shareholders would not be better off in terms of investing in this company due to low return on capital for that year. For shareholders to actually benefit from this‚ earning a higher return would allow them to invest on their own in financial markets. Shareholders want the companies to invest only in projects for which the return on capital is at least as great as the cost of capital. 2. What questions do the financial ratios suggest that Ms. Platt and Mr. Green need to address during their meeting
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Assignment in COM3 Submission deadline: 15.02‚ 2013 by 16:00 hours IMPORTANT !!! Please read the following case and do additional research as required to answer the questions bellow. Make sure to use theories from the course and give adequate examples where appropriate. Make sure your answers are elaborated accordingly and do not give short answers. Explain exactly what the case is asking you‚ and make sure that there is NO Plagiarism. (minimum 4 pages). Intake 09/2012- EAM > North/South>COM3>CA
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Chapter I THE PROBLEM AND ITS BACKGROUND This chapter presents the problem and its background. Introduction Fast food industry has been in existence for the past years. The growing popularity of the industry gave way for many businessmen to put up many branches or chains in different parts of the country. This leads to birth of fast food chains‚ by which Jollibee‚ McDonalds‚ KFC‚ Mang Inasal‚ Chowking‚ and WOK Express and Greenwich are few examples. People prefer to go into fast food chains
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CHAPTER 1: INTRODUCTION 1.1 Introduction Financial services firms are in the business of accepting risk. Primary aims of any financial services firm are collect and manage risks on behalf of their customers and make a profit for its shareholders. We may define ‘Risks’ as uncertainties resulting in adverse outcome‚ adverse in relation to planned objective or expectations. In the financial arena‚ enterprise risks can be broadly categorized as credit risk‚ operational risk‚ market risk and
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Chapter 4 29. Annuity Present Values What is the value today of a 15-year annuity that pays $500 a year?The annuity’s first payment occurs at the end of year 6. The annual interest rate is 12 percentfor years 1 through 5‚ and 15 percent thereafter. (Ross‚ Stephen A.. Corporate Finance‚ 8th Edition. Irwin/McGraw-Hill‚ 112006. 4.8). 33. Growing Annuity Southern California Publishing Company is trying to decide whether to revise its popular textbook‚ Financial Psychoanalysis Made Simple. The company
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will require an increase in various net working capital accounts. It is estimated that the Sisyphean Corporation needs to hold 2% of its annual sales in cash‚ 4% of its annual sales in accounts receivable‚ 9% of its annual sales in inventory‚ and 5% of its annual sales in accounts payable. The firm is in the 35% tax bracket‚ and has a cost of capital of 10%. Calculate the total Free Cash Flows for each of the three years for the Sisyphean Corporation’s new project. I ncremental Earnings
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SCHOOL OF ECONOMICS‚ FINANCE & MARKETING CORPORATE FINANCE MID SEMESTER TEST FIRST SEMESTER 2008 – Part-time STUDENT DETAILS (Please Print Clearly) Family Name: ___________________________________________________________ First Name: _____________________________________________________________ Address: _______________________________________________________________ Tel. No: (BH) ___________________________________________________________ Student Number: _________________________________________________________
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Firm ABC has a cost of equity of 8%‚ a cost of debt of 5%. It stock is traded at $10/share‚ and has 10 million shares outstanding. Its debt value is $20 million. Tax rate is 40%. What is its after-tax WACC? Equity Value = 10*10=$100 million‚ Debt Value=$20 million So‚ equity weight = 100/120=83.3%‚ debt weight=20/120=16.7% After-tax WACC= equity weight * cost of equity + debt weight * effective cost of debt =83.3%*8%+16.7%*5%*(1-40%) = 7.2% 4. Suppose you are the founder of
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Shilpa Bank and Bangladesh Shilpa Rin Sangstha were exempted from maintaining SLR vide Ministry of Finance Notification. 4. Balance with Other Banks & Financial Institutions In Bangladesh Outside Bangladesh 4.1 In Bangladesh Current & Other Account: Current account Short Term Deposit Term Deposit Term Deposit -Depreciation Fund Term Deposit -Building Fund Term Deposit -Loan Redemption Fund 4.1.1 Term Deposit Janata Bank Ltd. Sonali Bank Ltd. National Bank of Pakistan AB Bank Ltd. United Commercial
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Fundamentals of Macroeconomics Paper ECO/372 Fundamentals of Macroeconomics Paper Some of the terms that are frequently used in economics are; gross domestic product (GDP)‚ real GDP‚ nominal GDP‚ unemployment rate‚ inflation rate‚ and interest rates. Gross domestic product is the money value of the nation’s productivity. GDP is the value of all finished goods and services produced within the country’s border. Real GDP is the market value of the final goods and services produced in a year
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