Dividend: http://www.dividend.com/dividend-stocks/consumer-goods/beverages-soft-drinks/ko-coca-cola-co/#dividend-growth-history Investopedia. (n.d.). Capital Asset Pricing Model - CAPM. Retrieved from Investopedia: http://www.investopedia.com/terms/c/capm.asp Investopedia. (2104‚ April 18). Dividend Discount Model - DDM. Retrieved from Investopedia: http://www.investopedia.com/terms/d/ddm.asp Investopedia. (n.d.). Retun on Equity. Retrieved April 14‚ 2014‚ from Definition of Return on Equity: http://www
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to be estimated. You do not maximise your marks if you cut and paste material without any analysis. 2. Estimation of the value of the company’s shares using: * Dividend valuation model (DDM): You are expected to use the CAPM to estimate the discount rate needed in the DDM. * Also‚ you are expected to estimate the beta needed. You cannot pick a beta value estimated elsewhere (e.g.‚ Bloomberg) and use it in your report. Attach details of your work as an appendix. * Adjust
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Solution to Case 23 Evaluating Project Risk It’s Better to Be Safe Than Sorry! Questions: 1. What seems to be wrong with the way the NPV of each project has been calculated? Indicate without any calculations‚ how Pete and John should go about recalculating the projects’ NPVs. The NPV of each project has been calculated by discounting the cash flows at the 8% before-tax cost of debt. This is incorrect. Since the company has debt‚ preferred stock and common
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investment. Tools such as the dividend discount model‚ Price-earnings Model‚ and the application of the capital asset pricing model will be used to determine if Wal-Mart would be a smart investment at the given time. Using the Dividend Discount Model‚ or DDM‚ is one way to evaluate the worth of Wal-Marts stock. This model states that the current stock price represents the present value of all the expected future dividends discounted at the investors required rate of return. To determine the firm’s stock
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…………………………………………………….. 4-5 3. The Yamama Saudi Cement Company…………….…………………………... 6 4. Company Valuation ……………………………………………………………... 7-11 4.1. The Free Cash Flow Model (FCF) ………………………………………... 7 4.2. The Dividend Discount Model (DDM) …………………………………… 8 4.3. The Discounted Cash Flow Model (DCF) ………………………………... 8-9 4.4. Key Indicators ……………………………………………………………... 9-10 4.5. Peer Comparison …………………………………………………………... 10-11 5. Conclusion ………………………………………………………………………
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[pic] EnCana Corporation -Cost of Capital Nabil Naouli Yong Peng Ahmed Alenazi Raj Kancharapu Table of Contents 1. Introduction 2 2. History 2 a. Top Competitors 4 b. Major Product and Services 5 c. SWOT Analysis 5 3. Calculating Cost of Capital 6 a. Calculating Cost of Equity 7 i. Risk free rate 7 ii. Market Risk Premium 8 iii. Beta 8 b. Calculating Cost of Debt 9 c. Weighted Average Cost of Capital ( WACC ) 10 d. WACC- EnCana Corp. 2010 12 4. Discussion
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Analysis 19 III. Total Assets Turnover 19 IV. Financial Leverage 20 4.3 Required Rate of Return 21 I. Beta (β) 21 II. Risk Free Rate 24 III. Market Risk Premium 24 IV. Capital Asset Pricing Model (CAPM) 25 4.4 Growth Rate 25 5. Valuation Analysis 27 5.1 Dividend Discount Model (DDM) 27 I.
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Securities Analysis Index 1. The background of the company 2. AT&T’s Life Cycle Analysis 3. Analysis of Return on Equity 4. The company’s projected future growth rate of earnings 5. Analysis of its required rate of return using the CAPM measurement 6. The company’s intrinsic value using the discount valuation techniques 7. Conclusions 8. References 1. AT&T Background AT&T Inc. is an American multinational corporation that provides telecommunications services
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Case Study Nike Introduction Good morning ladies and gentlemen and thank for taking the time to meet with us. Nike was founded on January 25‚ 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight. The company officially became Nike‚ Inc. on May 30‚ 1978. Nike has various products which include footwear as well as other apparel that compliment the former. This accounts for 92 percent of the company’s revenue. The other 8 percent comes from equipment and non Nike brand products‚ such as Cole
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What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? WACC is the weighted average cost of capital. It can be calculated as: WACC = (Weight of funding source 1) x (Cost of funding source 1) + … + (Weight of funding source n) x (Cost of funding source n) Usually this will be simply: WACC = (Percentage of debt) x (Cost of debt) + (Percentage of equity) x (Cost of equity) It is important to estimate
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