difficulty level of questions Difficult 20% Typology of Questions In order to assess different abilities related to the subject‚ the question paper is like to include questions based on higher order skills‚ such as open-ended question based on case-study‚ diagrams‚ cartoons given in the text book. Blue Print Units Unit-1(5) Very Short Answer (1) Short Answer Question(3‚4) Long Answer I & II(5‚6) TOTAL 1(1) 4(1) - 5(2) 3(2) - 6(2) Unit-2(6) Unit-3(5)
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|Midterm Report (Weekend 3‚ Sunday midnight) Final Report (Weekend |10 | | |5‚ Sunday midnight) | | |3. Group Cases – 3 mini cases |Weekend 3‚ 4 and 5 (Sunday midnight) |20
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MODULE 5: CAPITAL STRUCTURE & COST OF CAPITAL After studying this module‚ you should be able to: 1. Define the overall cost of capital 2. Calculate the cost of individual components of a firms’ overall cost of capital‚ cost of debt‚ cost of preferred stock and cost of equity 3. Calculate the firm WACC 4. Be able to define the term capital structure. 5. Explain the traditional approach to capital structure and the valuation of a firm. 6. Discuss the relationship between leverage and the cost of capital
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million and develop the software. If demand is low‚ it can avoid losing the $30 million development cost by simply letting the license expire. Notice that the license is analogous to a call option: It gives the company the right to buy something (in this case‚ software for the new cell phones) at a fixed price ($30 million) at any time during the next year. The license gives the company a real option‚ because the underlying asset (the software) is a real asset and not a financial asset. • Risk Management
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and customers‚ rapid growth of lovely tourist destinations etc. [pic] Airline industry is considered as capital intensive industry. It needs big investment for huge range of expensive equipment and airplane‚ from airplanes to flight simulators to maintenance hangars‚ aircraft tugs‚ airport counter space‚ gates etc. Consequently airline industry has become one of the most capital intensive industries in the world that require large amount
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CFS WRITE UP ON CASE 6 BY SUSHMA T Session 6 – Structuring Repsol’s Acquisition of YPF Suggested Questions: 1) How significant are the expected synergies and restructuring effects? Please prepare an estimate of the value of these. For Repsol and its shareholders‚ the YPF acquisition deal is seen as an ideal strategic match. The Spanish oil company gets most of its revenues from activities like refining and gasoline stations‚ and must buy much of its crude oil from others‚ while YPF owns
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Corporate Finance - Target Capital Structure The target (optimal) capital structure is simply defined as the mix of debt‚ preferred stock and common equity that will optimize the company’s stock price. As a company raises new capital it will focus on maintaining this target (optimal) capital structure. Look Out! It is important to note is that while the target structure is the capital structure that will optimize the company\’s stock price‚ it is also the capital structure that minimizes the company\’s
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CHAPTER 12 QUESTIONS 12-1 Operating leverage affects EBIT and‚ through EBIT‚ EPS. Financial leverage generally has no effect on EBIT—it only affects EPS‚ given EBIT. 12-2 Because Firm A has a higher fixed operating costs‚ its operating income will change by a greater percentage than Firm B’s operating income if sales change. Firm A has a higher degree of operating leverage than Firm B. 12-3 If sales tend to fluctuate widely‚ then cash flows and the ability to service fixed charges
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Contents 1.0 Introduction 1 2.0 Executive Summary 1 3.0 Capital Structure 2 3.1 Types of Funding Utilised by Billabong 3 3.2 Recent trend in the level of leverage 3 3.3 Capital expenditure and financing: 5 3.4 Capital Structure of Similar Firms 6 3.5 Company Characteristics and Leverage policy 7 3.5.1 Taxes 8 3.5.2 Trade off Model 8 3.5.3 Pecking Order of Financing Choices 9 3.5.4 Signalling Theory 9 3.6 Optimal Capital Structure 10 4.0 Dividend Policy 10 4.1 Billabong dividend history
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An Implication of the Modigliani-Miller Capital Structuring Theorems on the Relation between Equity and Debt1 Ruben D. Cohen 2‚3 Abstract We illustrate here the effects of the Modigliani-Miller theorems on capital structuring‚ emphasising especially on the relationship between equity and debt. This is carried out numerically via a simplified financial statement‚ which takes us through the methodology that leads to the ROE‚ WACC and firm’s value‚ all plotted against leverage. Introduction The
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