EconomicThis document has been made available on www.actuaries.org.uk with the permission of the Society of Actuaries‚ Schaumburg‚ Illinois. Copyright 2008. Specialty Guide on Economic Capital Version 1.5 March 2004 Specialty Guide on Economic Capital Section I. II. Page FOREWORD...................................................................................................................1 INTRODUCTION AND OVERVIEW .........................................................
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Nike Inc.‚ Cost of Capital Dr. Romer Finance 3613 By: Joseph White Michael Parker NorthPoint a mutual-fund-management firm is contemplating adding Nike Inc. stocks to its Large-Cap Fund. Kimi Ford a portfolio manager for NorthPoint has developed a discounted-cash-flow forecast to help make the decision. Kimi comes to the conclusion that Nike is overvalued at its current price of $42.09 with a 12 percent cost of capital that she estimated. To determine if her estimation is correct about
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Unfortunately‚ the concept of risk is not a simple concept in finance. There are many different types of risk identified and some types are relatively more or relatively less important in different situations and applications. In some theoretical models of economic or financial processes‚ for example‚ some types of risks or even all risk may be entirely eliminated. For the practitioner operating in the real world‚ however‚ risk can never be entirely eliminated. It is ever-present and must be identified
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A WINTER TRAINING REPORT ON “PORTFOLIO MANAGEMENT OF CNX MIDCAP COMPANIES” AT KOTAK SECURITIES LTD. SURAT IN PARTIAL FULFILLMENT OF THE REQUIREMENT IN THE MBA DEGREE OF VEER NARMAD SOUTH GUJARAT UNIVERCITY‚ SURAT. SUBMITTED BY: ANKIT S. LAPSIWALA MBA-FINANCE GUIDED BY: PROF. SAMEER ROHADIA (GRIMS) MR. MRUGESH PANCHAL (BM - KOTAK SECURITIES LTD.) G.I.D.C. RAJJU SHROFF ROFEL INSTITUTE OF MANAGEMENT STUDIES G.I.D.C. VAPI 2006-07 STUDENT DECLARATION I undersigned‚ Ankit S. Lapsiwala
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addressing the following issues. Please include the Excel sheets to support your answers. 1. How are Mortensen’s estimates of Midland’s cost of capital used? How‚ if at all‚ should these anticipated uses affect the calculations? Janet Mortensen‚ Senior Vice President of project finance for Midland Energy Resources has calculated yearly annual cost of capital investments for Midland and each of its three divisions. The three divisions consist of oil and gas Exploration and Production (E&P)‚ Refining
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adopting the CAPM model‚ to calculate the cost of capital of the investment. Mr. Ricketts & his management team will then make a sound financial decision basing on our analysis results. According to our agreed plans‚ Mr. Ricketts has specifically requested us to perform the following three tasks and provide our recommendation accordingly. I. Briefly discuss the asset beta and CAPM model‚ and explain the steps for computing the asset beta and CAPM to produce the cost of capital for the investment
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Telus: The Cost of Capital Business 3019 Synopsis Two managers attending an executive education course attempt to develop a cost of capital estimate for a leading telecommunications company‚ Telus The two managers are somewhat confused about the costs of various sources of capital‚ the calculation of the overall cost of capital and the appropriate use of the hurdle rate What Does Cost of Capital Mean? Cost of capital is what it will cost the firm‚ on the margin‚ today‚ to
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single firm-wide discount rate because the operations of the three divisions differ drastically. However‚ the company has to ensure that the company uses an appropriate discount rate for each division. Therefore‚ we calculate the appropriate cost of capital for Marriott as well as for each of the three divisions. A detailed analysis is presented about the appropriate calculation inputs for each of the three divisions and various assumptions‚ made while performing the calculations‚ are justified. 1)
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What is cost of capital? The cost of capital is the cost of obtaining funds‚ through debt or equity‚ in order to finance an investment. It is used to evaluate new projects of a company‚ as it is the minimum return that investors expect for providing capital to the company‚ thus setting a benchmark that a new project has to meet. Importance The concept of cost of capital is a major standard for comparison used in finance decisions. Acceptance or rejection of an investment project depends on the
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Teacher’s Name: Dr. Vijay Shenai Submitted by: SOHAIL BAJWA Student ID: C0395KKKK1013 Company Allocated for the Assignment: Experian PLC Total Words: 2‚211 (Excluding Reference List &Appendixes) TABLE OF CONTENTS INTRODUCTION: 3 A- Market Model and Its Implications 4 Interpretations of Experian PLC Regressions Results 5 Sector Regression Analysis 6 Interpretations of Sector Regressions Results 6 B- Equity Market Risk Premium 7 Calculation of Market Risk Premium 8 Yield Curve 9 Importance
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