A company with low gearing is one that is mainly being funded or financed by share capital (equity) and reserves‚ whilst the one with a high gearing is mainly funded by loan capital. Now the question to address is which of the two (equity and debt) is cheaper to the company? The answer is that cost of debt is cheaper than cost of equity. This is because debt is less risky than equity and the tax advantage of debt over equity as discussed below: Risk: debt is less risky than equity because: • the
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Asian Journal of Finance & Accounting ISSN 1946-052X 2012‚ Vol. 4‚ No. 1 Capital Structure and Firm Performance in the Financial Sector: Evidence from Australia Vedran Skopljak School of Economics and Finance‚ La Trobe University Kingsbury Drive‚ Bundoora‚ Vic 3086‚ Australia Tel: 61-3-9479-1111 E-mail: vedran.skopljak@latrobe.edu.au Robin H. Luo (Corresponding author) Department of Finance‚ Wuhan University Luojia Hill‚ Wuhan 430072‚ China Tel: 86-27-6875-2740 E-mail: robin.h.luo@gmail.com
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30017 Corporate Finance Hannes Wagner The included PDF files are examples of case study write-ups made by students of the 30017 Corporate Finance course in 2012-2013. The underlying case was “Hutchison Whampoa Limited: The Capital Structure Decision”. The write-ups were evaluated as “excellent” and the students have agreed for their work to be distributed. All rights to their work remain with them. The instructions that students received were the following: “Your assignment is to provide a written
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Application of Capital Structure‚ Costs of Capital for Multiple Division firms Case Analysis: Pioneer Petroleum Corporation (PPC).1 Submitted by: Joseph Donato N. Pangilinan‚ FICD Date Presented: April 12‚ 2012 Introduction: This landmark case seeks to break the risk-reward trade off involved in calculating Capital Cost. The object of the solution must be to minimize project risks while maximizing project opportunities available. We want a rate and a rating system that does not unnecessarily
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The Wm. Wrigley Jr. Company: capital structure‚ valuation‚ and cost of capital Teaching Note Synopsis In June 2002‚ a managing director of an active-investor hedge fund was considering the possible gains from increasing the debt capitalization of the Wm. Wrigley Jr. Company. Wrigley had been conservatively financed and at the date of the case‚ carried no debt. The tasks for the student are to: Estimate the potential change in value from relevering Wrigley using adjusted present value analysis
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Capital Structure Decisions: Which Factors Are Reliably Important? Murray Z. Frank and Vidhan K. Goyal∗ This paper examines the relative importance of many factors in the capital structure decisions of publicly traded American firms from 1950 to 2003. The most reliable factors for explaining market leverage are: median industry leverage (+ effect on leverage)‚ market-to-book assets ratio (−)‚ tangibility (+)‚ profits (−)‚ log of assets (+)‚ and expected inflation (+). In addition‚ we find
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Capital Structure‚ Profitability and Market Structure: Evidence from Textile Industries in Bangladesh. Introduction In corporate finance‚ the academic contribution of Modigliani and Miller (1958‚ 1963) about capital structure irrelevance and the tax shield advantage paved the way for the development of alternative theories and a series of empirical research initiatives on capital structure. The alternative theories include the trade-off theory‚ the pecking order/asymmetric information theory
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URBAN PATTERN Settlements of any size and type can always be formally synthesized by their patterns‚ so it means pattern identify the settlements. Town houses in gridiron blocks‚ high-rise office structures‚ academic campuses‚ suburban estates‚ and highway retail sprawl are good examples. Urban form‚ then‚ is a result of the bringing together of many elements in a composite totality:the urban pattern. Patterns are the outstanding formal features of urban areas. A pattern can be defined as
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The Impact of the Concept of “Tank (Wewa)-Stupa (Dagaba)‚ Village (Gama) - Temple (Pansala)” (TSVT) to an Integrated Tourism Promotion System: A study in Anuradhapura District‚ Sri Lanka Dayangana K T L U S a‚ Gamlath G R M b a Lecturer‚ Department of Tourism and Hospitality Management‚ Faculty of Management Studies‚ Rajarata University of Sri Lanka. udaya8199@gmail.com b Project Accountant‚ National Post Consumer Plastic Waste Management Project‚ Central Environmental Authority‚ Sri Lanka.
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Which pattern of knowing do you believe is the most important to your current practice of nursing? Defend your answer. The patterns of knowing nursing denote the importance in meeting goals and developing effective outcomes in nursing practice. Among Carper’s pattern of knowing‚ the most important focus in my job‚ which is in the Children Cancer Unit‚ is personal knowing. Carper describes personal knowing as being affected with the knowing‚ encountering and symbolizing of the individual self (Johns
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