Corporate Finance Career Overview If you work in private enterprise‚ your company measures its success at the end of the year by comparing how much money it made to how much it spent. If it has made more than it has spent‚ it was a good year. If it has made less than it has spent‚ it was a bad year—or the company is in an investment phase. (In other words‚ like Amazon.com‚ it spent more than it made because the company and its investors believed it would realize a profit in the near future
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“Case: Tianjin Plastics” Vrije Universiteit Amsterdam Course Advanced Corporate Finance Students Fatin Azear Jos Kusters Maaike van der Steen Case: Tianjin Plastics This assignment considers the case of Tianjin Plastics. Pat Johnson‚ project finance analyst for Maple Energy (U.S.-based international power plant developer)‚ has to make a recommendation regarding the financial viability of the Tianjin Plastics power plant project in China. The recommendation would require a final evaluation of
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Introduction To Corporate Finance: A division or department that oversees the financial activities of a company. Corporate finance is primarily concerned with maximizing shareholder value through long-term and short-term financial planning and the implementation of various strategies. Everything from capital investment decisions to investment banking falls under the domain of corporate finance. Corporate finance is the funding provided to support the operations of the venture itself‚ as distinct
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Chapter 2 -CAPM: how risk affects return -Expected Return (on investment): mean value of its probability distribution of returns; greater the probability return will be below expected‚ greater the stand-alone risk -Risk Averse: he/she must be compensated for holding risky assets -Asset has 2 risk types: Diversifiable risk can be eliminated by diversification; market risk cannot be eliminated -Market risk measured by standard deviation of returns on portfolio consisting of all stocks -Relevant
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THE PRINCIPLES OF CORPORATE FINANCE CHAPTER 1: The time value of money We are going to link the present and the future by using the notion of interest rate that could be called discount rate‚ required rate of return or cost of capital. Finance is all about cash flows but more precisely about the exact date of the realization of the cash flow. I) PRESENT VALUE Example 1: What is the value today of $110 to be received in one year? - suppose the interest rate ‚ r =10%
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The Bible and Corporate Finance People rarely associate religion with the business world or the finance industry‚ nor do they think religion can guide the practice. From a logical standpoint religion and a firm’s operations do not correlate. From a societal view people see good religious peoples businesses fail while godless industries thrive. The question usually asked is how does the Bible apply to business world? The real question should be how could the Bible and God guide me in my profession
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it would be a good idea to take Boeing as it has been into some media frenzy recently‚ because of its latest commercial aircraft the 787” Dreamliner” grounded by Federal Aviation Administration (FAA) and aviation authorities around the world. A good case to see how a company future assets valuation may be impacted by investment strategies into research development; The company operates on five segments‚ it specializes in manufacturing of commercial aircraft (747‚ 777‚ 787)‚ but also in military aircraft
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Problem set 2 16-1. Gladstone Corporation is about to launch a new product. Depending on the success of the new product‚ Gladstone may have one of four values next year: $150 million‚ $135 million‚ $95 million‚ and $80 million. These outcomes are all equally likely‚ and this risk is diversifiable. Gladstone will not make any payouts to investors during the year. Suppose the risk-free interest rate is 5% and assume perfect capital markets. a. What is the initial value of Gladstone’s equity
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Aswath Damodaran 2 THE OBJECTIVE IN CORPORATE FINANCE “If you don’t know where you are going‚ it does’nt maCer how you get there” First Principles 3 Aswath Damodaran 3 The Classical Viewpoint 4 ¨ ¨ ¨ ¨ Van Horne: "In this book‚ we assume that the objecKve of the firm
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Week 1: Introduction to Corporate Finance 1.4. Assignment 1a Due date: January 30‚ 2011 Instruction: Please submit your assignment as an attachment to my Blackboard E-mail by midnight on the due date Assume that you recently graduated with a degree in finance and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle Dellatorre‚ a professional tennis player who has just come to the United States from Chile
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