these funds that were initially outlayed. Finally‚ having a good sense of timing ‚ when using this model is also very critical when making financial decisions. Several alternatives models are commonly used when evaluating capital budgeting projects (Brealey‚ 1984): 1. The payback method 2. Accounting Rate of Return 3. Present Value 4. IRR (Internal Rate of Return) 5. MIRR (Modified Internal Rate of Return) 6. Real Options Academics criticize both the payback and accounting
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References: Anonymous (2000‚ August). The five-word CFO job description: An interview with Lowell W. Johnson. Healthcare Financial Management‚ 54(8)‚ 29-32. Retrieved from University of Phoenix Library February 20‚ 2006. Brealey‚ R.A.‚ Myers‚ S.C. and Allen‚ F. (2005) The Principles of Corporate Finance‚ 8th Edition. The McGraw-Hill Companies. Kooti‚ J. (Not Dated). Introduction to Finance. www.business.gsw.edu/busa/faculty/jkooti/finance/pres/chapt1/281;9 Ross‚ S.A.‚ Westerfield
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property is important as it helps managers to not be misled into accepting a low NPV project just because it is packaged with a high NPV project (Brealey and Myers 116-19). Other reasons for this widely used technique by managers are that it facilitates the managers’ work since the NPV calculation includes
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SUNWAY UNIVERSITY BUSINESS SCHOOL _ SUBJECT OVERVIEW FIN 1014: PRINCIPLES OF BUSINESS FINANCE Course Subject Code and Title Semester Prerequisite Contact Hours Lecturers Room Telephone No. Consultation Hours : : : : : : Bachelor of Science (Hons) in Accounting and Finance FIN 1014 Principles of Business Finance Aug 2013 None 2 hrs of lecture‚ 1 hr of tutorial and 1 hr of workshop Caroline Yap (caroliney@sunway.edu.my) Ruth Lim (sheauyenl@sunway.edu.my) : School of
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Introduction One of the most contentious financial issues that have provoked intense academic research during the last decades is the theory of capital structure. Capital structure can be defined as a ’Mix of different securities issued by a firm’ (Brealey and Myers‚ 2003). Simply speaking‚ capital structure mainly contains two elements‚ debt and equity. In 1958‚ through combining tax and debt factors in a simple model to price the value of a company‚ Modigliani and Miller firstly begin to explore a modern
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Financial Management SBB Fundamentals COURSE GUIDE Leiden University Faculty of Mathematics and Natural Sciences Science Based Business Program March 2011 © 2011 All rights reserved Centre for Business Studies (CBW) Leiden University Except as allowed under Dutch Copyright Law (1912)‚ no part of this material may be reproduced or transmitted in any form‚ by any means‚ electronic or mechanical‚ including photocopying‚ recording‚ or any information storage and retrieval system
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approach to valuation is its validity and usefulness in valuing companies and their stock prices. Various studies have established that a strong correlation between estimated future cash flows and the value of a firm exists (Copeland et al‚ 1994 ; Brealey and Myers ‚ 2000; Jones‚ 1998 ). In their study of 51 highly leveraged transactions (HLTs) ‚ Kaplan and Ruback (1995) found that the valuations using the DCF methods are within 10%‚ on average‚ of the market value of the transactions‚ providing a strong
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takeovers: The Journal of Finance • Vol. LXVI‚ No. 1 • March 1991. 18. Easterbrook (1984): Two Agency-Cost Explanations of Dividends. 19. The Modern Corporation and Private Property‚ Berle and Means. 20. Brealey & Myers on Corporate Finance: Capital Investment and Valuation ‚ Richard A Brealey‚ Stewart C Myers. 21. The Black (1976) effect and cross market arbitrage in FTSE-100 index futures and options. 11
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References: Behr‚ Mary E. (2002) “The Lowdown on Leasing” PC Magazine‚ pg 63 Borow‚ Deborah Brealey‚ Richard A.‚ and Stewart C. Myers. (1991) Principles of Corporate Finance. 4th ed. New York: McGraw-Hill‚ 1991. Department of Information Resources Lease vs. Purchase‚ Retrieved December 1‚ 2012 from http://www2.dir.state.tx.us/SiteCollectionDocuments/Document_Library/Policy-Stds-Guides-Procs/leasepurchase
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under 80. Now‚ would you undertake the project? c) Would it surprise you that the bank may have unilaterally offered to forgive debt? Explain. 2. Answer the following short answer questions. a) Read the section in Chapter 16 in the Brealey and Myers textbook concerning Rights Issues. The rights issue is an alternative approach used by management to obtain equity financing. In general‚ you should note the following about rights issues: • Setting a lower subscription price makes the deal
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