Calculate the stock price given the following :
Trading EBITDA Multiple= 10x
Book equity= $1.0 Billion
Shares Outstanding= 110 million
Short Term Bank debt= $100 Million
Long Term Bank debt= $1.15 billion
Corporate Bons- $250 Million
Total liabilities= $1.9 Billion
Total Assets= $2.9 Billion
Cash=$ 100 Million
EBIT= $300 Million
Depreciation & Amortization = $50 Million
Whats the stock price?
Calculate the EV with stock price at $25.
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Describe and explain the basic steps in a money laundering cycle.
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What is employee fraud and white-collar crime? Give definitions and specific examples of each.
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Mr Grants wishes to purchase an apartment in new Kasama, the high cost residential area of Lusaka. The apartment is situated in a tree lined avenue. the purchase price with costs is K710,000.00 and he is able to obtain a 100% loan at an interest rate of 6% compounded monthly . the term of the loan is 20 years. the central bank has released preliminary data that the property values are expected to rise at the rate of 9% per year (0.75% per month). Mr grant intends to rent out the property after costs at a rate of K4,000 per month for the first year. Interest and rent are payable at the beginning of each year
Required
a) What is the expected value of the apartment in 20 years time
b) What is the beginning mortgage loan repayment at the beginning of each month
c) what is the next amount that Mr Grant has to pay in each month
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b) There has been considerable growth in recent years in the use of economic analysis in investment management. Further significant expansion may lie ahead as financial analysts develop greater skills in economic analysis and these analyses are integrated more into the investment decision-making process. The following questions address the use of economic analysis in the investment decision-making process: (1) Differentiate among leading, lagging, and coincident indicators of economic activity, and give an example of each based on the part a). (2) Indicate whether the leading indicators are useful for achieving above-average investment results in automobile Industry. Justify your conclusion.
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As an investor, do you think the "buy low" mindset applies to Brazil? If not, what changes would you like to see before making any investments in the country?
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The Board of Directors of Samsung has decided to raise funds through the capital market in order to finance the international expansion business plan. State two (2) advantages and (2) disadvantages of raising funds from the capital market as compared to raising funds from the money market.
Running a business as a non-listed company is different than running a business as a listed company. One of the issues that you now have to deal with as a listed company is the ‘agency problem’. Describe how the agency problem occurs and two (2) possible solutions to it.
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Identify three significant reasons why interest rate forecasts may be important in reaching investment conclusions in automobile industry in Malaysia.
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Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 27 percent for the next 3 years, with the growth rate falling off to a constant 6 percent thereafter.
If the required return is 14 percent and the company just paid a $1.50 dividend. what is the current share price?
$33.75
$31.01
$32.42
$33.09
$29.71
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Burnett Corp. pays a constant $20 dividend on its stock. The
company will maintain this dividend for the next 12 years and will
then cease paying dividends forever.If the required return on this
stock is 6 percent, what is the current share price?
$167.68
$177.74
$164.32
$240.00
$176.06
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Darla purchased a new car during a special sales promotion by the manufacturer. She secured a loan from the manufacturer in the amount of $23,000 at a rate of 7%/year compounded monthly. Her bank is now charging 11.3%/year compounded monthly for new car loans. Assuming that each loan would be amortized by 36 equal monthly installments, determine the amount of interest she would have paid at the end of 3 yr for each loan. How much less will she have paid in interest payments over the life of the loan by borrowing from the manufacturer instead of her bank? (Round your answers to the nearest cent.)
| interest paid to manufacturer | $ |
| interest paid to bank | $ |
| savings | $ |
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The Sandersons are planning to refinance their home. The outstanding principal on their original loan is $100,000 and was to amortized in 240 equal monthly installments at an interest rate of 11%/year compounded monthly. The new loan they expect to secure is to be amortized over the same period at an interest rate of 8%/year compounded monthly. How much less can they expect to pay over the life of the loan in interest payments by refinancing the loan at this time? (Round your answer to the nearest cent.)
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After extensive research and development, GoodStone Tires, Inc., has recently developed a new tire, the SuperTread, and must decide whether to make the investment necessary to produce and market it. The tire would be ideal for drivers doing a large amount of wet weather and off-road driving in addition to normal freeway usage. The research and development costs so far have totaled about $10 million.
The SuperTread would be put on the market beginning this year, and GoodStone expects it to stay on the market for a total of four years. Test marketing costing $5 million has shown that there is a significant market for a SuperTread-type tire. As a financial analyst at GoodStone, you have been asked by your CFO, Adam Smith, to evaluate the SuperTread project and provide a recommendation on whether to go ahead with the investment.
Except for the initial investment that will occur immediately, assume all cash flows will occur at year-end.
GoodStone must initially invest $160 million in production equipment to make the SuperTread. This equipment can be sold for $65 million at the end of four years.
GoodStone intends to sell the SuperTread to two distinct markets:
1. The original equipment manufacturer (OEM) market: The OEM market consists primarily of the large automobile companies (like General Motors) that buy tires for new cars. In the OEM market, the SuperTread is expected to sell for $41 per tire. The variable cost to produce each tire is $29.
2. The replacement market: The replacement market consists of all tires purchased after the automobile has left the factory. This market allows higher margins; GoodStone expects to sell the SuperTread for $62 per tire there. Variable costs are the same as in the OEM market.
GoodStone Tires intends to raise prices at 1 percent above the inflation rate; variable costs will also increase at 1 percent above the inflation rate. In addition, the SuperTread project will incur $43 million in marketing and general administration costs the first year. This cost is expected to increase at the inflation rate in the subsequent years.
GoodStone’s corporate tax rate is 25% percent. Annual inflation is expected to remain constant at 2,5 percent. The company uses a 13.4 percent discount rate to evaluate new product decisions. Automotive industry analysts expect automobile manufacturers to produce 6.2 million new cars this year and production to grow at 2.5 percent per year thereafter. Each new car needs four tires (the spare tires are undersized and are in a different category). GoodStone Tires expects the SuperTread to capture 11 percent of the OEM market. Industry analysts estimate that the replacement tire market size will be 32 million tires this year and that it will grow at 2 percent annually. GoodStone expects the SuperTread to capture an 8 percent market share.
The annual depreciation is calculated based on the seven-year linear depreciation schedule. The immediate initial working capital requirement is $9 million. Thereafter, the net working capital requirements will be 15 percent of sales.
What are the NPV, payback period, discounted payback period, IRR, and PI on this project? Please prepare also sensitivity analysis assuming changes of the key figures which can affect the IRR of the project.
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DSW is a midsized coal mining company with 20 mines located in Hessen region in central Germany. The company operates deep mines as well as strip mines. Most of the coal mined is sold under contract, with excess production sold on the spot market.
The coal mining industry, especially high-sulfur coal operations such as DSW, has been hard-hit by environmental regulations and warmer than expected winter 2014/2015 and 2016/2017. Recently, however, a combination of increased demand for coal and new pollution reduction technologies has led to an improved market demand for high-sulfur coal. DSW has just been approached by SudenKraftwerk Company with a request to supply coal for its electric generators for the next four years. DSW does not have enough excess capacity at its existing mines to guarantee the contract. The company is considering opening a strip mine in Broken on 5,000 acres of land purchased 10 years ago for € 5 million. Based on a recent appraisal, the company feels it could receive € 6.2 million on an after-tax basis if it sold the land today.
Strip mining is a process where the layers of topsoil above a coal vein are removed and the exposed coal is removed. Changes in mining regulations now force a company to reclaim the land; that is, when the mining is completed, the land must be restored to near its original condition. The land can then be used for other purposes. Because it is currently operating at full capacity, DWS will need to purchase additional necessary equipment, which will cost € 78 million. The equipment will be depreciated on a seven-year linear basis. The contract runs for only four years. At that time the coal from the site will be entirely mined. The company feels that the equipment can be sold for 60 percent of its initial purchase price in four years. However, DSW plans to open another strip mine at that time and will use the equipment at the new mine.
The contract calls for the delivery of 500,000 tons of coal per year at a price of €85 per ton. DWS feels that coal production will be 620,000 tons, 680,000 tons, 730,000 tons, and 590,000 tons, respectively, over the next four years. The excess production will be sold in the spot market at an average of € 80 per ton but the spot prices are highly volatile. The fact should be taken into consideration in the analysis. Variable costs amount to € 27 per ton, and fixed costs are € 3,700,000 per year. The mine will require net working capital of 5 percent of sales. The NWC will be built up in the year prior to the sales.
DSW will be responsible for reclaiming the land at termination of the mining. This will occur in year 5. The company uses an outside company for reclamation of all the company’s strip mines. It is estimated the cost of reclamation will be € 2.4 million. After the land is reclaimed, the company plans to donate the land to the state for use as a public park and recreation area. This will occur in year 6 and result in a charitable expense deduction of € 6.5 million. DSW faces a 19 percent tax rate. Assume that a loss in any year will result in a tax credit.
You have been approached by the CFO of the company with a request to analyze the project.
Calculate the payback period, profitability index, net present value, internal rate of return for the new strip mine. Please prepare also sensitivity analysis for the project.
To calculate WACC of DSW assume that it is rather illiquid company with capitalization on the level of € 680 million, beta equals 1,25, outstanding interest bearing debt on the level of € 300 million and cash level of € 78 million.[1] The current EBIT of DSW amounts € 80 million and the gross financial costs equals € 28 million.
Should DSW Mining take the contract and open the mine taking into consideration the risk of the project?
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what are the main features of maslows hierarchy of needs and herzbergs motivation hygiene theories
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