Capital Budgeting Case Analysis (due in class on Wednesday, 10/26)
Names:
_Kenny Bjellquist_ _
Class section: (circle one)
9:30 11:00
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Below please fill in your final answers. Make sure to attach your supporting work
Exam 1
1. The primary goal of financial management is to maximize the market value of
existing stock.
2. Operating cash flow is defined as the cash that a firm generates from its normal
business activities.
3. Cash flow to stockholders is defined as Divid
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.4889609392
R Square
0.2390828001
Adjusted R Square
0.2167028824
Standard Error
0.0393312793
Observations
36
ANOVA
df
Regression
Residual
Total
Intercept
X Variable 1
1
34
35
SS
MS
F
Significance F
0.016525
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.4889609392
R Square
0.2390828001
Adjusted R Square
0.2167028824
Standard Error
0.0393312793
Observations
36
ANOVA
df
Regression
Residual
Total
Intercept
X Variable 1
1
34
35
SS
MS
F
Significance F
0.016525
Exhibit 7: British Satellite Broadcasting Financial Forecast if Sky Exits
Item
BSB market share
Cable households
Total Revenue (Original)
Additional revenue with new Market Share
Total Revenue after Sky Exit
Total Costs (Original)
Additional Costs
Total C
Exhibit 7: British Satellite Broadcasting Financial Forecast if Sky Exits
Item
BSB market share
Cable households
Total Revenue (Original)
Additional revenue with new Market Share
Total Revenue after Sky Exit
Total Costs (Original)
Additional Costs
Total C
What are some differences in the analysis of a new capital-expenditure project versus that for a
renewal/replacement Project?
When a projects cash flows are calculated, interest charges are not deducted. Why? Explain.
What are the different types of risk
Week 4 Discussion
How do you define and measure risk?
What are the different types of risk affecting the securities and portfolios held by individuals and
corporations? Discuss
What are the different types of risk affecting the operations of corporations?
The Cost of Equity:
Required Rate of
Return
FIN 370 Lecture 4
1. DDM(Dividend Discount Model/the Gordon Growth Model)
2. CAPM Model
Non-constant Growth
Problem Statement
Suppose a firm is expected
to increase dividends by 20%
in one year and by 15% for
tw
Principle of Investment
10-1
Set Your Financial Goals
Just as in other aspects of your life, setting financial goals is a
tried-and-true way to reach those goals.
You can create a list of your financial goals on your own or
you can work with an investme
Chapter 4
Bond Valuation
https:/www.youtube.com/watch?v=TGyWlKYKoq4
1
Determinants of Intrinsic Value: The Cost of
Debt
Net operating
profit after taxes
Required investments
in operating capital
Free cash flow
=
(FCF)
Value =
FCF1
FCF2
+
(1 + WACC)1 (1 +
Stock Valuation:
Introduction
FIN 370
Brent Crude Oil
A simple calculation
Portland Spring Water: $ 0.35/500ml, or $650/ton
Crude Oil: $ 29.5/barrel, or $250/ton
Price of Spring Water > 2* Crude Oil ?!
$ 29.85
$ 125.61
$158.48
$239,393.94
Exchange-Trade
A bond that matures in six years has a par value of $1,000, an annual coupon payment of
$80, and a market interest rate of 9%. What is its price?
Years to Maturity
Annual Payment
Par value
Going rate, rd
6
$80
$1,000
9%
Value of bond =
A bond that matures
Go to the Yahoo Finance website: http:/finance.yahoo.com/,
then search the tickers of your TWO stocks
AND ALSO the market index(^GSPC)
Then click the Historical Prices
on the Right Column of stock page
Select the correct date range as required by project(
FIN343 IMF
Marshall University
Prof. Lu
Assignment 1
Time Value of Money and Financial Calculator
1. In January 2007, the average price of an asset was $27,658. 7 years earlier, the average
price was $21,408. What was the annual increase in selling price?
Example Introductory Speech
Name
CMM 103-221
Date
Statement of Specific Purpose: <fill in speech topic here>I want my audience to
understand the three characteristics I share with a can of Sprite.
Introduction
I.
Attention-Getter: <Open with a very brief
Case Study: Nike, Inc
Financial Statement and Cost of Capital
FIN343 Spring 2016 Marshall University
Lu
Questions
What is the WACC and why is it important to estimate a firms cost of
capital? Do you agree
with Joanna Cohens
WACC calculation?
Why or why n
MATCHING
Match each corporate finance function with its related activities:
a.
corporate governance
b.
risk management
c.
capital budgeting
d.
financing
e.
financial management
1.
2.
3.
4.
5.
Selecting projects based on perceived risk and expected return.
Chapter 1The Scope of Corporate Finance
MULTIPLE CHOICE
1. _ activities allow corporations to raise capital by selling stock to investors.
a.
NYSE
b.
Secondary market
c.
Primary market
d.
Money market
e.
Centralized Nasdaq
ANS: C
PTS: 1
REF: 1.1
OBJ: TYPE
Alexis Holmes
Correlation coefficient(r)-measures strength & direction of linear relationship
b/w x & y
or r= (sign of slope)
Testing
r2
is b/w -1 and +1
= the pop. Correlation coefficient
r
H0 :
=0 no lin. Relationship b/w x & y
tstat=
1r 2
n2
& df= n-
QMB Test 2 Extra Notes
Assumptions/Conditions for a CI
Assume the sample is randomly selected and/or representative of the
population
If n 30, we assume that the population from which the data came is
approximately normal
SD doesnt exist for yes/no
Spec
Hypothesis Testing: testing unknown parameters (assume null hypothesis is true)
Step#1-2:get Ho(at most or at least or is/equal) & H1(greater than or less than
or is not)
One tail (upper) test
One tail (lower) test
Two-tailed (two-sided)
H0: or <
H0: or
Population: all people/things of interest Parameter: numerical characteristic of a pop (known)
Sample: small random subset of pop Statistic: numerical characteristic of a sample (known)
Summarizing data: measures if center and measures of spread (aka vari
Basics of
Financial Statements
These slides are for the private use of students in my finance courses at
Fayetteville State University only. Any other uses, including copying,
sharing, circulating, or posting to the internet or other networks are strictly
Fayetteville State University
School of Business and Economics
Department of Accounting, Finance, Healthcare and Information Systems
Principles of Finance (FINC 311-02)
Homework Assignment
Fall 2016
270 points
Name
Section
Date
This homework assignment is
TIME VALUE OF MONEY PROBLEMS
Problems
1. In how many years $100 will become $265 if k = 11%?
265
ln
100
n
9.33844 9.34 years
ln(1 0.11)
2. In how many years will an amount double if k = 7.6%?
n
ln 2
9.46 years
ln 1.076
3. In how many years will an a