assign1 - FINA 1003C - Corporate Finance Spring, 2011...

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FINA 1003C - Corporate Finance University of Hong Kong Spring, 2011 Konan Chan 1 Assignment #1 Please type your assignment . The assignment is due on 5 pm , February 10. Please submit your assignment to TA Titi (#20 mailbox at KKL 9th floor). Please show all your work , inputs and/or spreadsheet to get full credit. You will get zero point if you provide only answers without steps . Please use the information in the excel to work on the first two questions 1. We compare Coca Cola and Pepsi in class by using the Du Pont equation. Please extend the analysis to year 2008. (a) What is the return on equity for Coca and Pepsi? (b) Please show the Du Pont identify for both firms? (c) If you were the investor, do you prefer Coca or Pepsi? Why? 2. Again, for year 2008, work on the free cash flows for two firms. (a) What is the operating cash flow? (b) What is the net capital spending? (c) What is the change in working capital? (d) What is cash flow from assets? 3. You have decided to endow your favorite university with a scholarship in honor of your successful completion of corporate finance. You would like this scholarship to provide $12,000 per year into perpetuity when the endowment is ready. You expect to give the university the endowment in 10 years and will accumulate it by making annual (end-of- year) deposits into an account. The annual rate of interest is expected to be 4.8 percent
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This note was uploaded on 03/14/2011 for the course ECON 1001 taught by Professor S.c during the Spring '10 term at HKU.

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assign1 - FINA 1003C - Corporate Finance Spring, 2011...

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