Coursework Assignment Number 1 The Gordon Model is particularly useful since it includes the ability to price in the growth rate of dividends over the long term. It is important to remember that the price result of the Constant Dividend Growth Model assumes that the growth rate of the dividends over time will remain constant. This is a difficult assumption to accept in real life conditions‚ but knowing that the result is dependent on the growth rate allows us to conduct sensitivity analysis to
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group of UBS AG Valuation Primer Series Peter Suozzo +852-2971 6121 ■ peter.suozzo@ubsw.com Stephen Cooper +44-20-7568 1962 ■ stephen.cooper@ubsw.com Issue 1 This is the first in a series of primers on fundamental valuation topics such as discounted cash flow‚ valuation multiples and cost of capital. This document explains how to calculate and use multiples commonly used in equity analysis. Gillian Sutherland +44-20-7568 8369 gillian.sutherland@ubsw.com Zhen Deng +1-212-713 9921 zhen.deng@ubsw
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Valuation Primer Series Peter Suozzo +852-2971 6121 s peter.suozzo@ubsw.com Stephen Cooper +44-20-7568 1962 s stephen.cooper@ubsw.com Issue 1 This is the first in a series of primers on fundamental valuation topics such as discounted cash flow‚ valuation multiples and cost of capital. This document explains how to calculate and use multiples commonly used in equity analysis. Gillian Sutherland +44-20-7568 8369 gillian.sutherland@ubsw.com Zhen Deng +1-212-713 9921
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payouts. The earnings quality of Tamawood is quite poor‚ which points towards manipulation by management to achieve a desired outcome. Although they have in place suggested corporate governance measures‚ there are still inadequacies that make it possible for earnings management to occur. Tamawood appears to be quite profitable because its return on equity is relatively high. However‚ with net income considerably higher than its cash flows from operations‚ the sustainability of these earnings is questionable
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Dividend Policy Vinod Kothari Corporations earn profits – they do not distribute all of it. Part of profit is ploughed back or held back as retained earnings. Part of the profit gets distributed to the shareholders. The part that is distributed is the dividend. The ratio of the actual distribution or dividend‚ and the total distributable profits‚ is called dividend payout ratio. How much of its profits should a corporation distribute? There are several considerations that apply in answering this
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Explain whether or not a firm in monopolistic competition earning abnormal profits is productively and allocatively efficient. A monopolistic competitive industry is made up of a fairly large number of firms. In relation to the size of the Industry‚ monopolistic competitive firms are small. They produce slightly differentiated products‚ for example by brand name‚ color‚ design and quality of service. A firm in monopolistic competition has a downward sloping demand curve‚ since they are (extended)
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Ann SALVADORA‚ Jerick Cezar 14 October 2014 Problem Statement Victoria Chemicals (VC) experienced a significant downturn in its financial performance from 2006 to 2007. The company was under pressure to improve its financial performance as its earnings ad fallen 38% (from 250 pence to 180 pence per share). The company’s decline in value was largely attributed to its production process and the condition of its facilities. Both of VC’s existing plants were outdated‚ semi continuous‚ and labor intensive
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1. Calculate TRUST’s company after-tax WACC. The risk-free rate was 4.21%‚ the market risk premium was 6% and the company tax rate was 30%. The WACC should be rounded to four decimal places. After-tax WACC = rD (1-Tc) D/V + rE E/V rE = rf + βequity(rm – rf) rE = 0.0421 + 0.81(0.06) rE = 0.0907 E = number of outstanding shares x current share price E = 60 million x $3.43 E = $205.8 million D = $44 million bank loans + $1.2 million short-term hire purchase commitments D = $45.2 million
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A Blueprint for Corporate Governance Fred R. Kaen AMACOM AMERICAN MANAGEMENT ASSOCIATION A Blueprint for Corporate Governance This Page Intentionally Left Blank A Blueprint for Corporate Governance Strategy‚ Accountability‚ and the Preservation of Shareholder Value Fred R. Kaen American Management Association New York • Atlanta • Brussels • Buenos Aires • Chicago • London • Mexico City San Francisco • Shanghai • Tokyo • Toronto • Washington‚ D. C. Special discounts on
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The net cash flows are the owner’s earnings of the company over a long period of time. Therefore‚ by calculating the business value in this way‚ investors can make a comparison of the difference in business enterprises in such a sensible way. Even if the business is growing rapidly but with unknown future revenues‚ the company is said to be non-understandable and the formula for this approach cannot be used. This is due to the fact that the discounted cash-flows approach is conventional as long
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