1) Organizations do not operate in a vacuum and are subject to governmental regulation. This is particularly true with publicly traded organizations. Based on business here in the United States - who can name a few regulatory bodies that directly relate to financial management?
2) What exactly is risk aversion and can it relate to cultural differences? Even if you have never been overseas - can you give an example of this here in the United States?
3) I believe that we all know what currency is - think about having a United States dollar in hand. From a financial management standpoint, why is it important to understand currency fluctuations? What are some of the key factors that cause fluctuation?
In: Finance
1) Organizations do not operate in a vacuum and are subject to governmental regulation. This is particularly true with publicly traded organizations. Based on business here in the United States - who can name a few regulatory bodies that directly relate to financial management?
2) What exactly is risk aversion and can it relate to cultural differences? Even if you have never been overseas - can you give an example of this here in the United States?
3) I believe that we all know what currency is - think about having a United States dollar in hand. From a financial management standpoint, why is it important to understand currency fluctuations? What are some of the key factors that cause fluctuation?
In: Finance
3.14
The first application listed in Section 3.7 involved British insurance claims.
The 2005 median was £1570. A random sample of 14 claims from a large batch
Received in the first quarter of 2006 were for the following amounts (in £):
1175 1183 1327 1581 1592 1624 1777 1924 2483 2642 2713 3419 5350 7615
What test do you consider appropriate for a shift in median relative to the 2005 median. Would a one-tail test be appropriate? Obtain a 95 percent confidence interval for the median based upon these data. If all amounts were converted to, say, Burma or to $138, would your conclusions be the satire?
I NEED TO GET TO THIS ANSWER: TESTING Ho = 1570, TWO TAIL P= 0.570. ONE TAIL P= 0.0287. 94.3 PERCENT CONFIDENCE INTERVAL BASED ON SIGN TEST IS 1581. BUT THE EVIDENCE IS NOT STRONG THAT CHANGING CURRENCY WOULD ALTER THE CONCLUSION.
In: Statistics and Probability
Financial Exercise
Your task is to determine the WACC for a given firm using what you know about WACC as well as data you can find through research. Your deliverable is a brief report in which you state your determination of WACC, describe and justify how you determined the number, and provide relevant information as to the sources of your data.
Select a publicly traded company that has debt or bonds and common stock to calculate the current WACC. One good source for financial data for companies as well as data about their equity is Yahoo! Finance. By looking around this site, you should be able to find the market capitalization (E) as well as the β for any publicly traded company.
There are not many places left where data about corporate bonds is still available. One of them is the Finra Bonds website. To find data for a particular company’s bonds, find the Quick Search feature, then be sure to specify corporate bonds and type in the name of the issuing company. This should give you a list of all of the company’s outstanding bond issues. Clicking on the symbol for a given bond issue will lead you to the current amount outstanding and the yield to maturity. You are interested in both. The total of all bonds outstanding is D in the above formula.
If you like, you can use the YTM on a bond issue that is not callable as the pre-tax cost of debt for the company.
Assumptions:
As you recall, the formula for WACC is: rWACC = (E/E+D) rE + D/(E+D) rD (1-TC)
The formula for the required return on a given equity investment is: ri= rf + βi * (RMkt-rf)
RMkt-rf is the Market Risk Premium. For this project, you may assume the Market Risk Premium is 5% unless you can develop a better number.
rf is the risk free rate. The risk free rate is normally the yield on US Treasury securities such as a 10-year treasury. For this assignment, please use 3.5%.
You may assume a corporate tax rate of 40%.
Calculate the WACC, ri,
Submit a Microsoft® Excel® file showing your WACC calculations discussed above.
In: Finance
Although Financial Ratio Analysis has limitations, it is a great tool to find the problematic areas in the company so that managers can go back and address the problems. One of the limitations is differences in accounting standards around the world that can distort financial ratios.
Select two publicly traded US companies listed on the NASDAQ stock market and calculate each company’s P/E (Price to Earnings Ratio) and MB (Market to Book Ratio). What do these ratios tell you about how investors value these two companies’ future prospects?
In: Finance
Minor Project – Trend Analysis: Students will perform a financial trend analysis that is due in Week 5: For the Minor Project, each student will need to work on this independently and submit their work. Students should begin this project staring in Week 1.
In: Accounting
The New-York-based mutual fund Apex has invested in the Paris-traded Etablissements Michelin at the cost of € 74 per share. One year later Apex liquidates its investment selling Michelin stock at €81, having earned a dividend of € 2.40 per share. Over the investment period the euro declined by 2.7%. What was Apex total return from investing in Michelin stock
In: Finance
For the data below:
|
Year |
Automobile Sales |
Year |
Automobile Sales |
|
1990 |
116 |
1997 |
119 |
|
1991 |
105 |
1998 |
34 |
|
1992 |
29 |
1999 |
34 |
|
1993 |
59 |
2000 |
48 |
|
1994 |
108 |
2001 |
53 |
|
1995 |
94 |
2002 |
65 |
|
1996 |
27 |
2003 |
111 |
(a) Determine the least squares regression line using Excel.
(b) Determine the predicted value for 2004.
(c) Determine the 3 year moving average.
(d) Determine the MSE for the trend line (in a) and the 3 year moving average (in c.) Which forecasting method is better? Explain.
In: Statistics and Probability
The firm in above is considering a new project, which requires an initial investment in equipment of 90,000 and also an initial investment in working capital of 10,000 (at t = 0). You expect the project to produce sales revenue of 120,000 per year for three years. You estimate manufacturing costs at 60% of revenues. (Assume all revenues and costs occur at year‐end) The equipment fully depreciates using straight‐line depreciation over three years. At the end of the project, the firm can sell the equipment for 10,000 and also recover the investment in net working capital. a. Find the project’s payback period, IRR, NPV and profitability index. b. Should the company invest in the project? Explain. c. Does your decision in (b) depend on the way the project is financed? If so, how?
PS:I wrote the first question because the second question will be solved using the data from the first quesion. Sorry for posting 2 questions.
In: Accounting
In: Finance