NEW RULES ON DEBT CLASSIFICATION AND LOSS RESERVE By Truong Nhat Quang Duong Thu Ha Following Decision No. 127/2005/QD-NHNN dated February 3‚ 2005 issuing the Regulations on Loans Extended by Credit Institutions to Customers‚ the State Bank of Vietnam (SBV) has enacted a number of legal documents aimed at improving credit quality and risk supervision and management‚ including Decision No. 493/2005/QD-NHNN dated April 22‚ 2005 issuing the Regulations on Classification of Debts and Loss Provisioning
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future cost of debt. Joanna calculated the cost of debt by taking the interest expense for 2001 and dividing it by the average debt balance. The cost of debt for Nike is the effective rate that it pays on its current debt‚ meaning the yield to maturity of bonds should be used to make an estimate instead of the average debt balance. Through the use of past data‚ the average balance of debt‚ the 4.3% before-tax cost of debt does not accurately reflect Nike’s current or future cost of debt‚ and therefore
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ASSIGNMENT ONE – INDIVIDUAL 1. Challenges for business can come from internal and/or external pressures. Explain two such pressures affecting the current situation of T-Sole Ltd.(4 points ) ANSWER Internal pressure: The incentive policy with piece rate causes qualified workers to produced more and the new employee without adequate training started the work and this lead to poor quality production and lot of the footwear produced were rejected. The breaking down of equipment from time
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DOCUMENTS AVAILABLE FOR INSPECTION LIST OF STOCKBROKERS AND INVESTMENT BANKS ON THE NAIROBI STOCK EXCHANGE 2 3 4 5 7 8 9 4 5 8 23 32 35 37 46 48 5 54 87 89 95 97 Appendix I 23. CDS FORM 1. LIST OF CONTACTS ISSUER ISSUER : EQUITY BANK LIMITED Registered Head Office‚ NHIF Building 4th Floor‚ P.O. Box 7504-00200 NAIROBI Name / Title of Contact Persons Mr. James Njuguna Mwangi Chief Executive & Managing Director Mrs. Mary Wangari Wamae Company Secretary and Registrar Office
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BACKGROUND OF THE PROBLEM Since the late 1980s‚ Business School marketing professor Itamar Simonson has looked for ways to understand how consumers make choices. Much of his work debunks the accepted theory that giving consumers what they want and making a profit are the most basic principles of marketing. Customers may not know what they want‚ and second-guessing them can be expensive‚ says the professor who teaches MBA and PhD marketing and consumer decision-making courses. In Simonson’s words
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the required return on a firm’s equity. Explain. MM Proposition II states that higher debt does not affect cost of capital of a firm. The reason is that the lower cost of debt is offset by a greater cost of equity‚ which means investors demand a higher return on equity as a result of the higher risk coming with more debt‚ that holds the firm’s cost of capital unchanged. Based on the above proposition‚ moderate borrowing may not increase the return on equity. It is suggested that the firm’s
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| NIKE‚ INC.: COST OF CAPITAL | | | | | | Introduction Our report aims to help Kimi Ford make a decision on her investment of Nike. We choose WACC as our method to estimate the cost of capital‚ which can be used as a discount rate to verify whether Nike is correctly valued in current market. We have mainly four steps to calculate WACC: I. Identify the type of cost of capital; II. Figure out the weights of debt and equity; III. Calculate the cost of debt and equity respectively;
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Product: The product that I am choosing to write about is the Nike LunarGlide +3 running shoes. (a) List the typical stages of consumer buying process as discussed in the textbook. The typical stages of consumer buying process include need recognition‚ information search‚ the evaluation of alternatives‚ purchase decision‚ and post purchase behavior. Need recognition occurs when the buyer realizes they have a problem or need which is triggered by either internal or external stimuli. [1] The
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In the cost of equity calculation‚ we will use CAPM‚ the dividend discount model (DDM)‚ and the earnings capitalization model (ECM) to see the different in each and suggest the most suitable one. To sum it up‚ Ford is suggested to add Nike’s shares to its portfolio. Cohen’s Flaws According to the Cohen’s exhibits‚ there are 2 main flaws in her calculation of cost of capital and they are: 1. It’s correct that she used WACC since the company is funded with both debt and equity. However‚ the
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believe that other segments with Nike were large enough to make a considerable difference on the weights. She determined that Nike’s segments also did not have a significant difference in risk to justify using a multiple cost of capital. We agreed with Joanna and also used a single segment cost of capital. One difference we found between the way Joanna calculated WACC and the way we calculated Nike’s WACC was that she decided to use the book Values of debt and equity whereas we found it more beneficial
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