CHAPTER 4 PART II: VALUATION AND CAPITAL BUDGETING Discounted Cash Flow Valuation The signing of big-name athletes is often accompanied by great fanfare‚ but the numbers are often misleading. For example‚ in late 2010‚ catcher Victor Martinez reached a deal with the Detroit Tigers‚ signing a contract with a reported value of $50 million. Not bad‚ especially for someone who makes a living using the “tools of ignorance” (jock jargon for a catcher’s equipment). Another example is the contract signed
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2. What is the maximum price they could expect to pay Monmouth‚ based on an analysis of valuation using discounted cash flow‚ calculation of WACC and terminal value determination? 2. Based on the DCF valuation and using a WACC of 8.25% (the beta assumed to be 1‚ the average beta of comparable firms and the coupon rate to be 7.96%‚ the rate for BB rated companies) and a growth rate of 5.5%. The fair price is $40.4 per share for Robertson‚ lower than the $50 offered by Simmons to sell their
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BUS 3303 Finance Course review Ale Previtero AGENDA 1. Overview of valuation cases 2. WACC • Cost of equity‚ choosing beta‚ choosing weights‚ when to use premium. 3. Valuation using Discounted Cash Flow (DCF) • Key assumptions‚ Terminal Value‚ sensitivity 4. Valuation using multiples • Key points‚ pros & cons‚ choosing comparable firms • Which multiple? Which year? Example. 5. Financing an Acquisition • Determine price. Financing. Making a decision. 6. Final exam
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Pensacola Surgery Center Time Value Analysis A Case Study in Healthcare Finance Catherine Grace Bautista 1. Consider the $50‚000 excess cash. Assume that Gary invests the funds in one-year CD. a. What is the CD’s value at maturity (future value) if it pays 10 percent annual interest? FV = PV x (1+i)n FV = 50‚000 x (1+10%)1 FV = 50‚000 x 1.10 FV = $55‚000 at maturity after a year b. What will its future value be if the CD pays 5 percent interest? If it pays 15 percent interest? @ 5% per annum
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Textbook Date Chapters Topics 23-Jan 1 Introduction 2 Review of financial statements 30-Jan 3 Analysis of financial statements 6-Feb 4 Introduction to the Time Value of Money 13-Feb Test via Moodle Chapters 2-4 20-Feb Midterm 1 27-Feb 5 Discounted Cash Flow Valuation 6 Bonds and Bond Valuation 6-Mar 13-Mar 7 Stocks and Stock Valuation Test via
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real assets can present challenges to financial analysts. Different models can be used to arrive at the closest estimate of value and yet certain issues will always arise. This case attempts to tackle two approaches in real asset valuation: Discounted Cash Flow (DCF) analysis and the issues surrounding such‚ as well as the Black-Scholes Model for Real Options. Questions to be addressed in the study are: 1. Evaluate Amoco’s and Apache’s corporate objectives and strategies. Is it reasonable to expect
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time value of money‚ valuation and rates of return‚ cost of capital and capital budgeting. Students will learn about how capital markets function‚ about different types of securities and financing instruments that exist‚ and about how to manage cash flows. Also‚ risk‚ working capital management‚ leverage‚ forecasting‚ and the analysis of financial statements and ratios are given with particular attention. This course should provide students with basic financial math skills and an excellent
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Consumer Understanding No company in the world has invested more in market research than P&G. We interact with more than five million consumers each year in nearly 100 countries. We conduct over 20‚000 research studies every year‚ and invest more than $400 million annually in consumer understanding. The insights we gain help us identify opportunities for innovation and better serve and communicate with our consumers. Innovation P&G is the industry’s innovation leader. Nearly all organic sales
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KENYA INSTITUTE OF MANAGEMENT Unit Name : Strategic Project Management Unit Code : DCM 200 S/No. | Name of Candidate | Admission No. | Question No. | Signature | 01 | Walter Ndege | NRB/52932 | 01 | | 02 | Omulo Moses Orinda | NRB/47835 | 02 | | 03 | Kasaine Samuel Tima | NRB/49635 | 03 | | 04 | Grace Muthoni Mwangi | NRB/51164 | 04 | | WBA No. : 01 Assignment submited in partial fulfillment for the award of diploma in project management of Kenya
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Course: project economics and evaluation Course code: C11PV Coursework title: Project Appraisal Student Number: H00152083 Lecturer: Dr. Esinath Ndiweni 1. Introduction The work is centred on the importance of project appraisal therefore emphasising on the financial and non-financial techniques of appraisal. The object and‚ therefore‚ the importance of a project appraisal is making an analysis to see whether the project is viable. It is vital to know whether a project is technically
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