Corporate Financing Decision: 0 NPV transaction (not always 0 NPV‚ subsidy= pos npv‚ creating new security) Efficient Capital Markets: price reflects available info‚ investors receive fair price when interact‚ firms get fair price for securities it sells Pt= Pt-1 + Expected $ return given risk + Random price error Rt= E(Rt) + Error t (abnormal return‚ efficient mkt makes unpredictable) Rt= Rft + B(Rmt – Rft) Weak: past market info‚ weak form efficiency‚ tech analysis will fail Semi-Strong:
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TOPIC 1 Tutorial Questions (Due in week 2 commencing 4th March) | Hint Box | Question 1:Using the decision model from page 5 of the text book explain how you allocate your time each week during the study period to achieve a credit grade in AFB. | Remember to present your answer using the steps in the decision making process.The constraint is 24 hours per day and 7 days in the week. | Question 2:Accounting is described as the language of business‚ as everybody is affected by the business
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If I were the finance Minister of India - Essay In the economy of a developing county like India‚ the role of the Finance Minister is a crucial one. This is more so in the case of the country which has chosen the path of planned development‚ as Indian has done. If ever I become the Finance Minister of the country‚ my first effort would be to root out the demon of back money. It is black money which leads to inflation and to the rise in prices‚ and this makes financial control almost impossible
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us first understand what is meant by Public Finance. Public finance of country‚ as is obvious by the name‚ is the money collection of a country’s Government by way of taxes. The sources of revenue of the States and the Centre are called the public finance of a country‚ and this is because this amount of money is the money earned by the public and given to the Government for development works‚ and this is exactly why this money is termed as public finance. Lately‚ the sources of revenue of the State
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1 PART A MULTIPLE CHOICE: ANSWER ALL QUESTIONS Answer all questions. Write in your answer book the number of the question and ONE letter. Question 1 Consider a bond with a 10% coupon and with yield to maturity = 8%. If the bond’s yield to maturity remains constant‚ then in 1 year the bond’s price will be: a. Higher b. Lower c. Unchanged d. Cannot answer based on given information Question 2 The yield to maturity on a bond is: a. Below the coupon rate when the bond sells at a discount
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Double taxation The same income getting taxed multiple times. Maximizing shareholder value Management principle that implies that the ultimate measure of a company’s success is the extent to which it enriches its shareholders. Initial Public Offering Stock Launch – stock in a company is sold to the general public for the first time Sole Proprietorship‚ Partnership‚ Corporation‚ LLC‚ Subchapter S Corp (Pros and Cons of each) Sole Proprietorship Pros Simplicity and ease of operation Cons
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Chapter 1 Corporate Finance- the acquisition and efficient use of funds required by the fund The acquisition refers to the finance decision Efficient use of funds refers to the investment decision A major aspect of corporate finance is the creation and determination of value Objective of Financial Management- Maximize shareholder wealth is the main goal—to maximize the market value of the firm 3 Main Decision Areas of Financial Manager to Achieve Maximization: 1. Investment Decision- What
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Assignment 6 (20 points) Assignment 6: Business Finance Instructions !Save this file in your course folder‚ and name it with Assignment‚ the section number‚ and your first initial and last name. For example‚ Jessie Robinson’s assignment for Section 1 would be named Assignment1JRobinson. !Type the answers to the assignment questions below. Use complete sentences unless the question says otherwise. You will have more than one day to complete an assignment. At the end of each day‚ be sure to save
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3209AFE INTERNATIONAL FINANCE Tutorial 6 Questions Question 1 Eastbridge‚ a U.S. based company purchased 100 000 shares of Cambridge‚ a British company a year ago. Eastbridge has decided to sell all the shares in one month time to finance the company other operation. Eastbridge expects the share price of Cambridge to be £7.00 in one month time. To hedge against exchange rate exposure‚ Eastbridge sold £ forward contract at the forward rate of US$1.63 based on the expected share price of
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Chapter 14 Capital Structure in a Perfect Market 14-1. Consider a project with free cash flows in one year of $130‚000 or $180‚000‚ with each outcome being equally likely. The initial investment required for the project is $100‚000‚ and the project’s cost of capital is 20%. The risk-free interest rate is 10%. a. What is the NPV of this project? b. Suppose that to raise the funds for the initial investment‚ the project is sold to investors as an all-equity firm. The equity holders will receive
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