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San Jose State | BUS 173A
Professors
- Vuorikoski, Professor,
- Fu, Jinyi
65 sample documents related to BUS 173A
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San Jose State BUS 173A
Click to edit Master subtitle style The urge to merge 9/8/10 I used to read the New York Times Wedding 9/8/10 What IS a Merger A \"combination of two or more commercial companies\" The phrase mer ger s and acquisitions (abbreviated M & A) refers to the as -
San Jose State BUS 173A
Mullet Technologies: Input data (in U.S. dollars) Existing bond issue original flotation cost maturity of original debt years since old issue call premium original coupon rate after-tax cost of new debt Schedule of Cash Flows: Investment Outlay Call premi -
San Jose State BUS 173A
Please use the DESIGNATED ANSWER SHEETS for your answers. They link to this summ Do NOT copy over or delete the grading area on top of the answer sheet. Be make sure to link your answers in a way that makes it easy to grade. Every question is ALL Calculat -
San Jose State BUS 173A
REVISED SEMESTER SCHEDULE Wk Date Topics (Some Classes May be in AIS Lab) 1 26-Aug Finance Fundamentals Review: Valuation Focus. Brigham Ch 7. Holden Ch 6, 8. 60 min Jeopardy Contest to Review 170 = 2 points: Financials, Performance Evaluation, TVM. Lectu -
San Jose State BUS 173A
Kouros Vala Bus173A Group Ahuja 1.) What is the difference between a stock\'s intrinsic value and a stock\'s market price? 2.) What is meant by an \"equilibrium\" market when referring to stock prices? 3.) Should a firm\'s manager\'s estimate its intrinsic valu -
San Jose State BUS 173A
173A Brigham 26 We valued the equity before. why a different method? Value of operations (from Day 7) considers cash flows to ALL capital and is also known as Free Cash Flow to Firm (FCFF) Free Cash Flow to Equity (FCFE) considers cash flows to equity ho -
San Jose State BUS 173A
BUS173a A. Vuorikoski-Bullis 7-7: Year 0 1 2 3 4 5 Required Rate of Return= 14% X -1065000 350,000 350,000 350,000 350,000 350,000 7-8: Expected Net Cash Flows Year 0 1 2 3 4 5 6 7 Project A -300 -387 -193 -100 600 600 850 -180 Project B -405 134 134 134 -
San Jose State BUS 173A
NPV USING GENERAL DISCOUNTING (in thousands of $) 0 Nominal and Real Rates NPV Using General Discounting $30.00 ($20.00) ($70.00) ($120.00) 0 1 2 Period Inputs Period Inflation Rate Real Discount Rate Outputs Period Nominal Discount Rate 0 0 1 3.0% 4.854% -
San Jose State BUS 173A
ANNUITY Inputs Payment Discount Rate / Period Number of Periods Present Value Present Value and System of Four Annuity Variables $80.00 6.0% 5 $336.99 8 6 5 6 Annuity $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 0 1 2 Period 3 4 5 Cash Flows -
San Jose State BUS 173A
PV=C/(1+r)^n FVn=PV(1+r)^n Find C C=(1/r)(1-1/1+r^n) C=P/Ans Real Interest Rr= r-i/1+i=r-I Mortgage Payoff PV=C/r(1-1/1+r)^n Balloon Payment X=(P-C/r(1-1/1+r^n)(1+r)^n Delayed Inv. (Bill Clinton) npv=C0-C1/1+r^n(1-1/1+r^n) Growing Annuity PV=(C/r-g)(1-(1+ -
San Jose State BUS 173A
Ghapter 4 No.8 a. Timeline: r8 0 l9 I 20 23 21 3,996 rtlT19 t2 20 21 J FV = 3,996(1.08)7 = 6,848.44 b. Timeline: l8 0 3,996 tttt FV = 3,996(1.08)47 =748,779 c. Timeline: 0r No. l0 I,000 1,000 r,000 First, calculate the present value of the cash flows: PV -
San Jose State BUS 173A
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San Jose State BUS 173A
A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 B C D E F G H I J BOND VALUATION Inputs Number of Periods to Maturity (T) Face Value (PAR) Discount Rate / Period (r) Coupon Payment (PMT) Bond Price using a Timeline Period C -
San Jose State BUS 173A
STOCK VALUATION Inputs Levered Cost of Equity Capital 12.0% Dividend Discount Model 24 Dividend Discount Model Year Dividend Growth Rate Dividend Continuation Value Dividend + Continuation Value PV of Dividend + Contin. Value Stock Value 0 $6.64 1 12.0% $ -
San Jose State BUS 173A
- L5[No 2PrNCrLoNrtl L TO USE SUBJECTIVE SCOBE FEATURE: SCANTRON\'\" ^ FOFIM NO. 882-F FOR USE ON TEST SCORING MACHINE ONLY -*:sgl*x3iL,_jY:,\' c F tr . MAKE DARK MARKS . ERASE COMPLETELY TO CHANGE . Mark total possible subiective points . Only one mark per -
San Jose State BUS 173A
T <:i r TE ustNo.2r,r,NCrr ()NrY! L . TO USE SUBJECTIVE SCOBE FEATUBE: fcnNTnoN ^ FORM NO Bot tr FOR USE ON TEST SCORING MACHINE ONLY REORDER ONLINE www.scantronf orms.com lt r . MAKE DARK MARKS . ERASE COMPLETELY TO CHANGE . Mark total possible subiectav -
San Jose State BUS 173A
LOAN AMORTIZATION Inputs Present value Interest rate / year Number of years $300,000 8.00% 30 Basics and Sensitivity Analysis Loan Amortization 30 8 30 $50,000 $40,000 $30,000 $20,000 $10,000 $0 0 5 $291,403 $26,648 $23,312 $3,336 10 Year 15 20 $284,464 $ -
San Jose State BUS 173A
Capital budgeting - NPV Free cash flow formula FCF = EBIT(1-T) + Depreciation Gross fixed asset expenditures (operating current assets operating current liabilities) NPV = CF0+NPV(r,CF1:CF4) IRR = IRR(CF1:CF4) PI = PV of future CF/initial cost Discount = -
San Jose State BUS 173A
Please use the DESIGNATED ANSWER SHEETS for your answers. They link to this summ Do NOT copy over or delete the grading area on top of the answer sheet. Be make sure to link your answers in a way that makes it easy to grade. Every question is ALL Calculat -
San Jose State BUS 173A
1 G 2 3 Cash flows 4 NPV 5 6 PV 7 NPV 0 100 (53.23) (100.0) (53.2) H 1 20 (18.2) I 2 10 J 3 30 K 4 50 =NPV(10%,H3:K3)+G3 8.3 22.5 34.2 Calculated PV of each CF = CF/1.1^period SUM -
San Jose State BUS 173A
Coc NPV 5% $584.09 IRR 19% Payback 4.63 0 375 375 1 300 675 2 200 875 3 100 975 4 600 375 5 600 225 6 926 1151 Coc NPV 5% $389.38 IRR 24% Payback 3.03 WACC 575 575 190 385 190 195 190 5 190 185 190 375 190 565 NPVA NPVB 5% $584.09 $389.38 6% 7% 8% 9% 10% -
San Jose State BUS 173A
Click to Interest Rates Decline. When edit Master subtitle style Financial restructuring bond refunding 9/8/10 As interest rates have declined to all time lows. Many companies have called their higher priced debt in favor of issuing lower cost debt Like -
San Jose State BUS 173A
A company\'s current credit terms are 1/10, net 30, but management is considering changing its terms to 2/10, net 40, relaxing its credit standards, and putting less pressure on slow-paying customers. The company has annual sales of $1,000,000, but sales a -
San Jose State BUS 173A
Hager\'s Home Repair Company: 2006 Net Sales Cost of goods sold (60%) Selling/administrative expense Interest expense Total net operating capital a. 150.00 2007 $60.00 36.00 4.50 5.00 150.00 2008 $90.00 54.00 6.00 6.50 157.50 2009 $112.50 67.50 7.50 6.50 1 -
San Jose State BUS 173A
NPV USING CONSTANT DISCOUNTING (in thousands of $) Inputs Inflation Rate Real Discount Rate Outputs Nominal Discount Rate 8.0% 3.0% 4.854% 3 4 Nominal and Real Rates NPV Using Constant Discounting $30.00 ($20.00) Cash Flows Present Value of Each Cash Flow -
San Jose State BUS 173A
Kouros Vala Bus 173A Vuorikoski-Bullis Jeopardy Questions Ch. 10: Determining the cost of capital. Q1.) What is the Discounted Cash Flow approach used to estimate the required rate of return for externally raised common equity when flotation costs increas -
San Jose State BUS 173A
Which of the follou\'ing statements is false? A) If the bond trades at a discount, and investor who buys the bond will earn a retunr both from teceivin-e the coupons and from receiving a face r.alue that exceeds the price paid for the bond. B) Most coupon -
San Jose State BUS 173A
Bus 173A Vuorikoski-Bullis Jeopardy Questions Q1.) What is the Discounted Cash Flow approach used to estimate the required rate of return for externally raised common equity when flotation costs increase the cost of equity? Q2.) What are the two most impo -
San Jose State BUS 173A
Inputs Units Price Cost or Unit Cost Price/Cost Infl MACRS WC/NextSales Initial inv WC Salvage Value Cost of Capital Financials Revenues COGS OPEX Depr EBIT/EBT Taxes NI=NOPAT Add Depr EQ Op CF Minus IncrWC EQ FCF Terminal CF Total CF PV Factor PV NPV 0 -
San Jose State BUS 173A
Inputs Units Price Unit Cost Price/Cost Infl OPEX Depreciation CA Next Sales CL Next Sales Constant Growth Rate Cost of Capital Financials Revenues COGS OPEX Depr Interest EBIT/EBT Taxes NI=NOPAT Add Depr EQ Op CF MINUS Inv in OPCAP EQ FCF Terminal CF Tot -
San Jose State BUS 173A
How to submit documents via Blackboard Assignments Tab: When you log into Blackboard please make sure that you click on the \"Check Brower\" link on the right. The \"Check Browser\" window will do a quick check on your computer settings and let you know if an -
San Jose State BUS 173A
ANNUITY Inputs Payment Discount Rate / Period Number of Periods Present Value Present Value and System of Four Annuity Variables Annuity $80.00 6.0% 5 $336.99 8 6 5 $50.00 6 $0.00 $0.00 $100.00 Cash Flows Present Value of Each Cash Flow $1.00 $2.00 Period -
San Jose State BUS 173A
Barry Computer Company Balance Sheet as of Dec. 31, 2006: (In Thousands) Cash Recievables Inventories Total Current Assets Net Fixed Assets Total Assets Accounts Payable Notes Payable Other Current Liabilities Total Current Liabilites Long Term Debt Commo -
San Jose State BUS 173A
Expected Net Cash Flows Year 0 1 2 3 4 5 6 7 A $375 $300 $200 $100 $600 $600 $926 $200 $226.96 18.24 B $575 $190 $190 $190 $190 $190 $190 $0 $206.17 89.54 NPV: NPV@18%: 1.12 1.2 1.13 IRR= Payback Period @12% The discounted 1.21% 5.38 4.03 Excel: Practice -
San Jose State BUS 173A
Dollars in Millions Except Per Share Amounts COLGATE Consolidated Statements of Income For the years ended December 31, 2008 Net sales Cost of sales Gross profit Selling, general and administrative expenses Other (income) expense, net Operating profit Int -
San Jose State BUS 173A
NPV USING CONSTANT DISCOUNTING (in thousands of $) Inputs Inflation Rate Real Discount Rate Outputs Nominal Discount Rate 8.0% 3.0% 4.854% 3 4 Nominal and Real Rates NPV Using Constant Discounting $60.00 $40.00 $20.00 $0.00 ($20.00) ($40.00) ($60.00) ($80 -
San Jose State BUS 173A
Q1.) [Page 10-5] Q2.) [Page 10-6] Q3.) [Page 10-4] Q4.) [Page 17-1] re = [D1/(Po(1-F)] (1) interest rates & (2) taxes rs = rRF + (rM rRF) or rs = rRF + (MRP) (1) pay interest expenses (2) pay down the principal on the debt (3) pay dividends (4) repurchase -
San Jose State BUS 173A
n Name: (.t 8) (1) A mortgage company offers to tend you $100,000; the loan calls for 6Yo interest rate \', l\' ll\', , rfor20years. Computetheannual paymentfortheloan. (, \'.1 \\ ,-. , \'v\\ tl (2) PV of ordinary annuity is than FV of ordinary annuity. than PV -
San Jose State BUS 173A
LOAN AMORTIZATION Inputs Present value Interest rate / year Number of years $300,000 8.00% 30 Basics and Sensitivity Analysis Loan Amortization Interest Com30 8 30 $20,000 $10,000 $0 0 5 10 Year 15 20 25 30 $50,000 $40,000 $30,000 ponent Principal Compone -
San Jose State BUS 173A
ab [-xo* \\ I. Multiple Choice Questions ( 5 points each) 4\' The current inflation rate is 5%o, the nominal rate necessary for you to earn an gyo real sest to: J,l1famentally, Federar Reserve determines the interest rates. II\' Federal Reserve has very sign -
San Jose State BUS 173A
Hager\'s Home Repair Company: 2006 Net Sales Cost of goods sold (60%) Selling/administrative expense Interest expense Total net operating capital a. 150.00 2007 $60.00 36.00 4.50 5.00 150.00 2008 $90.00 54.00 6.00 6.50 157.50 2009 $112.50 67.50 7.50 6.50 1 -
San Jose State BUS 173A
Cor por at e Valuat ion and ValueBased M anagement Cor por at e Valuat ion Value-Based M anagement Det er minant s Of A Fir m\'s Value Sales Revenue Operating Costs and Taxes Req New Financing Interest Company Inv in Ops Decisions Rates Risk Market Risk F -
San Jose State BUS 173A
MINI CASE Hager\'s Home Repair Company, a regional hardware chain, which specializes in \"do-ityourself\" materials and equipment rentals, is cash rich because of several consecutive good years. One of the alternative uses for the excess funds is an acquisit -
San Jose State BUS 173A
T <:i r TE ustNo.2r,r,NCrr ()NrY! L . TO USE SUBJECTIVE SCOBE FEATUBE: fcnNTnoN ^ FORM NO Bot tr FOR USE ON TEST SCORING MACHINE ONLY REORDER ONLINE www.scantronf orms.com lt r . MAKE DARK MARKS . ERASE COMPLETELY TO CHANGE . Mark total possible subiectav -
San Jose State BUS 173A
t\".pttt* ,\'1 ot1,l+|, V U= Vyu + hv r^rr (A$\') -C\\LEnterpriseValue: MarketValue of Equiry PlERado:ffi: * Debr - Cash Share Price Earnings per Share l + EA^: (r * +\ .,i,* PV(growingperper y\'! \' \\/\'. ,.,P7(annuiryofCforIuo.;\';,switrinterestrater)-Q-+(\'#\") -
San Jose State BUS 173A
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES Consolidated Statements of Earnings -Income Statement) For the fiscal years ended October 31 2006 2007 Net revenue: Products Services Financing income Total net revenue Costs and expenses: Cost of products Cost of -
San Jose State BUS 173A
Please use the DESIGNATED ANSWER SHEETS for your answers. They link to this summ RED bar (make sure not to delete that part). Use the Financials Sheet and the Scrap Shee But make sure to link your answers in a way that makes it easy to grade. Every questi -
San Jose State BUS 173A
FIRM AND PROJECT VALUATION Inputs Valuation Object Date 0 Proj Investment or Firm Cap Tax Rate Unlevered Cost of Equity Capital Riskfree Rate=Cost of Riskfree Debt Inf Horiz Growth Rate of Unlev Equity Include Infinite Horizon? Cash Flows Date Revenues Ex -
San Jose State BUS 173A
Stevens Textile: Balance Sheet as of December 31, 2006 (Thousands of Dollars) 2006 1,080 6,480 9,000 16,560 12,600 29,160 Assets Cash Shortterm investments Accounts Receivable Inventories Current assets Net Plant and Equipment Total assets Liabilities A -
San Jose State BUS 173A
SINGLE CASH FLOW Inputs Single Cash Flow Discount Rate / Period Number of Periods Present Value Single Cash Flow Present Value $1,000.00 6.0% 5 20 6 5 $1,400.00 $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 $0.00 0 1 2 Period 3 4 5 Cash Flows Presen -
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San Jose State BUS 173A
PV=C/(1+r)^n FVn=PV(1+r)^n Find C C=(1/r)(1-1/1+r^n) C=P/Ans Real Interest Rr= r-i/1+i=r-I Mortgage Payoff Growing Annuity PV=C/r(1-1/1+r)^n PV=(C/r-g)(1-(1+g/1+r)^n) Balloon Payment EAR=(1+APR/k)^k-1 X=(P-C/r(1-1/1+r^n)(1+r)^n Delayed Inv. (Bill Clinton) -
San Jose State BUS 173A
NPV USING GENERAL DISCOUNTING (in thousands of $) 0 Nominal and Real Rates NPV Using General Discounting $30.00 ($20.00) ($70.00) ($120.00) 0 1 2 Period Inputs Period Inflation Rate Real Discount Rate Outputs Period Nominal Discount Rate 0 0 1 3.0% 4.854% -
San Jose State BUS 173A
NPV USING GENERAL DISCOUNTING (in thousands of $) $60.00 $40.00 $20.00 $0.00 ($20.00) ($40.00) ($60.00) ($80.00) ($100.00) ($120.00) 0 Nominal and Real Rates NPV Using General Discounting Cash Flows Present Value of Each Cash Flow -114 -100 -86 -72 -58 -4 -
San Jose State BUS 173A
d0 trCr cDr trCr EDtr trDr cp: rJi cQ: cfw_r.Er cCr cDr c$: trD: trCr cDr trC: * trC: trD: trCr t -
San Jose State BUS 173A
12-8: Expected Net Cash Flows: Year 0 1 2 3 4 5 6 7 A -$375 -$300 -$200 -$100 $600 $600 $926 -$200 B -$575 $190 $190 $190 $190 $190 $190 $0 1.12 NPV $162 -
San Jose State BUS 173A
\". \' ,_/.- I I. Multiple Choice Questions ( 5 points each) Ja, \" 1. The current inflation rate is 5Yo, tlne nominal rate necessary for you to earn an 8o/o real interest rate on your investment is closest to: ffi, c. a. rs.0% 13.4% d. 4.9%. 3.0%. i\'-l .!l -
San Jose State BUS 173A
Click to edit Master subtitle style Your project NPV is positive. lease the equipment? Should you buy or Buy vs. lease 9/8/10 Reminder In Capital Budgeting (Brigham 12-14) we only considered financing as part of the required rate of return, typically WAC -
San Jose State BUS 173A
Brigham 9-6 Stevens Textile: Balance Sheets as of December 31, 2006 (Thousands of Dollars) Actual 2006: Assets Cash Receivables Inventories Total Current Assets Net Fixed Assets Total Assets $1,080.00 $6,480.00 $9,000.00 $16,500.00 $12,600.00 $29,160.00 L -
San Jose State BUS 173A
6-month T-bills nominal rate of default free 6-month Japanese bonds spot exchange rate: 1 Japanese Yen = $0.009 Solve for the 6-month forward exchange rate: Ft = ? 7% 5.50% (forward exchange rate/spot exchange rate) = (1+ host rate)/(1+ foreign rate) fore -
San Jose State BUS 173A
Inputs 0 Units Price Cost or Unit Cost Price/Cost Infl MACRS WC/NextSales Initial inv WC Salvage Value Cost of Capital Financials Revenues COGS OPEX Depr EBIT/EBT Taxes NI=NOPAT Add Depr EQ Op CF Minus IncrWC EQ FCF Terminal CF Total CF PV Factor PV NPV I -
San Jose State BUS 173A
FCF Discount Rate Capital Budgeting Value of Ops Value of Acquisitions Leases and Bond Refnancing Chapters 12-14 Chapters 11 Chapter 26 Chapters 18, 19 no graphs, no sensitivity analysis there will be problems that use the template from the previous probl -
San Jose State BUS 173A
Click to Interest Rates Decline. When edit Master subtitle style Financial restructuring bond refunding 9/8/10 As interest rates have declined to all time lows. Many companies have called their higher priced debt in favor of issuing lower cost debt Like -
San Jose State BUS 173A
Chapter 25 Mergers, LBOs, Divestitures, and Holding Companies ANSWERS TO END-OF-CHAPTER QUESTIONS 25-1 a. Synergy occurs when the whole is greater than the sum of its parts. When applied to mergers, a synergistic merger occurs when the postmerger earnings -
San Jose State BUS 173A
Click to edit Master subtitle style Your project NPV is positive. lease the equipment? Should you buy or Buy vs. lease 9/8/10 Reminder In Capital Budgeting (Brigham 12-14) we only considered financing as part of the required rate of return, typically WAC
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