International BBCi 2009 WS 2009/10 Final Examination Principles of Corporate Finance I Dr. Kinga Niemczak 14.12.2010 Name: ___________________________ Student No.: ______________________ 1. a. Calculate the value of a 4.65% five-year €1‚000 bond‚ if you know that the bond is rated AAA and the typical YTM for such bonds is 6.25%. (6 points) b. How will the value of this bond change (in %) if yield increases to 7%? (use duration)
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NOVA School of Business and Economics Corporate Finance‚ 2nd Semester 2012/2013 Case Study TOSCO is a company listed in the Portuguese Stock Exchange operating a supermarket chain established in Portugal for many years. The market for traditional food retailers is saturated‚ and there is no room for growth under the same business model. TOSCO’s shareholders have been pressuring the management to pursue new opportunities in order to increase the value of their shares. The management
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CORPORATE FINANCE – CONCEPT QUESTIONS Class Notes - Introduction to Corporate Finance 1. Finance point of view: Corporation: a money processing machine? * Product markets: everything what corporates make (lead with customers‚ suppliers‚ labor) * Capital markets: generic term for the entities which supply cash to this money processing machine‚ and the processing machine uses the money to do things and then periodic sends money back to the capital market there are inflows from the
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of the project (depreciate straight-line to salvage value) and an initial $10‚000 increase in NWC. Your marginal tax rate = 34% and the required return = 15%. What is your minimum bid? NPV = 0 = -60‚000 + OCF(PVIFA15%‚3) + 20‚000(PVIF15%‚3) NPV = 0 = -60‚000 + (NI + Dep)(2.2832) + 20‚000(0.6575) NPV = 0 = -60‚000 + [(S – VC – FC - Dep)(1 – T) + Dep](2.2832) + 13‚150.32 46‚849.68 = [(4P – 4(10‚000) – 12‚000 – 13‚333.33)(1 - .34) + 13‚333.33](2.2832) 20‚519.31 = (4P – 65‚333.33)(0.66)
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Please see Exhibits below for a snapshot of the capital budget and NPV values. This information seemed to be very promising for the project in general. However‚ our continued analysis showed the project to be very sensitive to the sales price per unit of the refrigerator. We used the average demand scenario to produce a sensitivity analysis and found that with just a 5% decrease in the sales price of the refrigerator the NPV quickly dipped into a negative value thus showing the project to be
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receive payment from customers. ) According to Jennifer Zhang’s analysis‚ we divide the stand-alone value of AirThread into two parts—operating value and non-operating value-- and then add the two parts together to get the result. First‚ when we calculate the operating value‚ we use the DCF model. We pick the risk-free rate from historical annual returns investments on T-bonds from 1928 to 2007 and use the geometric average‚ which is 5.4%‚ and collect the 5% equity market risk premium from the casebook
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Introduce In this report will analyse budgets and make appropriates decisions and explainn the calculation of unit costs and make pricing decisions using relevant informations. And than this report will assess the viability of a project using investment appraisal techniques and discuss the main financial statements. Compare appropriate formats of financial statements for different types of business. Interpret financial statements using appropriate ratios and comparisons‚ both internal and external
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( Design of a Small–Scale Biodiesel Production System Jeffrey Anderson‚ Jessica Caceres‚ Ali Khazaei‚ Jedidiah Shirey Abstract – The city of Fredericksburg is located in central Virginia and is home to 592 farms covering 16% of the total land area. Farms in this region have experienced declining profits from an average of $555 per farm in 1997 to -$14‚931 per farm in 2007. One of the ways to reduce operating costs and return to profitability is to significantly reduce diesel costs. An alternative
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Case analysis: Statement of problem: 1. First of all Martin have to find out if the company should improve the equipment. 2. If they decide to improve‚ then‚ which currency should they make the purchase in? 3. How can they calculate what their expected rate of return at the most certainty? Analysis: The general question is if the company should make the improvement or not‚ and if they do (assuming the project is beneficial) which currency will give the highest profit? Since it is calculated
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1 $94‚000 2 $114‚000 3 $134‚000 4 $114‚000 5 $94‚000 Based on this information‚ answer the following questions: 1) How much money will be in the bank account if you leave the $300‚000 alone until you need it in five years? Answer Calculate the compound interest using the formula A=P(1+R)^n Where A= amount at end of period P= the amount you deposit today R= interest rate N= time in years So A= 300‚000(1+0.06)^5 A=$ 401‚467.67 This means you will have that amount if you leave
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