2.3 Capital Structure Capital structure is a mix of a company’s long-term debt‚ specific short-term debt‚ common equity and preferred equity. The capital structure is how a firm finances its overall operations and growth by using different source of funds. The two companies we have chosen are Dutch Lady Milk Industries Berhad and Nestle (Malaysia) Berhad‚ In this assignment we have analyze two years performance (2012-2013) of both company. We analyzed the composition of the capital structure in
Premium Finance Dividend yield Stock market
factors. Market risk 9. This is a measurement of the co-movement between two variables that ranges between -1 and +1. Correlation 10. This is the investor’s combination of securities that achieves the highest expected return for a given risk level. Optimal portfolio Chapter 10 11. Which of the following is a true statement? Firms can quite possibly change their stocks’ risk level by substantially changing their business. 12. This is the reward investors require for taking risk. Risk premium 13.
Premium Net present value Investment Internal rate of return
Foods. Process Steps 1. Estimate the WACC for Kraft 2. Calculate historic growth rate 3. Calculate the average income tax rate and determine the relationship between sales and cost of sales‚ capital expenditures‚ depreciation‚ and net working capital 4. Determine the sales growth rate required to meet Kraft’s 2016 sales projections 5. Project 5-year cash flows starting in 2012 and ending in 2016 6. Discount cash flow projections beyond 2016 at the WACC rate to estimate the projected firm value
Premium
2. Calculate Midland’s corporate WACC. Be prepared to defend you specific assumptions about the various inputs to the calculations. Is Midland’s choice of the MRP appropriate? If not‚ what recommendations would you make and why? In order to calculate Midland’s overall corporate WACC we must first determine the cost of equity and the cost of debt. The cost of equity can be defined as the risk-weighted projected return required by investors‚ where the return is largely unknown. Therefore the
Premium Weighted average cost of capital Mathematics Net present value
Paramount Communications Inc. Question 1 Paramount is a takeover target because other firms see synergy value associated with combining Paramount’s assets and operations with their own. Specifically‚ Paramount has several assets that complement other media companies. Value in the media is generated through several different channels. As a media company‚ Paramount has a presence in most of the entertainment sectors (see Exhibit 2). There seems to be a drive toward consolidation and several industry
Premium United States Patient Health care
flotation fees‚ which will be amortized over the three-year life of the loan. If Gemini financed the project entirely with equity‚ the firm’s cost of capital would be 18%. The corporate tax rate is 30%. Using the Adjusted Present Value (APV) method‚ determine whether or not Gemini should undertake the project. 17.3 MVP‚ Inc.‚ has produced rodeo supplies for over 20 years. The company currently has a debt-to-equity ratio of 25% and is in the 40% tax bracket. The
Premium Net present value Cash flow Internal rate of return
Tools Variance Analysis | | When actual material costs are different than total standard costs determine the cause. Variance Analysis | | When actual material costs are different than total standard costs determine the cause. Contribution Margin Analysis | Management has received a special order. How will profitability be impacted if the order is accepted? | Contribution Margin Analysis | Management has received a special order. How will profitability be impacted if
Premium Net present value Internal rate of return Investment
calculated BV(Debt) and taken proxy for MV(Debt)‚ for equity we have considered market value Keeping going concern of company in mind we have taken 30-year treasury yield value in calculation Taking cost of capital of company as hurdle rate will not be optimal because riskiness of projects from different divisions are different hence we need to calculate cost of capital separately for every division Then based on Target D/E we have unlevered and levered the Beta value to arrive at new Beta which is aligned
Premium Mathematics Asset Finance
Executive Summary Blaine Kitchenware Inc. (BKI)‚ a mid-sized branded small appliances producer for kitchens‚ is founded in 1927 and is managed by the Blaine Family. With the commitment to high quality and offering diverse kitchen appliances‚ Blaine has been growing rapidly over the years and went public in 1994. Recently‚ the company continues to expand its business by outsourcing its production abroad; and over 35% of its revenue comes from outside of U.S. Blaine is characterized as “highly liquid
Premium Stock market Finance Corporate finance
Wrigley stock? d. Earnings per share? e. Debt interest coverage ratios and financial flexibility? f. Voting control by the Wrigley family? 3. What is Wrigley’s current (prerecapitalization) weighted-average cost of capital (WACC)? 4. What would you expect to happen to Wrigley’s WACC if it issued $3 billion in debt and used the proceeds to pay a dividend or
Premium Finance Corporate finance Stock