if debt carries no market risk 1.5 Cost of Debt rD = rf + Credit Spread 1.6 Cost of Equity CAPM: rE = rf + βE(rm-rf) 1.7 Cost of Capital (WACC) • Capital structure components should be measured on a market value basis‚ not a book value or historic basis • Use a target capital structure rather than the current or historic capital structure • T always means the incremental tax-rate • Debt includes long-term debt‚ financing leases‚ short-term debt‚ operating
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Week 2 Sources of Finance 1) Introduction It was explained in week 1 that this week’s lectures will focus primarily on institutions that provide finance. Finance has been defined by Chadwick and Kirkby (1995‚ p 38) in their book Financial Management (first edition‚ publisher Routledge) as a “system of costs and risks”. As we will see throughout the course‚ the notion of risk from an investor’s point of view is related to whether there is the accrual of the financial returns that are anticipated
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building site and building a new building on the property. The projected cost for the new building is $14 million‚ according to the vice president of marketing. The problem with the vice president’s proposal is that he does not take into account time value of money. The Executive Vice President has an argument for the vice president of marketing‚ stating that Guardian Insurance is willing to purchase the building site‚ construct the building‚ and install all fixtures to Wyndham Store’s specifications
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Your test grade is 92 percent | The professor has configured this test to allow students to review: * Questions answered incorrectly. * Questions answered correctly. * Students answers. * Correct answers. Question 1 - Multiple Choice ID: 5129112 | Correct | | Question: The most commonly quoted interest rate for Eurodollar overnight lending is known as | | | | FIBOR | | LIBOR | | PIBOR | | None of the above | | | Question 2 - Multiple Choice ID:
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Although the stock and bond accounts have different interest rates‚ we can draw one time line‚ but we need to remember to apply different interest rates. The time line is: 0 1 Stock Bond $800 $350 360 361 ... 660 … $800 $350 $800 $350 $800 $350 $800 $350 C C C We need to find the annuity payment in retirement. Our retirement savings ends at the same time the retirement withdrawals begin‚ so the PV of the retirement withdrawals will be the
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individual is‚ the more time there is for the (hopefully) increased salary to offset the cost of the decision to return to school for a MBA. The cost includes both the explicit costs such as tuition‚ as well as the opportunity cost of the lost salary. 2. Perhaps the most important non quantifiable factors would be whether or not he is married and if he has any children. With a spouse and/or children‚ he may be less inclined to return for an MBA (especially full-time) since his family may
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signing a contract with a reported value of $50 million. Not bad‚ especially for someone who makes a living using the “tools of ignorance” (jock jargon for a catcher’s equipment). Another example is the contract signed by Jayson Werth of the Washington Nationals‚ which had a stated value of $126 million. It looks like Victor and Jayson did pretty well‚ but then there was Carl Crawford‚ who signed to play in front of Boston’s Red Sox nation. Carl’s contract has a stated value of $142 million‚ but this amount
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Management 5e Principles & Practices By Timothy Gallagher Colorado State University 3 things about Gallagher 5e 1. Complete coverage of recent financial crises\great recession 2. Review of systematic risk and “too big to fail” concepts 3. Best value proposition on the market (see quote on backside) 3 things about Textbook Media Press* 1. Proven content from trusted authors since 2004 2. Unique student options (online; desktop-PDF; paperback; iPhone) 3. Uniquely affordable prices For Instructors
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ACC4053 | Financial Analysis CONTENTS 1. Introduction 2. Valuation of the Company 2.1 An evaluation of BAE Systems’ current position and its future prospects 2.2 Assessment of the value of BAE Systems based on the application of suitable cash flow based valuation techniques 2.3 Assessment of the value of BAE Systems based on the application of suitable accounting based valuation techniques 3. Comparison of the valuation with the ‘market’ valuation 4. Appendices 4.1 Appendix 1: PEST
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Semiannually Twice per year Quarterly Four times per year Monthly Twelve times per year Weekly Fifty two times per year Daily 365 (360 by banks) per year COMPOUND INTEREST FORMULA The amount A after t years due to a principal P invested at an annual interest rate r compounded n times per year is r A P 1 n nt A is commonly referred to as the accumulated value or future value of the account. P is called the present value. COMPOUND INTEREST Example: Investing $1000
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