Flows to
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Harrington Corporation Professor Kevin Rock 1 Background • The Harrington Corporation is the leading producer of commercial desk calendars in the US at the time of the case – Founded by Joshua Harrington in 1920 – Headquartered in Boston – Currently owned by Thaddeus Baring‚ a descendant of the founder • Thaddeus Baring is contemplating retirement – The stress and strain of the calendar business is taking a toll on his health – “Every year another calendar: It’s relentless
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Overview of Active Gear: 1. Active Gear is a relatively small athletic and casual footwear company $470.3 million of revenue and $60.4 million of EBIT compared to typical competitors that sold well over a $1.0 billion annually Company executives felt its small size was becoming more of a disadvantage due to consolidation among Chinese contract manufacturers. Specialty athletic footwear that evolved from high performance to athletic fashion wear with a “classic” appeal. Casual/recreational footwear
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ij (weights wi‚ wj) 2 p i =1 j =1 N βi = Cov(ri ‚ rm ) σ im = 2 Var (rm ) σm 8. Capital Asset Pricing Model → Expected return financial asset i: r = rD × E ( ri ) = rf + [ E (rm ) − rf ] × β i 9. Weighted Average Cost of Capital (WACC): D E × (1 − T ) + rE × V V D⎤ D ⎡ 10. Cost of capital levered firm: r = rA ⎢1 − T × ⎥ (scenario 1) or r = rA − T × rD × (scenario 2) V V⎦ ⎣ D D 11. Cost of equity levered firm: rE = rA + [rA − rD ] × × (1 − T ) (scenario 1) or rE = rA + [rA
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CHAPTER 26 MERGERS‚ LBOs‚ DIVESTITURES‚ AND HOLDING COMPANIES Please see the preface for information on the AACSB letter indicators (F‚ M‚ etc.) on the subject lines. True/False Easy: (26.1) Synergistic merger FU Answer: a EASY 1. In a merger with true synergies‚ the post-merger value exceeds the sum of the separate companies’ pre-merger values. a. True b. False (26.1) Sources of synergy FU Answer: a EASY 2. Synergistic benefits can arise from a number of different
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CGA-CANADA ADVANCED CORPORATE FINANCE [FN2] EXAMINATION June 2011 Marks Notes: 1. Questions 1 and 2 are multiple choice. For these questions‚ select the best answer for each of the unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example‚ if the best answer for item (a) is (1)‚ write (a)(1) in your examination booklet. If more than one answer is given for an item‚ that item will not be marked. Incorrect answers will be marked as zero
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