WACC is found to be 9.8%. Using this Nike is found to have very good returns on capital‚ with a reasonable amount of debt‚ at not too high of a cost. This WACC figure is higher than the one that Ford used‚ but it still shows us that the stock is undervalued‚ but by only about $15. This leads to a recommendation that Ford’s mutual fund should add Nike to its portfolio‚ and from the financial and debt ratios calculated‚ we get information that says Nike should continue to grow to higher stock prices
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Stand-Alone Value There are many valuation methods that could be used to evaluate this company. Finding a method that valuates the stand-alone value is difficult. The stand-alone value should be dependent upon the firm’s own assets and projected future income. We decided to evaluate this company based upon two methods: The Discounted Cash Flow Method and the Comparable Companies Method. Discounted Cash Flow Method takes the forecast free cash flows during forecasted horizon. Then we estimate
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Interpret Interco’s financial performance. Why is Interco the target of a hostile takeover? What are your interpretations of the Board of Directors in case Exhibit 1? As a member of Interco’s board are you persuaded by the premiums paid in case Exhibit 10 or the comparable transactions analysis in case Exhibit 11? Why? Apr. 27 Interco (C) continued: Compute the estimated value of Interco based on instructions in Exhibit 34. Use the 1988 sales data in Exhibits 8 as the foundation for the sales
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Case 5: Financing PPL Corp.’s Growth Strategy Study Questions 1. Evaluate PPL’s growth strategy and financing policies. Why is it important for PPL to seek out alternative financing strategies instead of using its own corporate balance sheet? In the early 1990’s‚ the anticipation of deregulation in the electricity marketplace led PPL to change its business strategy. It was essential for them to enter the market as soon as possible or they may have faced barriers to entry. In 1994‚ PPL established
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3rd Year Dissertation Is stock market performance linked to business performance? Abstract Still in the heart of an unprecedented financial crisis‚ new questions came up about the working of the stock market. In the eyes of general public the stock market can seem a lot like gambling to the extent that this one was reconsidered. The stock market index seems to be valuating at random‚ especially since the last financial crisis. But the fact that stock market plays an important role in the
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choosing to hire better-qualified candidates from outside the company for higher-level positions The management rarely communicates with lower-level employees. Staff meetings are held once a year and employees have reported feeling ‘ignored’ and ‘undervalued’ during these meetings There is a lack of team spirit. Some employees do not know the names of their colleagues Question Discuss changes you would make at ‘Talk Team UK’ in order to increase levels of job satisfaction at the company and motivate
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1. award: 0 out of 0.00 points On January 1‚ Puckett Company paid $2.64 million for 88‚000 shares of Harrison’s voting common stock‚ which represents a 40 percent investment. No allocation to goodwill or other specific account was made. Significant influence over Harrison is achieved by this acquisition and so Puckett applies the equity method. Harrison distributed a dividend of $2 per share during the year and reported net income of $613‚000. What is the balance in the Investment in Harrison
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The public only sees their grand moments. Unfortunately‚ many professionals in other fields‚ who make a much greater contribution to society‚ are paid so much less than entertainments. For instance‚ teachers‚ doctors and researchers are undervalued in terms of salary. It is unfair that they are paid less because they are more important to our well-being and our fortune than stars. In conclusion‚ I strongly believe that it is not unfair that the most popular stars earn a lot of money. At
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operators and material handlers. While their duties and responsibilities are defined‚ leadership for the team has been unintentionally assigned to the technicians on the team‚ causing the line operators and material handlers to feel that they are undervalued. According to the latter‚ this division comes from the tendency of the coordinators to defer to the technicians‚ and ignore the opinions of the line operators and material handlers. Because the potential advantages of the SDT model hinge on the
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ii) Ke=0.04+0.64*(0.05)=0.072 iii) Annualized dividend per share = 0.80 k=ROE=7.2% retention ratio =0.790576 g=ROE*bb=0.0569 Price=0.8*(1+0.0569)/(0.0720.0569)=56.076 Adjusted Closing share price for 2012 = 34.15 Thus the stock is undervalued. b) 105=6.95%/2*100*[11/(1+k)^12]/k+100/(1+k)^12 k=2.97% Thus‚ YTM=2.97%*2=5.94% c) Coupon rate= 5.94% Cost of equity ke= 0.072 Debt= 12‚095+1848 =13‚943 Equity= 24‚508 D/E=0.5689 D/V=0.3626‚ S/V=0.6374 Knewd = 0.0594(10.25)/0
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