First Name: ID Number: COURSE FINANCE NUMBER COMM 308 SECTIONS: ( Circle your section) AA‚ AB DATE EXAMINATION June 18‚ 2012 Final Exam VERSION BLUE INSTRUCTOR: ( Underline your instructor’s name) Rahul Ravi Jay Mannadiar # OF PAGES 17 TIME Including cover 3 hours 19:00 to 22:00 DIVISION John Molson School of Business Concordia University READ THESE SPECIAL INSTRUCTIONS CAREFULLY ‐ You must submit a BLUE computer answer sheet. ‐ You are allowed to bring/use one or more calculators
Premium Rate of return Net present value Time value of money
| | | | | Total Capital employed | 41209.34 | | | 20.68206076 | THE GORDON GROWTH MODEL The Gordon growth model‚ developed by Gordon and Shapiro‚ assumes that dividends grow indefinitely at a constant rate. Here‚ Vo = Value of the share r = Required rate of Return g = Dividend growth rate For our calculation we have taken‚ * Required Rate of return as Cost of Capital * Dividend growth rate as CAGR of last 8 yrs dividend rate * CAGR of Dividend (last
Premium Time value of money P/E ratio Dividend
advertising campaign that promises to yield $120 one year from now for $100 spent now. Explain why the firm should not undertake the advertising campaign. Because of the Time Value of Money; the $120 might have a Present Value that is lower than the $100 spent now‚ therefore the campaign would have a negative Net Present Value and should not be undertaken. 5.) Determine which of two investment projects a manager should choose if the discount rate of the firm is 10 percent. The first project promises
Premium Net present value Time value of money Rate of return
improvements‚ and modest market expansions. By doing so‚ the shareholders will retain their shares and not make them available to raiders like Carlo de Bendetti or the Flick brothers. Earnings per share‚ dividends‚ and shareholders’ equity (market value) will‚ therefore‚ become critically important in 1993. Earnings per share refers to the portion of a company’s profit allocated to each outstanding share of common stock and serves as an indicator of a company’s profitability. Dividends refer to
Premium Net present value Time value of money
DIVERSIFICATION AND FIRM PERFORMANCE: AN EMPIRICAL EVALUATION Anil M. Pandya and Narendar V. Rao Abstract Diversification is a strategic option that many managers use to improve their firms’ performance. This interdisciplinary research attempts to verify whether firm level diversification has any impact on performance. The study finds that on average‚ diversified firms show better performance compared to undiversified firms on both risk and return dimensions. It also tests the robustness of these
Premium Rate of return Financial ratios Cash flow
fixed and it remain constant example of this are rent and salaries. TIME VALUE OF MONEY It is the value of money in the future its either in the form of productive assets such as equipment or they place in their money in interest-bearing like savings. FUTURE VALUE The amount of the money should expect in the future. And it is all about the capital or principal and the interest of the money. PRESENT VALUE It is the present value of money for us to know how much we need today to purchase the certain
Premium Time Economics Time value of money
Amazon’s cash cycle so much shorter than that of competitor Barnes & Noble? How does this comparison affect financial management decisions of other retailers? The market value of Amazon is much higher than Barnes & Noble. They are also in better marketing position then Barnes and Noble. Barnes & Noble has been on the rocks for a long time and failed to make headway in international markets with their Nook ereaders. The best answer I can give is because Amazon is a much larger company with diversified
Premium Net present value Weighted average cost of capital Investment
Purpose Formula Basic Time Value Formulae Future Value of a Single Sum FV = PV ( 1 + i ) N Present Value of a Single Sum FV PV = -----------------( 1 + i)N Solve for N for a Single Sum FV ln ------PV N = --------------------ln ( 1 + i ) Solve for i for a Single Sum i = Present Value of an Ordinary Annuity 1 – 1 ⁄ ( 1 + i )N PV A = Pmt ----------------------------------i Future Value of an Ordinary Annuity ( 1 + i )N – 1 FV A = Pmt ---------------------------i Present Value of an Annuity Due
Premium Time value of money Net present value Investment
FINANCIAL PLANNING REPORT FOR MR.AJAY SHARMA Prepared By TABLE OF CONTENTS Contents: Page nos. Assumptions & Risk Profile -------------------------------------------------------------------------------------------------------------------------------------------3 Asset Allocation Bucket --------------------------------------------------------------------------------------------------------------------------------------------------4 Existing Investments Review ---------------------------
Premium Mutual fund Time value of money Investment
Sets Chapter 5 A1. (Bond valuation) A $1‚000 face value bond has a remaining maturity of 10 years and a required return of 9%. The bond’s coupon rate is 7.4%. What is the fair value of this bond? Calculating PV factor: i= required return = 9% = 0.09 n= 10 years Using Cash Flow of $1000 to calculate present value‚ Cash flow= $1000 PV factor = 1/(1+i)^n = 0.42241 PV = $1000*0.42241= 422.41 Using Coupon Rate to calculate present value of Annuity Cash flow= $1000 * 7.4/100 = $74 PV factor
Premium Bond Stock market Preferred stock