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. Why is corporate finance important to all managers? Corporate finance is important to all mangers because it lets them know the company’s financial situation before any decisions can be made within the organization. It helps managers develop strategic financial issues associated with achieving goals. Having a solid understanding of corporate finance helps mangers find ways to raise and manage its capital‚ which type of investments the firm should make‚ if profits are earned‚ how these profits
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Chapter 24 Completing the Audit Review Questions There are four presentation and disclosure-related audit objectives: 24-1 PRESENTATION AND DISCLOSURE-RELATED AUDIT OBJECTIVES Occurrence and rights and obligations Completeness Accuracy and valuation Classification and understandability DESCRIPTION Account-related information as described in the footnotes exists and represents the rights and obligations of the company. All required disclosures are included in the financial statement
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COMPREHENSIVE CASE SOLUTIONS – CHAPTERS 12 - 21 NOTE: The cases related to these solutions are posted on our website www.mcgrawhill.ca/olc/buckwold. They are not printed in the text. Solution to COMPREHENSIVE CASE ONE Seacourt Restaurants All of the issues in this case have been examined in depth in problems and cases of previous chapters and therefore the following solution briefly refers to the main issues of each segment. Where applicable‚ tax rates are assumed to be: Individual Corporation
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Chapter 4 Receivables and Related Revenues MULTIPLE CHOICE – THEORY 1. D 6. D 2. C 7. B 3. C 8. B 4. B 9. A Problem 1 (Fontana Blue) a. Cost of Sales Inventory 20‚000 b. Cost of Sales Inventory 18‚000 18‚000 c. No adjustment d. Sales 20‚000 40‚000 Accounts Receivable e. 40‚000 Sales 60‚000 Accounts Receivable 60‚000 Inventory 33‚600 Cost of Sales f. 33‚600 Sales 120‚000 Accounts Receivable g. 120‚000
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CHAPTER 17 SPONTANEITY‚ ENTROPY‚ AND FREE ENERGY Questions 11. Living organisms need an external source of energy to carry out these processes. Green plants use the energy from sunlight to produce glucose from carbon dioxide and water by photosynthesis. In the human body‚ the energy released from the metabolism of glucose helps drive the synthesis of proteins. For all processes combined‚ ∆Suniv must be greater than zero (the second law). 12. Dispersion increases the entropy of the universe because
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To what extent does a mature and cyclical product market drive corporate restructuring? Use an extended example to discuss whether restructuring transforms market and financial performance. An organization which is operating in a mature market means that the product does not have the scope to grow anymore. The product has reached its peak‚ with no prospects to increase‚ as the product is has become most popular in the market and no one else will be willing to buy it. A cyclical market is one which
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understanding of Finance function of a corporation and build capacity to apply theory in real world situations. The course will present the ‘Big Picture’ of Corporate Finance so that students understand how things fit together. After successfully completing the course‚ students should be able to take optimal decisions in a corporate setting‚ when working as professionals in the field. COURSE OUTLINE Introduction to Corporate Finance: Financial Management; Corporate Finance; Corporate Finance vs. Financial
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MAF302 Corporate Finance Study Guide Important Instruction This study guide provides you of an overview for each of the topic taught in this unit. These overviews however are not sufficient to learn all the materials in each of the topic. I therefore would suggest you to follow the materials in lecture notes and workshops. It is also essential to read and consult the corresponding text book chapters to develop your concept and knowledge in this unit. You will also find some references
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CORPORATE FINANCE Formative Assessment Some reading: Adams‚ R. B.‚ Hermalin‚ B. E.‚ and Weisbach M. S. (2010) The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey‚ Journal of Economic Literature‚ Vol 48‚ No.1‚ pp. 58–107. Aggarwal‚ R. et al (2009) Differences in governance practices between US and foreign firms: measurement‚ causes and consequences‚ Review of Financial Studies‚ Vol. Bhagat‚ S.‚ and Bolton B. (2008) Corporate Governance and Firm
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