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BusM 301 Notes Brau

# BusM 301 Notes Brau - mutually exclusive N I/Y solve for...

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15 March 2012 (1) In IO, what’s DEPR (2) Annual Deprec = (V- S)/ # simplified = 0 salvage V = 100 S = 20 # = 10 AD = 100/10 = 10 Taxes = (20 – 0)*t (100 – 20)/10 = 8 -> if didn’t depreciate down to 0 (3) Chapters 6 (bonds), 7 (equity), 10 (leverage), 11 (cap bud NPV, IRR,etc), 12 (CF cap buds) (4) Differential = incremental. (costs: sunk, incidental opportunity) (5) Change in NWC a. CA … change in none, cash, AR, Inv / CL AP, Accr b. ACF c. TV (ACF + TCF) after-tax salvage + changeNWC (6) In Excell = IRR (IO: CFT) = NPV (Rate, CF, :CFt) – IO (assuming IO is positive in sheet) (7) Two projects PB NPV IRR PI AARR EAA [1] solve for NPV = PV (capital constraints and constrained budget;
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Unformatted text preview: mutually exclusive) N, I/Y, solve for PMT (8) [Duration not on test] How sensitive is a Sod’s price to changes or interest rates? (9) Revenue = sales (10) Sgr = g = ROE (1- div/Ni) V = D1/ (r-g) g comes from above = D0 (1 + g)/ (r – g) Ex: ROE 12%, div payout ratio = 50% Recently paid \$.25/quarterly dividend Cost of capital = 20% what is v? V = d0(1 + g)/(r-g) (.25 x 4) (1 + .12(1 - .5)) / (.20 - .12 (1 - .5)) GGM make sure 1) Annual divided 2) Use D1 (future dividend) Historical given (D0 (1 + g) Future given (D1 already)...
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