Capital Structure Decisions: Which Factors Are Reliably Important? Murray Z. Frank and Vidhan K. Goyal∗ This paper examines the relative importance of many factors in the capital structure decisions of publicly traded American firms from 1950 to 2003. The most reliable factors for explaining market leverage are: median industry leverage (+ effect on leverage)‚ market-to-book assets ratio (−)‚ tangibility (+)‚ profits (−)‚ log of assets (+)‚ and expected inflation (+). In addition‚ we find
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Du Pont Case Study Capital Structure Statement of the Problem Determine a capital structure policy suitable for Du Pont in the 1980s and beyond. This paper will consider the history of the company and the turbulent times of the 1960s and 1970s‚ weigh the advantages and disadvantages associated with higher and lower levels of debt‚ and develop a strategy for the future after the merger with Conoco Inc. in 1983. Executive Summary Du Pont has been historically known for its
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Nike Inc.‚ Cost of Capital Dr. Romer Finance 3613 By: Joseph White Michael Parker NorthPoint a mutual-fund-management firm is contemplating adding Nike Inc. stocks to its Large-Cap Fund. Kimi Ford a portfolio manager for NorthPoint has developed a discounted-cash-flow forecast to help make the decision. Kimi comes to the conclusion that Nike is overvalued at its current price of $42.09 with a 12 percent cost of capital that she estimated. To determine if her estimation is correct about
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Application of Capital Structure‚ Costs of Capital for Multiple Division firms Case Analysis: Pioneer Petroleum Corporation (PPC).1 Submitted by: Joseph Donato N. Pangilinan‚ FICD Date Presented: April 12‚ 2012 Introduction: This landmark case seeks to break the risk-reward trade off involved in calculating Capital Cost. The object of the solution must be to minimize project risks while maximizing project opportunities available. We want a rate and a rating system that does not unnecessarily
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MM with capital structure In 1958‚ Modigliani and Merton Miller in their classical paper “The Cost of Capital‚ Corporation Finance and the Theory of Investment”‚ talked something about capital structure as follow: Consider any company j and let Xj stand as before for the expected return on the assets owned by the company (that is‚ its expected profit before deduction of interest). Denote by Di the market value of the debts of the company; by Sj the market value of its common shares; and by V j
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Nike was founded in 1964 as Blue Ribbon Sports by University of Oregon track athlete Philip Knight and his coach Bill Bowerman‚ and officially became Nike‚ Inc. in 1978. The company takes its name from Nike‚ the Greek goddess of victory‚ and adopted the well-known logo‚ called the “Swoosh”‚ first used by Nike in 1971. Nike produces a wide range of sports equipments. Their first products were track running shoes‚ for a wide range of sports including track & field‚ tennis‚ baseball‚ Association
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A Review of ‘Strategy as Stretch and Leverage’ – By Gary Hamel and C.K. Prahalad URN: 6029471 Word Count: 1647 A Review of ‘Strategy as Stretch and Leverage’ – By Gary Hamel and C.K. Prahalad This review will focus on the article ‘Strategy as Stretch and Leverage’ by Gary Hamel and C.K. Prahalad (1993). This review will identify the arguments made in the article and then place it within the context of one of the key debates in strategy academia. The review will then investigate the underlying
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OVERVIEW about the investment fund (8 slides) 1. The concept and function of investment funds (2 slides) 2. Classification of investment funds (3 slides) a. Based on the mobilization b. Based on the capital operating structure (Căn cứ vào cấu trúc vận động vốn) c. Based on the structure and operation of the fund (Căn cứ vào cơ cấu tổ chức và hoạt động của quỹ 3. Organizational model (vi du thôi‚ làm English nhé) (1 slides) 4. Performance Evaluation Standard of Investment Funds (2 slides)
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Nike Inc. Prepared by: Chuck Viasi MBA 330 - Innovation and Technology Management August 11‚ 2012 ------------------------------------------------- Executive Summary Nike‚ Inc. is a globally-recognized athletic sports apparel company with strong brand loyalty. The foundations of Nike’s success today were established by its Co-Founders Phil Knight and Bill Bowerman in 1972. As an athlete and a coach‚ their relentless pursuit of improved athletic performance instilled a competitive spirit
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To: Kim Ford Date: 2/13/13 Subject: Nike’s Cost of Capital I agree with Ms. Ford’s estimate of Nike’s Cost of Capital at 8.4% The WACC is the appropriate method for valuing Nike’s capital. The WACC takes your cost of debt x the percent of capital + CAPM x equity percent of capital and it tells the rate of return the company needs to return based on its capital structure. In my opinion Ms. Ford has correctly assumed Nikes cost of debt and cost of equity. Her projection for cost of debt uses
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