QUESTION 17.11 PLATYPUS LTD – WOMBAT LTD 75% Platypus Ltd Wombat Ltd Platypus Ltd 75% NCI 25% A: PARTIAL GOODWILL METHOD Acquisition analysis At 1 July 2005: Net fair value of identifiable assets and liabilities of Wombat Ltd Net fair value acquired Consideration transferred Goodwill = = = = = = ($20 000 + $2 000 + $10 000) (equity) + $10 000 (1 – 30%)(machinery) + $4 000 (1 – 30%) (inventory) - $2 000 (1 – 30%) (receivables) $40 400 75% x $40 400 $30 300
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1. The dividend discount model (DDM) is a procedure for valuing the price of a stock by using predicted dividends and discounting them back to present value; if the value obtained from the DDM is higher than what the shares are currently trading at‚ the stock is undervalued and vice versa. According to the DDM the price of the stock is Po= Div1/ (r-g) where Po= is the price of shares‚ Div1=Dividend next year‚ r= required rate of return‚ g=growth rate Question 4 The pattern of past and future
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BBA 2yr (2010-2013) INDEX 1) Introduction 2) Capital Structure 3) Capital Asset Pricing Model (CAPM) 4) Weighted Asset Cost of Capital (WACC) 5) Dividend Policy 6) CAPM and Intrinsic Share Value 7) Event Analysis 8) Reference Introduction to L&T Larsen and Toubro‚ also known as the
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We report some considerations done in PV20003. We start translating this corollary in concrete: if the firm pays dividends‚ its market value of equity presents a dividend-related term less sensitive to ρ ̄. Then‚ the sensitivity of the market value to ρ ̄ is higher when the market value depends only on the terminal value BT and the dividends are not paid. This higher sensitivity implies then higher return volatility. According to the numerical analysis presented in PV2003‚ the volatility is al- most
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SHARE | | | | | | | | | EPS= | NET INCOME - PREFERRED DIVIDENDS | | | | AVE. NO. OF COMMON SHARES OUTSTANDING | | | | | | | | | NET INCOME | OUTSTANDING SHARES | | | 3‚637‚297‚943 | 2010 | 1‚053‚438‚818 | | | | 2009 | 1‚051‚458‚156 | | | | | | | EPS= | 3‚637‚297‚943 | | | | (1‚053‚438‚818 + 1‚051‚458‚156)/2 | | | | | EPS is computed because earnings form the basis for dividend payments and future increases in value of shares | | | EPS=
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bottling companies whenever the firms had trouble financing their businesses. Between 1981 and 1998‚ Coca Cola’s dividends as well as their earnings per share increased significantly each year. This trend is predicted to continue through 1998. In order to closely analyze and predict Coca Cola’s standing in the stock market within the next five to ten years‚ we looked at the Dividend Discount Model (DDM)‚ the Capital Asset Pricing Model (CAPM) and the Price/Earnings Multiple. Based on these three
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purchases x 365 3. Asset turnover ratio = (Sales / average Total Assets) x 100 4. Asset turnover period = (Average total assets / Sales) x 365 5. Return on Equity (Return on Shareholder’s’ Funds) = Net Profit after Tax and preference dividends / Average ordinary share capital + Reserves x 100 6. Gross Profit margin (ratio) = (Gross Profit / Sales) x 100 7. Net Profit margin (ratio) = Net Profit before Interest and Tax / Sales x 100 8. Current ratio = Current Assets / Current
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have a current market value of $1‚128 and will mature in 10 years. The firm’s marginal tax rate is 34%. b. A new common stock issue that paid a $1.81 dividend last year. The firm’s dividends are expected to continue to grow at 7.2% per year forever. The price of the firm’s common stock is now $27.28 c. A preferred stock paying a 8.5% dividend on a $138 par value. d. A bond selling to yield 11.7% where the firm’s tax rate is 34%. 4. Your firm is considering a new investment proposal and
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Master of Business Administration- Semester 2 MB0045-FINANCIAL MANAGEMENT (4 credits) (Book ID: B1628) ASSIGNMENT- Set 1 ___________________________________________________________________ Q1. What are the goals of financial management? Ans. Goal of financial management Financial management means maximization of economic welfare of its shareholders. Maximization of economic welfare means maximization of wealth of its shareholder’s wealth maximizations reflected in the market value of the firm’s
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elsewhere on the Internet. Use this information to answer the following questions. If researching online‚ go to the Colgate company website (http://www.colgate.com). Use the ratios discussed in Chapter 11 (dividend payout ratio and return on common stockholders’ equity) to evaluate Colgate’s dividend and earnings performance from a stockholder’s perspective. Your answer should illustrate
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