to that part of profits of a company which is distributed by the company among its shareholders. It is the reward of the shareholders for investments made by them in the shares of the company. The investors are interested in earning the maximum return on their investments and to maximize their wealth. A company‚ on the other hand‚ needs to provide funds to finance its long-term growth. If a company pays out as dividend most of what it earns‚ then for business requirements and further expansion
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a constant expected rate of return no matter the level of risk presumed by the corporation. Therefore‚ the low-risk Telecommunication division seems to be less profitable than the high-risk S&P division. Using a single hurdle rate will cause majority of the funds to be allocated to the P&S segment because its returns are high compared to the assumed overall profitability of the Corporation while that of Telecommunications will be starved for resources‚ since its returns are lower. On the other end
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projects. The required rate of return is 14.6 percent for project A and 13.8 percent for project B. Which project should you accept and why? project A; because it has the higher required rate of return project A; because its NPV is about $4‚900 more than the NPV of project B X project B; because it has the largest total cash inflow project B; because it has the largest cash inflow in year one project B; because it has the lower required return 2. A project has average net
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FINA104 GROUP BUSINESS CASE PRESENTATION 1ST Semester‚ Academic Year 2013-2014 Adapted from FUNDAMENTALS OF FINANCIAL MANAGEMENT‚ Twelfth Edition‚ by Eugene F. Brigham and Joel F. Houston‚ South-Western Cengage Learning Risk and Return Case. Assume that you recently graduated with a major in finance. You just landed a job as a financial planner with Merrill Finch Inc.‚ a large financial services corporation. Your first assignment is to invest $100‚000 for a client. Because the funds are to
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Maeseneire September 2011 ABSTRACT This thesis empirically investigates the antecedents of abnormal return and operating performance improvement through mergers and acquisitions in Europe‚ the United Kingdom and North America. The study is an empirical study of M&As of listed acquirers and targets announced between 1985 and 1999. The transactions are analysed using event studies for abnormal return on the short and long terms (216 transactions) and operating performance (135 transactions). The event
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make; carColor = color; carLicense = license; } //This prints the information of the car. public String toString() { String carInfo; carInfo = "Car Make: "+carMake+"\nCar color: "+carColor+"\nLicense Number: "+carLicense+"\n"; return carInfo; } } ParkingMeter.java //Object representation of a parking meter. public class ParkingMeter { private int minutesPurchased; private int minutesPassed; private int minutesPassedExp; //Constructor for Parking Meter with
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market. As a result‚ EMH negates the use of technical analysis as a means to generate investment returns. With respect to fundamental analysis‚ the EMH also states that all publicly available information is reflected in security prices and as such‚ abnormal returns cannot be achievable through the use of this information. This negates the use of fundamental analysis as a means to generate investment returns. EMH and the Portfolio Management Process The portfolio management process begins with an
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CEO is to maximize shareholder value by accepting any project whose expected return on investment is greater than the cost of capital. Therefore‚ the main factors that Ameritrade management should consider are the expected return on investment for the project‚ and how this compares to the project’s cost of capital. Other factors that should also be considered include: how market swings will affect the expected return on investment‚ the project’s payback period (the project will require massive
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Pfizer Inc and Sanofi S.A. Analysis 2012 5/14/2012 Introduction This report pertains to the analysis of the companies Pfizer Inc and Sanofi S.A. Pfizer Inc is a major player in the global pharmaceutical industry and is driven by the vision of improving the life and health of the consumers through innovative discoveries and solutions. The company is diversified geographically and the global healthcare portfolio comprises of human as well as animal biologic & vaccines and small molecule
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Diversification and Returns Firms have numerous reasons to diversify internationally.134 International diversification is a strategy through which a firm expands the sales of its goods or services across the borders of global regions and countries into different geographic locations or markets. Because of its potential advantages‚ international diversification should be related positively to firms’ returns. Research has shown that‚ as international diversification increases‚ firms’ returns decrease initially
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