Problem 21, pg 84 Data TAI PO STATIONERS 2006 Income Statement Sales Costs Other Expenses Earnings before interest and taxes Interest paid Taxable income Taxes (35%) Net income Dividents Addition to retained earnings HKD 905,000 710,000 12,000 183,000 19,
The Model used by Regulators
(Figure 15.1, page 272)
Risk Management and Financial Institutions 4e, Chapter 15, Copyright John C. Hull 2015
1
New Capital Requirements
IRB Approach for corporate, banks and sovereign
exposures
Basel II provides a formula fo
Corporate Finance II
Fall 2016
Prof. Gurov
Andrey Gurov
AUBG, Fall 2016
Valuation
Dividend Discount and Gordon Growth Models
Multiples Valuation
Enterprise Value and Free Cash Flow Model
Andrey Gurov
AUBG, Fall 2016
Valuation and Finance
How much should a
Basel I, Basel II, and
Solvency II
Chapter 15
Risk Management and Financial Institutions 4e, Chapter 15, Copyright John C. Hull 2015
1
History of Bank Regulation
Pre-1988
1988: BIS Accord (Basel I)
1996: Amendment to BIS Accord
1999: Basel II first propos
Problem 5 a) Q1 Beginning receivables Sales Cash collections Ending receivables b) Q1 Beginning receivables Sales Cash collections Ending receivables c) Q1 Beginning receivables Sales Cash collections Ending receivables Problem 6 The inventory turnover an
Problem 24 a) Taxes =
$600,000
The return on the unlevered equity: R= 9%
b) The company's market value balance sheet berofe the anouncement Debt $Assets $10,000,000 Equity $10,000,000 Total assets $10,000,000 Total $10,000,000 Price per share = c) Present
Problem 11 Rs = 0.15 Market value for equity = $5,130,000.00 Market value for debt = $4,120,000.00 YTM of bonds => 1030 = 1000*0.07/2(PVIFAR%,40) + $1,000(PVIFR%,40) 1030.56 We get this value for a rate equal to 3.36% YTM = 6.72% RWACC Problem 12 Rs = 0.1
Problem 8 20% in stock G, 8% expected return 70% in stock J, 15% expected return 10% in stock K, 24% expected return Portfolio's expected return = 14.5%
The expected return of the portfolio is the weighted average of the expected returns of each asset. Th
Problem 14 Sale price VC Marketing Sale loss Sale increase FC R&D Plant & Equip NWC Tax rate Payback, NPV, IRR? Solution Year 0 Sales Variable costs Fixed costs Depreciation EBT Tax Net income OCF NWC NPV = Payback period IRR = $(950,000.00) $9,103,636.91
Problem 22 A NPV IRR Inc. IRR PI
B Implications $34,682.23 $93,604.18 Project B has a greater net present value, thus it should be preferred over projec 31.28% 29.54% For both projects IRR is greater than the discount rate, thus both of them are acc We sh
Problem 13 dividend of 3 just paid, g is expected to be 5%, investors require 16% return for the first 3 years, 14% next three years, 11% thereafter; current share price? P0 = Div1(1+g)[(1 - (1+g)/(1+R)^T)/(R - g)] + Div1 = $53.99
Problem 14 no dividends
Problem 10 Miryang: premium bond, 8% coupon, semiannual payments, YTM of 6%, 13 years to maturity Yeosu: discount bond, semiannual payments, 6% coupon, YTM of 8%, 13 years to maturity Interest rates remain unchanged. Price in 1, 3, 8, 12, 13 years from no
4.20%
-500
after one year
today
Initial
Cf
950000
109000000
US
Japan
3.80%
1.20%
110
479.85
521.00
107,707,509.88
979,159.18
Rate
29,159.18
HW#5
1.63
11.80%
5.40%
25.46875
2
old
Div
new
4.99
Expected
Price
3.10%
51.57
new
4.90%
3.09
P0 = div1/(rE-g)