CAPITAL MARKETS AND FINANCING SPR 13 | Group Assignment 1 | UST Case Study | 2/19/2013 | | | | Question 1: In order to calculate the impact of the leverage recapitalization on UST’s value‚ we used the WACC and APV methods to calculate its value before and after the recapitalization. WACC Method Using the WACC method‚ we first derived UST’s return on assets (rA). Since we are given the firm’s market capitalization‚ debt and cash‚ we calculated the current Enterprive Value
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CASE 14 NIKE‚ INC.: COST OF CAPITAL Cost of capital denotes the opportunity cost of using capital for a particular investment as oppose to the alternative investment which has similar systematic risk. It is extremely important since it is used in evaluating whether a project is feasible or not in the net present value (NPV) analysis‚ or in assessing the value of an asset. WACC (weighted average cost of capital) is the proportional average of each category of capital inside a firm (common
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11683/116820*100 = 10.0 HBO Movie 351/116820*100 = 0.3 4. Total GRPs in problem 2: 1.3*4+10.0*3+0.3*12= 38.8 GRP 5. A)Gross rating indicates the possibility of multiple ratings per target member‚ it’s always ratings or net ratings and it produces CPP (cost per point). Gross impressions indicates the possibility of multiple impressions per target member‚ it’s impressions and is used in CPM (cost per mile or cost per thousand). B) Her thought has a little bit mistakes. First of all‚ impression
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strategic benefit would have to be captured in the cash flows. Future cash flows are the statistical mean of random variables rather than the median or mode. The project is discrete and does not therefore have a terminal value whereas that would not be the case in valuing a going concern. Additionally‚ capital budgeting project in competitive markets cannot sustain positive economic rents indefinitely. (Your latest and greatest bank product will be imitated by your competitors in an
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Koito-Pickens-Toyota Case Question 1 The Japanese corporate governance system differs vastly from the US system. Discuss corporate governance issues that may arise under the Japanese keiretsu. The corporate governance system in Japan is widely different from the US one insofar as it mostly involves a unique business model called “Keiretsu”. A Keiretsu is a form of corporate structure that groups a set of companies with interlocking board of directors and common business interests. Thus‚ due
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Case note on Nike Cost of Capital Group 2 Members : Devendra Rane‚ Vivekkumar Nema‚ Chandrashekhar Joshi‚ G. Ajithkumar‚ Prakash Shetty Case Background: * NorthPoint Large Cap Fund weighing whether to buy Nike’s stock. * Nike has experienced sales growth decline‚ declines in profits and market share. * Nike has revealed that it would increase exposure in mid-price footwear and apparel lines. It also commits to cut down expenses. * Kimi Ford’s initial assessment at a discount rate
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MEMORANDUM DATE: TO: FROM: SUBJECT: Aquarius – Pub Valuation Overview The Greens are looking to sell Aquarius Ales‚ their pub located in Austin Texas as they are looking to fully retire and take up golfing and quilt making. Recently they have received their first offer to buy the business which was $450‚000 from Marc Johnston and John Sheridan‚ two University of Texas graduates who miss the college scene. The Greens are seriously considering the offer but feel that it
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Bancorp¶s estimates of the costs of debt and equity in case Exhibit 8‚which rating category has the lowest overall cost of funds? Do you agree with HudsonBancorp¶s view that equity investors are indifferent to the increases in financial risk acrossthe investment-grade debt categories?There is a general concept that higher rating category willhavethe lowest cost of debt. Butrating categories only give the information about the default risk and loss in case of companydefault. It does not guarantee the lowest
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Political Risk: 2. If Venerus implements the suggested methodology‚ what would be the range of discount rates that AES would use around the world? If Venerus and AES implement the suggested methodology‚ the projects would change while WACC changes. To find WACC we must first calculate the leveraged bets for each the US Red Oak and Lal Plr Pakistan projects‚ using the equation unleveled beta/(1-D/V). It is easy to find debt to capital ratios‚ which are 39.5% for U.S and 35.1% for Pakistan‚ and the
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Pepperdine University The George Graziadio School of Business and Management DUBOS J. MASSON FINC 624 BUSINESS VALUATION SUMMER II – 2015 Timken Co. Case Writeup Fatmah Alyami Wenting Yu Meshal Alyami Shengxu Li Tongkai Zhang Yuqing Zhang Timken Case WriteUp ● How does Torrington fit with The Timken Company? o What are the expected synergies? We believe that Torrington fits in with Timken Co. and this acquisition will generate positive operating synergies for Timken Co
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