KENNECOTT COPPER CORPORATION CASE REPORT 1. Analyze the economic rationale of the Carborundum acquisition. Under what conditions an acquisition would be expected to add to shareholder value in general? Do any of these reasons apply to Carborundum acquisition? Prior to the consideration of Carborundum as an acquisition target‚ Kennecott‚ a copper company‚ pursued an acquisition of Peabody‚ a coal company‚ for $285 million in cash in 1968. There are two main rationales behind the acquisition of
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Marriot Case Brief 1. What is the weighted Average Cost of Capital for Marriot Corporation? WACC for Marriott Corp is 11.89 WACC of divisions: Lodging 10.29‚ Restaurant 13.49‚ Contract Services 13.615 a) What risk-free rate and the risk premium did you use to calculate the cost of equity? We used 8.95% as the risk free rate (LT Government Debt) and the MRP we used was 7.43%‚ which means are expected market return is 8.95+7.43=16.38% b) How did you measure Marriott’s cost of debt? We added
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CGA-CANADA ADVANCED CORPORATE FINANCE [FN2] EXAMINATION June 2011 Marks Notes: 1. Questions 1 and 2 are multiple choice. For these questions‚ select the best answer for each of the unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example‚ if the best answer for item (a) is (1)‚ write (a)(1) in your examination booklet. If more than one answer is given for an item‚ that item will not be marked. Incorrect answers will be marked as zero
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Flash memory Flash memory was founded in late 1990s. The small firm specialized in designing and manufacturing solid state drives and memory modules. Given the facts that products had short life cycles‚ and technologies changed frequently in the market‚ the competition was intensive in the industry and product profit margin was low. In order to stay ahead of competition‚ Flash memory needed to highly invest in R&D to create cutting-edge products so that customer’s wants and needs could be met.
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Introduction: 1) This report considers the potential purchase of the sodium chlorate producing plant in Collinsville‚ Alabama by Dixon Corporation from American Chemical Corporation in October 1979. The reason for this stems from the fact that American Chemical Corporation was attempting at the time to buy a controlling stake in Universal Paper Corporation‚ but the management of Universal contested this on the basis that it would be anti-competitive‚ given that they were both producers of sodium
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IMBA -FIN 6425 – Quiz 1 Corporate Finance - Solution– Nimalendran This is an individual quiz and you should submit the answers on-line by the scheduled date. You are allowed to use any resources EXCEPT help from any other person. You are allowed to use EXCEL for the calculations. 1. Barkley Credit Union sets a low annual percentage rate (5%) for all its credit card customers instead of basing the interest rates on the customers’ credit scores. Consequently Barkley is exposed to ______________
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New York ‚ USA: MacGraw Hill/Irwin. • Ross‚ S.‚ Westerfield‚ R. & Jaffe‚ J. 2010‚ Corporate Finance‚ 9th ed. New York ‚ USA: MacGraw Hill/Irwin • Yahoo Finance‚ http://au.finance.yahoo.com/q/apr?s=BBG.AX Re = Rf + ((RM-Rf) Terminal Value equals Unlevered Cash Flow (UCF 2014) times (1 + Growth Rate) divided by WACC minus Growth Rate
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ADM 3350N‚ Winter 2013 Prof. Yuri Khoroshilov Midterm exam IMPORTANT: Please‚ show your work for all questions (excluding multiple-choice questions) Please‚ keep at least 4 decimal points while performing your calculations. Marks will be deducted for rough rounding!!! The exam consists of two parts and one bonus question and is counted out of 40 points. In case your total mark (including the bonus question) exceeds 40 points‚ you will be awarded only 40 points for this exam and no extra
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10%‚ 12%‚ 20%. a. Calculate the expected return for Stock B and the market portfolio. b. Calculate the variance in the market. c. Calculate the covariance of returns between Stock B and the market portfolio. d. Calculate the beta for Stock B. e. If the risk-free rate is 4%‚ calculate the market risk premium. f. Calculate the required rate of return (cost of equity) for Stock B using CAPM. 5. If a firm borrows $25 million for one year at an interest rate
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Msc in Economics and Business Administration Master Thesis MSc in Finance Valuation of Pfizer Inc. and analysis of new drug development project using a real option approach. Author: Valdis Cvetkovs Supervisor: Peter Lochte Jorgensen April 2011 Aarhus Abstract This thesis investigates the world’s largest pharmaceutical company Pfizer Inc. from strategic and financial viewpoint in order to determine companies’ fair market value. The external analysis researches industry and global economic situation
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