ECN372 Corporate Finance 2‚ 2012/2013 Problem Set 5: Solutions 1. a) The face value of debt is given by: 0.5 × F + 0.5 × 40 = 60 ⇒ F = 80 The value of the firm is: V = 0.5 × 150 + 0.5 × 40 = 95 The value of equity is: E = 95 − 60 = 35 b) The value of debt: D = 0.5 × 50 + 0.5 × (20 − 10) = 30 The value of the firm is: V = 0.5 × 70 + 0.5 × (20 − 10) = 40 The value of equity is: E = 40 − 30 = 10 c) If the firms were to merge then: The value of debt: D = 0.5 × (80 + 50) + 0.5 × (40 + 70
Premium Harshad number
body of research that makes various contributions to business process modelling and business analysis. It focuses on the need for business analysts (BAs) in the organisation. A distinction between the role and responsibility of the BA is given. It presents an argument put forward that emphasises that BAs are responsible for aligning the business strategy to the organisations objectives and goals (Cadle et al‚ 2010:20). It provides various tools and techniques that are used to facilitate this process
Premium Business process modeling Management Strategic management
VALUATION TECHNIQUES Vault Guide to Finance Interviews Valuation Techniques How Much is it Worth? Imagine yourself as the CEO of a publicly traded company that makes widgets. You’ve had a highly successful business so far and want to sell the company to anyone interested in buying it. How do you know how much to sell it for? Likewise‚ consider the Bank of America acquisition of Fleet. How did B of A decide how much it should pay to buy Fleet? For starters‚ you should understand that the value
Premium Balance sheet Discounted cash flow Cash flow
Financial Statement Analysis and Business Valuation of TCS By: Prashant Chaudhary Table of Contents About TCS 3 Calculation of Beta 3 Cost of Capital 4 Concepts of Cost of Capital 4 Weighted Average Cost of Capital 6 Financial Ratios 8 Liquidity Ratios 8 Solvency Ratios 8 Profitability Ratios 9 Comparison with Competitors in the Industry 10 Free Cash Flow 11 Sales forecast 13 Reformulated balance sheet 14 Reformulated Income Statement 15 Appendix A: Balance
Premium Balance sheet Asset Generally Accepted Accounting Principles
Equity Valuation: Discounted Cash Flow and Residual Income Models Introduction Valuation plays a very important role when companies are trying to increase their value‚ raise money‚ acquire another firm or sell a subsidiary‚ also when a company decides to go public. Managers‚ investors and shareholders need to have the most accurate and reliable information in order to make decisions‚ that is why valuation is a fundamental exercise in corporate finance. It is pretty evident that whatever
Premium Generally Accepted Accounting Principles Discounted cash flow Cash flow
An Analysis of the Dick Spencer Case The career of Dick Spencer presented in the assigned case offers several opportunities for the business student to examine principles of management using a realistic example of the modern business environment. This paper undertakes to perform an analysis of Mr. Spencer’s career in order to identify and explore those factors that contributed to his early career success as a sales person as well as those factors that contributed to significant challenges experienced
Premium Management
Marketing Communications Marks & Spencer in UK & UAE Submitted By: Zhang Qang (MAIM FEB 2010) Student No: 109998494 Module Leader: Dixon Abstract An organisation needs an image‚ which projects itself as a responsible and trustworthy which is not only interest in making money but also places the interest of its customers as well. In this assignment we will review different aspects of Globally Integrated Marketing Strategy and our focused organisation will be Marks & Spencer. We will focus on
Premium Marketing
CASO MARKS AND SPENCER I. POSIBLES PROBLEMAS Dirección de la compañía por parte de familiares. Elevados gastos en servicios innecesarios para el personal. Ausencia de estudios de mercado que respalden la expansión internacional. Elevada participación en las operaciones de los proveedores. Poca inversión en publicidad y promociones. Excesivo paternalismo hacia sus empleados. Dificultad para contar con proveedores en nuevos mercados debido a los elevados estándares de calidad que exigía. II
Premium Empresa Homo sapiens Sociedad
Main Job Roles and Functions in M&S P1: Describe the main job roles and functions in an organisation of your choice In this report I will be talking about the main job roles that are in a business and the functions that are in organisation. I will be talking a sales assistant‚ floor manager‚ assistant manager‚ branch manager and director. This information will be used to describe the main job roles and the functions and the organisational structure that is within M&S. Directors: There are lots
Premium Board of directors Management Executive director
AFC 3230 – Financial Analysis and Valuation Lecture 1 – Introduction (6 marks – Theory) Investment Styles: Intuitive Investing * Investor who relies on intuition and hunches – there is no analysis involved Problems: * Self-deception‚ ignores ability to check intuition Passive Investing * Investor who accepts the market price as value – there is no analysis involved – this is the “efficient market approach” Problems: * It is risky that you may be paying too much for
Premium Stock market Stock Cost