Amtelecom Group

Amtelecom Group
1. What does it mean if a company "trades at a discount"? Is Amtelecom Group Inc. (AGI) really
trading at a discount?
If the market value of a stock is lower than its intrinsic value, this stock is defined as "trades at a
discount". To figure out whether AGI stock is traded at a discount to comparable companies, as its
management believed, we can simply apply multiple which comes from the average multiple of its
comparable companies. Considering fluctuation of future after–tax earnings caused by the change in
capital structure, we prefer to use TEV/EBITDA multiple in this case. Amtelecom Group consists of
two lines of business which has to been taken into consideration. We separately calculate the value
of both companies and their ... Show more content on Helpwriting.net ...
3.2 Strengths and weaknesses of Amtelecom Communications
Strength: Amtelecom Communications is the sole provider of local telephone services in all of its
exchanges and a leading provider of long distance and data services in the majority of his
exchanges. As a sole provider of some services, Amtelecom Communications ensures the constant
revenue and customers. Its subsidiary, Amtelecom Cable inc. has eight stand–alone systems exempt
from licensing. The cost advantage ensures the leading position of Amtelecom Communications.
Weakness: Amtelecom Communication's telecommunication business occupies 90 percent of its all
business. If there is an unforeseeable risk occurring in telecommunications, the company may suffer
devastating loss. Company should focus more on new growth point, such as internet and service
innovation.
4. Assess the value of Amtelecom Communications using available valuation methods including
DCF and multiples. Which valuation method is most suitable for each sales alternative? What are
the expected net proceeds for each sales alternative?
Because the management of AGI expects to complete the acquisition by early 2003, the valuation of
the Amtelecom Communication should be calculated for 31 Dec, 2002. In order to calculate the
NPV of Amtelecom Communication during the planning period, we first use pro forma
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Economic Valuation Of The Negative Externalities...
Environmental Economics
In the last few years, some major travel destinations in Europe have witnessed an increasing social
opposition to crowds of tourists due to the negative environmental and social costs tourism imposes
on locals. The emergence of different citizens' associations in Venice, Barcelona and Mallorca
having a critical attitude towards tourism and aiming to improve the quality of life of
neighbourhoods are a good example. Discuss if the economic valuation of the negative externalities
associated to tourism could play a role in the management of these emerging social conflicts.
Tourism is one of the significant actives showing enormous growth. As a result tourism, many
countries can be seen as an instrument of regional ... Show more content on Helpwriting.net ...
The environment interacts with the economy in four different ways. However, the markets are
unable to register its value. The links created by the implementation of the millennium ecosystem
assessment 2005 building relationships between the economic system and the environment.
Establishing biodiversity as a component of the ecosystem, resulting in the impact of functionality
and service provisions and financial activities. Goods and services provided by the ecosystem
measures through the Pareto efficiency.
Economist decomposed the total economic value by categorising resources into three components:
use value, option value, and nonuse value. Use value reflects the direct use of the support an
example is trees from a forest. Pollution can cause a loss of use value when air pollution increases.
Option value reflects the value people place on the future use of the environment; the willingness to
preserve an option to use the environment in the future though it is currently not utilised. Nonuse
value reflects the observation that people are more willing to pay (WTP) for improving/preserving
resources that they will never use. A true nonuse value is called existence value. An example would
be the protest of dams due to the potential loss of the resource. The amount does not derive from
direct use or possible use,

Case Study : New Flying Machine Advancement Program Essay
They display a procedure to assess adaptable business techniques that depend on genuine
alternatives investigation (ROA) and Monte Carlo reproduction. This strategy is a change over
Black Scholes model on the grounds that their system considers the adaptability that chiefs need to
influence the accomplishment of any given task and, thusly, it gives a superior evaluation of
undertaking worth. To fortify their contention, numerical results are given for a delegate procedure
taking into account a genuine flying machine producer 's information. They fight that speculation
choices in new air ship advancement projects are troublesome due to expansive A fat–followed
dispersion is a likelihood dispersion that has the property that they show to a great degree substantial
skewness or kurtosis. capital uses, long lead times, and numerous specialized and market
vulnerabilities. A more adaptable methodology would exploit the capacity of administrators to fuse
data as vulnerabilities are determined and they propose this as a way to oversee hazard. They utilize
genuine choices examination to assess and manage new flying machine advancement programs
which are outlined through a contextual analysis of a true air ship program. Their examination gives
clear proof that speculators can utilize the numerical consequences of the genuine choices
investigation to decide the amount they ought to spend on a flying machine program, that
administrators can utilize the same results to rebuild the

Home Depot Stock Valuation
II. Stock Valuation
A. Based on the figures provided calculate each of the following: A "dividend yield is a stock's
dividend as a percentage of the stock price" (Dividend Yield 2018). As a measurement of an
investment's productivity, a higher dividend yield signifies corporate stability. In other words,
companies who can disburse divdends are considered more stable and low–risk investments. Home
Depot's dividends yields for 2012, 2013, and 2014 are 2.30%, 2.20%, and 2.30% respectively, while
the dividend per shares are $1.16, $1.56, and $1.88 respectively. If Home Depot increases its
dividend per share by $1.75, the figures increase to $2.91 in 2012, $3.31 in 2013, and $3.63 in 2014.
The impact that occurs on dividend share after increasing ... Show more content on Helpwriting.net
...
Equity financing does not require repayment, therefore, Home Depot can utilize the funds for
improvements or company growth. Unfortunately, Home Depot has to relinquish some ownership
and decision–making authority to its shareholders. However, relinquishing some ownership means
that shareholders assume some of the incurred debts and risks. Furthermore, lowering the debt–to–
equity ratio enables Home Depot to secure debt financing. Since Home Depot has shareholders
under equity financing, they need to distribute quarterly dividends. During 2014, Home Depot
declared dividends to 132,000 common shareholders. Declaring quarterly dividends enables
shareholders to invest back into the company by acquiring addition stock. "In addition to making
disciplined decisions about capital allocation, we maintained our focus on expense control, which
drove for higher returns on invested capital and allowed us to return value to the shareholders
through $7.0 billion in share repurchases and $2.5 billion in dividends in fiscal 2014" (Home Depot,
Inc. Form 10–K 2015) (Kokemuller

How Expensive Are Us Equities?
How Expensive Are US Equities?
I mentioned last week that US P/E multiples were vulnerable to a correction. In the near–term, the
biggest threat is policy tightening by the Fed, while, over the intermediate horizon, rising
inflationary expectations present a potentially bigger threat. Most valuation models are, however,
not robust enough to indicate the precise timing of market adjustments. Against this backdrop, it is
probably too dangerous to place excessive faith in just one single measure. It is, therefore, wiser to
look at a wide range of valuation measures to confirm that equities are mispriced relative to
fundamentals. The Rule of Twenty and the equity market capitalisation to GDP ratio both suggest
that US equities are expensive. ... Show more content on Helpwriting.net ...
What are other valuation measures saying?
Market Capitalisation to GDP Ratio Also High
Equity prices capture investors' perceptions of the future profitability of corporate entities.
Periodically, there can be a disconnection between such expectations and what the real economy can
truly deliver to facilitate corporate profits growth. Over the long run, the boundaries of corporate
performance are firmly imposed by the global economy. In the interim, however, there can be
company/sector specific factors that produce profits growth in excess of the aggregate economy. An
elevated level of stock market capitalisation to GDP is often an indication that investors have
become somewhat too exuberant. In the US, the current level is running at 170%, very close to the
all–time high of 183% in March 2000. This would, therefore, suggest that the US market has
reached vulnerable territory. Valuation measures are not, however, without their critics and three
critiques have been levied against this particular measure. Firstly, the ratio does not supposedly
adjust for the impact of technological innovation on operating margins, as well as lower interest
expenses. Secondly, the geographic origin of US corporate profits is diverse. Nearly 50% of
S&P500 revenues are derived from overseas economies, implying that US GDP is an inappropriate
valuation measurement gauge. Finally, the sector composition of the S&P500 is substantially
different to the real economy. My thoughts on

Property Valuation Essay
In the case of the awareness creation, 63 respondents, which means majority of the households
answered as there was no awareness creation that shows shortcoming on one of procedures of
property valuation in expropriation. According to Tony O'Sullivan (2003), "Housing, which is one of
the major types of real property, is an inherently complex commodity with spatial fixity" for which
many aspects must be taken in to consideration in its valuation and expropriation process. The writer
of this study concluded that people who were expropriated had no chance to discuss the economic,
social, and cultural aspects in the process of expropriation depending on the above majority
response in table(3). In real property appraisal, the objective of ... Show more content on
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It is known that when there is no consideration of property type, on the other hand, there is no
selection of valuation method. Because, selection of valuation method and identification of property
type mostly go together. Description of the property which is the subject of a valuation report is one
of the scientific procedures of valuation (http://www.iacenig.org/CEthics.html). This is realized from
the fact that for the selection of valuation method, the available data and the type of property
(commercial or residential) plays important role.
IA & CE (2008) says that, "The procedure and method for deciding a given value in question is a
matter for the valuer himself to determine. Nevertheless, better valuation practice needs that the
method selected be right for the purpose, hold consideration of all the factors that have a bearing on
the value, and are presented in a clear and logical way".
There are three major types of property valuation methods and selection of the appropriate method
according to the condition of the property is the most important precondition to reach at the most
accurate value of the property. Regarding this condition, 4(80%) of the expert respondents reacted as
there was no consideration of the alternative method in Gimbi town during expropriation. From this
response, the researcher approved that there was no concept of valuation methods. Here, what
should be understood is that, they use the idea that says current cost or market price as

Dividend Discount Model
Financial Market Revision
Question 1 Performance Evaluation Calculation Discursive 20% 80% Question 2 Dividend
Valuation Model 45% 55% Question 3 Option strategies Straddles 80% 20% Question 4 Duration
and convexity –Price – yield relationship 30% 70% Question 5 Option and Futures –mixed N/A
100% Question 6 CAPM 40% 60%
Dividend Discount Models 1. The intrinsic value, denoted V0, of a share of stock is defined as the
present value of all cash payments to the investor in the stock, including dividends as well as the
proceeds from the ultimate sale of the stock, discounted at the appropriate risk–adjusted interest rate,
k. Whenever the intrinsic value, or the investor's own estimate of what the stock is really worth,
exceeds the market ... Show more content on Helpwriting.net ...
What is the firm value, assuming no growth opportunities? What is the present value of the firm's
growth opportunities? The risk free rate of return on Treasury bills is 4.8%. The market risk
premium is 6% and Innovation's share beta is 1.2. b) Calculate Innovation's price–earnings ratio and
the price–book ratio (i.e. the ratio of the market value to book value) as of 31 December 2002. c)
What are the advantages and disadvantages of each of the three valuation methods used in (a), and
(b)? d) State whether Innovation's share is overvalued or undervalued as of 31 December 2002.
Support your conclusion using your answers to previous questions and any data provided. The past
10–year average FTSE All Share index relative price–earnings and price–book ratios for Innovation
were 0.4 and 1.12, respectively.
9 a. Dividend Discount Model The oldest discounted cash flow models in

Advantages And Disadvantages Of The Dividends Discount Model
In this paper, a study on the Dividends Discount Model (DDM) will be explored and explained. The
four main topics that this essay will be based around include what two common share valuation
techniques are used, the dividend discount model and the use of a multiples approach, a discussion
on the relative advantages and disadvantages of dividend discount model and a look into which
model would produce the most accurate results and Why? With the relevant content, research, and
analysis of these specific topics, an understanding of these methods and procedures will be the
overall objective and purpose of this paper.
Formula = Dividend per share Discount rate – Dividend growth rate Dividend discount ... Show
more content on Helpwriting.net ...
The past plays a big part in the future when it comes to dividends, if there has been a strong growth
in dividends in the past then future dividend growth is predicted signaling a strong bottom–line and
profits for the company.
Advantages of the DDM are that it is frequently used when calculating share prices, due to it being
easily taught and its simplicity making it easy to understand. DDM also has the ability to give value
to a company's stock, disregarding the current market making it easy to compare across different
companies and industries big or small. Another advantage is the models rely firmly on theory and
also its ability to stay consistent over the lifetime of the company.
Disadvantages of the DDM include the model itself not appreciating certain factors such as
customer and brand loyalty and the ownership of intangible assets. Factors that are vital towards the
success value of a company. Another disadvantage is the DDM being highly dependent on the
assumption of the company's growth in dividends believing that it's rate is stable and known. DDM
states the fact that stock prices are fragile to the chosen growth rate of dividends, eliminating the
ability for the rate to surpass the cost of equity, which in some cases isn't always

Tesco Valuation
Aim of the report
The aim of the report is to use different valuation techniques to see if the current share price of
Tesco plc is fair, undervalued or overvalued. Some of the findings will be compared with other firms
in the same industries and share holders will be informed on whether they should buy, hold or sell.
Background information on Tesco
Tesco is the largest supermarket retail chain in the United Kingdom with Sainsbury being their
closest rival. It is also the third largest retail chain in the world. In the beginning Tesco started off by
selling basic groceries before diversifying into many different markets. In 2007 Tesco was operating
in the following fields:
General groceries
Personal banking
Fuel
Telecom ... Show more content on Helpwriting.net ...
There are many other factors that will have a say in a firms share price. All of which can have an
effect on a share price if there is a slight change in their figures or prospects.
Earning Based Valuation
Price to Earnings Ratio (PER) refers to the fact how long a shareholder has to wait to recover the
cost of purchasing the share. PER is directly affected by the market valuation of a share. Tesco has a
PER of 18.1p in the year 2007. This is above the competitor's average PER in the same industry
(appendix 1). Sainsbury has the highest PER but this doesn't suggest they are shares are more
profitable than the other three companies. This suggests they earnings are expected to increase at a
quicker rate than their rivals. Sainsbury PER is high this year but this is because their EPS for prior
years were quite low which meant they were not really profitable in the previous years. Tesco have
had a stable growth when it comes to EPS so their PER has also been stable.
The two problems with using PER are that it is calculated using accounting profits and based on
historical information. Accounting can be biased or even miscalculated which can lead to a wrong
PER figure.
Price to Sales Ratio (PSR)

Branson Valuation Essay
–––––––––––––––––––––––––––––––––––––––––––––––––
Business Valuation Report
The Branson Trucking Company As of December 31, 2007 for Dave James
by
Hien Nguyen
Forensic Accounting
Tuesday 5:30–8:30 PM
November 29, 2011
Dear Dave James,
I have been asked to determine the fair market value of Branson Trucking Company as of December
31, 2007 for the purpose of determine your share in the business.
The definition of fair value market value is the price at which the property would change hands
between a willing buyer and willing seller, neither being under compulsion to buy or to sell and both
having reasonable knowledge of all relevant facts.
Based on the information ... Show more content on Helpwriting.net ...
Major companies include Con–Way, JB Hunt, Schneider National, Swift transportation, and YRC
Worldwide. Most employees in the truck transportation and warehousing industry work in small
establishments. Fewer than 5 workers are employed by 62 percent of trucking and warehousing
establishments. Consolidation in the industry has reduced the number of small, specialized firms.
Trucking and warehousing establishments are found throughout the United States. The differential
in growth between the freight industry and the trucking industry could be the factor that pushes
trucking vacancies. The trucking industry has a current growth rate of 1%, while the freight industry
is seeing a 4% growth rate. In addition, federal safety regulations are limiting the work hours for
truck drivers, which results in more employees needed by trucking companies. The combination of
all these things compiled the cost of diesel, spells out higher overall costs for every single trucking
company in the industry. The growth of the freight industry and superior efficiency of railroads will

lead to an even slower growth rate for the trucking industry and could be a cause for more concern
as the trend continues.
––––––––––––––––––––––––––––––––––––––––––––––––– The Asset Approach Adjusted Net
Worth Net Worth as adjusted simply summarizes the net assets and liabilities

The Pros And Cons Of Selling A Company
Selling a company is the most famous exit strategy for company owners. Sometimes, there aren't
any successors who would like to keep up the company in others, it had been consistently the
company owner's strategy to convert the industry into liquid assets at a specific stage. Regardless of
the reason you want to sell yours, obeying these suggestions for selling a company can help make
certain you receive the best cost and your company sells.
Sell at the right time for the right reasons
For one thing, it's definitely going to be quite hard for you to cope with all the extra worry of selling
a company in those conditions for another, your circumstances will be used by the buyer as leverage
against you.
The ideal time is when you're still hale and ... Show more content on Helpwriting.net ...
Hence whether you have some interest made in running the company, you should be sure that you're
maintaining the company's records updated, the inventory up and the assumptions preserved.
Individuals need to purchase profitable companies, not ignored ones.
You will also prefer to be sure that you've reduced your obligations as much as you possibly can,
doing things like settling any suits and making sure all tax payments are current.
Get professional help when selling a business
Selling a company is an even more sophisticated trade than selling a home and arguably, one that
has even more psychological impact.
**As already mentioned, an expert valuator can discover what your company would be worth.
**A realtor or business broker may be a real godsend when it comes to locating and dealing with
would–be buyers of your industry and enabling you to browse the sales process.
**An attorney can draw up and review the records essential to offer your company, which includes
the record that summarizes your organization for would be buyers along with the sales and purchase
agreement.
One Last Trick for Selling a

Interest Rate Risk Analysis Case Study : Brac Bank
Table of Content
1. Executive summary iv 2. Introduction 2 3. Repricing Model 2 I) Refunding or funding gap 3 II)
Advantage/Disadvantage 4–5 4. Maturity Model 6–10 5. Weakness of maturity model 11 6.
Duration Model 12–15 7. Limitation of Duration model 15 8. Case Study –Brac Bank Ltd 16–20
INTRODUCTION:
Interest Rate Risk – In the process of FIs performing their asset–transformation function, FIs are
exposed to Interest Rate Risk, from Mismatched Maturity/Duration: Borrowing Short, Lending
Long. The risk that an investment 's value will change due to a change in the absolute level of
interest rates, in the ... Show more content on Helpwriting.net ...
◆ Changes proportional to CGAP assuming no spread effect
Unequal Changes in Rates:
◆ If changes in rates on RSAs and RSLs are not equal, the spread changes. In this case, (NII =
(RSA × ( RRSA ) – (RSL × ( RRSL )
◆ Spread effect: the effect a change in the spread between the rates on RSAs and RSLs has on net
interest income as interest rate changes.
Advantages of Repricing Model:
Easy to understand, easy to work with, easy to forecast changes in profitability from interest rate
changes.
Disadvantages/Limitations of Repricing Model: 1. Does not account for balance sheet changes in the
market value (PVA and PVL) of the bank when interest rates change, so is only a partial model of
interest rate risk.
2. Within a given time period (bucket), e.g. 1–5 years, the dollar values of RSAs and RSLs may be
equal (indicating no interest rate risk), but the assets may be repriced early, and the liabilities
repriced late, within the bucket time period, exposing the FI to interest rate risk not accurately
captured by the Repricing Model. "Ignores CF patterns within a maturity bucket," e.g. one–year

ARM rates might be re–set on a different date than the maturity patterns of 1 year CDs.
3. Assumes NO prepayment of RSAs or RSLs, when there can actually be a high volume of

Mw Petroleum Essay
Valuation is the estimation of an asset's value, whether real or financial, based on variables
perceived to be related to future investment returns, on comparison with similar assets, or, when
relevant, on estimates of immediate liquidation proceeds (Pinto, Henry, Robinson, Stowe; 2010).
Correct valuation of real assets can present challenges to financial analysts. Different models can be
used to arrive at the closest estimate of value and yet certain issues will always arise. This case
attempts to tackle two approaches in real asset valuation: Discounted Cash Flow (DCF) analysis and
the issues surrounding such, as well as the Black–Scholes Model for Real Options. Questions to be
addressed in the study are:
1. Evaluate Amoco's and ... Show more content on Helpwriting.net ...
Profitability of oil companies declined due to low prices; and most of these firms responded with
cost–cutting measures. Many top companies divested their marginal properties, seeking to
consolidate and rationalize their productive assets– one of which was Amoco Corporation. Amoco
Corporation conducted an extensive review of its cost structure and profitability (p.2), leading to
major restructurings to better focus on its core businesses. The result of this was a divestment of the
middle section of its assets along marginal curve. Morgan Stanley advised and assisted in the
process, creating MW Petroleum Corporation – a new, free–standing exploration and production oil
and gas company. MW was offered to a number of targeted international petroleum concerns, but
the most attractive offer came from Apache Corporation. Apache Corporation was an independent
oil and gas company based in Denver, Colorado engaged in exploration, development, and
production of oil and natural gas. Their strategy, "rationalize and reconfigure" involves acquiring
producing properties whose operations Apache could quickly control and make more efficient,
producing significant cost–saving opportunities for the company. The sale of MW Petroleum
provides such an opportunity for them. However, Apache must first carefully evaluate MW's value
to come up with a proposal that would be attractive for Amoco and profitable for Apache as well.
CRITICAL ANALYSIS
1. Evaluate Amoco's and Apache's corporate

Mcdonalds Stock Valuation
12/10/12 BMGT 443 McDonalds Valuation Project Write Up To begin the economic analysis of
McDonalds, we must first look at the company beta. McDonalds has a beta of .34 meaning it is not
as volatile when compared to the market and can be categorized as a low risk stock. To determine
that financial impact of changes in economic conditions to the performance McDonalds, three
economic indicators must be evaluated. The leading economic index (LEI), coincident economic
index (CEI), and lagging economic index (LAG), are constructed to summarize and reveal common
turning point patterns in economic data in a clearer and more convincing manner than any individual
component. The LEI are indicators that change before the economy as a ... Show more content on
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A new chain could provide McDonalds with some competition, but with McDonalds place in the
market we believe the chances of that occurring are low. Supplier power will remain the same (1.5)
as new suppliers and cheaper methods of supply are likely over the next few years. The buyer power
will also remain low (1.5) as we do not foresee any changes in McDonalds already cheap prices. We
do believe the threat of substitutes will rise (4.5). There is heavy pressure on healthy foods and we
only believe that will rise. Healthy options will be advertised more and people will continue to push
healthier eating. The rivalry of the industry will remain high (4.5). This will rise as the threat of new
companies and new companies trying to be healthier than the competition. McDonalds is
everywhere, and will remain so over the next few years, pushing its overall advantages even higher.
The ROIC is used to assess McDonalds' efficiency at allocating the capital under their control to
profitable investments. Additionally we can examine the ROIC to see how McDonalds is doing
compared to the industry. Over the companies past fiscal year, McDonalds had an ROIC of 21.49%
and a WACC of 6.51%. We can compare this to the industry average ROIC of 22.59% and the
industry average WACC of 7.49%. In briefly comparing both spreads it does not show McDonald's
having a competitive advantage in the industry, as the spreads are nearly

Improvements in Water Quality
In Malawi the major sources of water for both domestic and industrial use include lakes, rivers and
ground water. Ground water is dependable for supplying water in rural areas and also in some urban
areas even though this source of water is most common in the rural areas. In some urban areas, the
major source of water are rivers. According to Government of Malawi (2010), many river basins are
under severe pressure resulting from deforestation, settlements, climate change, industry, mining,
commerce and unsustainable agriculture. These have consequently impacted negatively on the water
quality mainly due to sediment loads, industrial wastes, chemicals from agriculture and proliferation
of aquatic vegetation. In urban areas, especially areas with high concentration of people, the major
problem has been management of waste disposal. This has resulted in plastics that are just littered
anyhow in the major urban areas including Blantyre ending up in rivers. Ground water though
viewed as one of the safe sources of water, there are also a number of quality issues that are
associated with it. According to Government of Malawi (2010), some of the issues include high
concentrations of minerals such as fluoride, nitrates especially in agricultural areas, manganese and
fecal matter in some areas. All in all, these issues make ground water quality to be degraded too. It is
clear from above that improvements in water quality are no longer evitable. Failure to doing this

Fair Value
Case analysis: Classification of instruments in fair value hierarchy
Instrumental 1
In the case, there was a significant decrease in the volume and activity for the instrument because of
(1) significant widening of the bid–ask spreads in the markets and the widening continued
throughout Q4 2012 (2) a significant decrease in the volume of trades comparing with historical
level in Q4 (3) no recent transactions. According to 820–10–35–54–c, it was reasonable to
determine that market is not active. Because the adjustments were based on management's
assumption, FFC didn't used level 1 inputs in the income approach valuation technique (present
value technique). In addition, significant adjustment inputs includes credit adjustment (level 3 ...
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Then, FFC changed its valuation technique from market approach to income approach (discounted
cash flow model). Most relevant inputs in this model were level 3 inputs, because they were
estimations and assumptions that were not market based. In other words, such inputs were not
observable. So, FFC should classify the ARSs into level 3 of the fair value hierarchy in the fourth
quarter.
Instrument 4
There were no quoted prices available for X' stock, so the measurement did not belong to level 1 of
the Fair Value Hierarchy. In addition, because Most of X's competitors are either privately held or
subsidiaries of larger publicly traded clothing retailers and the shares of the two similar two
companies are thinly traded in an observable market, the market is inactive. FFC also needed some
significant assumptions to forecast its cash flows. These assumptions were level 3 inputs in
accordance with ASC 820–10–55–e. In the case, FFC should use the multiple techniques and weight
more market approach than income approach, because (1) general valuation principle is maximizing
the use of relevant observable inputs and minimizing the use of unobservable inputs (2) sufficient
data could be used to support both the approaches (3) market participants used multiple techniques
to invest similar stock. So, under ASC 820–10–35–37A, FFC should category the investment into
level 3 of the fair value hierarchy, in which the lowest level significant inputs are.

Basic Financial Concepts and Pinkerton
Executive Summary. Wathen is attempting to value the proposed acquisition of Pinkerton in an
effort to determine whether bids of $85 million to $100 million is value enhancing for CPP's
shareholders. Additionally, Wathen must choose between two financing options: (1) raising $100
Million via a $75 million debt structure at 11.5% interest rate together with a $25 million equity
investment for a 45% stake in the combined company and (2) a $100 million debt facility at 13.5%
interest rate. General Assumption. We assumed that Wackenhut is comparable to Pinkerton, and
therefore that Wackenhut's asset beta reflects that of Pinkerton. Additionally, we assumed that
Pinkerton's bond rating is A. As such, we assumed a debt service ratio for ... Show more content on
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With the synergies expected, the value to CPP increases by $14.6 Million (see exhibit 4). Generally
for the particular small firms to maintain rating of A, the firms have to maintain a debt service ratio
of 6. Hence it is practical to assume interest coverage ratio of 6.0x in the long term for Pinkerton in
this case. Pinkerton gets benefit from 34% tax shield, which account for the value of $15.4 Million
(see exhibit 5). Therefore, as calculated in exhibit 6, the total value of Pinkerton from 3 sources to
CPP in expected case is $119.7 Million. This is higher than the $100 million asking price.
Financing: Free cash flow after debt service is still positive in both options. For the value to existing
shareholder, as option 1 CPP gives premium of $15.2 Million over $25 Million for 45% stake of
CPP to investors, option 2 of $100 Million Debt would be more preferable. Pessimistic Case
Valuation: We then perform the valuation exactly the same method as expected case. The value of
Pinkerton with less gross margin and more working capital needed is $67.1 Million (See exhibit 9
for 5 years valuation and exhibit 10 for terminal value). With lower performance, the value of 34%
tax shield is also lower to $10.8 Million (see exhibit 12). Without any additional incremental value
to CPP (exhibit 11), total Pinkerton value from 3 sources is $77.9 Million (exhibit 13), which is even
less than the original proposed value of $85 Million from Wathen. Financing:

Requirements For Accounting Of Business Combinations
1. Exclusions of AASB 3 AASB 3 has defined business and business combination in appendix A as:
A business is an integrated set of activities and assets that is capable of being conducted and
managed for the purpose of providing return in the form of dividends, lower costs or other economic
benefits directly to the investors or other owners, members or participants. A business combination
is a transaction or other event in which an acquirer obtains control of one or more business. AASB 3
applies to all the general form of business combinations but exclusions are:  If the business
combination results in the formation of the joint venture then such business combinations are
exclusions from the scope of AASB 3  If the business combination involves business under
common control then also such business combinations are exclusions from scope of AASB 3  If
the acquisition of assets that do not constitute a business then such combinations are exclusions
from the scope of AASB 3 2. Requirements for Accounting of Business Combinations AASB 3 has
set standard method of accounting for any business combination, which requires application of the
acquisition method and involves the following steps: 1) Identifying the acquirer One of the entities
in business combination must be identified as acquirer where an acquirer is the entity that obtains
the control of acquiree. 2) Determining the acquisition date It is the date at which the acquirer
obtains the control of the acquiree that

CPI: The Stock Valuation
The price/earnings ratio is another means by which a company can be valued. The principle is that
companies of a similar structure, industry and growth rates should have relatively similar valuations
in the market. Price/earnings ratios tend to be higher in bull markets, and lower in bear markets
(Loth, 2012). However, these trends should be roughly the same for all competitors within an
industry, assuming that their risk level is roughly the same. The P/E ratio for Procter & Gamble is
19.70, for Colgate–Palmolive it is 19.93 and the P/E for Unilever ADRs is 21.06. For Johnson &
Johnson it is 17.86. This is a fairly narrow range, and the closer that CPI is to these companies the
closer it should be in terms of its P/E. CPI's price/earnings ratio is 14. The beta for P&G is 0.44, it is
0.43 for Colgate–Palmolive and for Unilever ADRs is 0.78. For Johnson & Johnson it is 0.53 (MSN
Moneycentral, 2012). Some of the disparity for Unilever may be because the company reports in
euros, so there is some translation risk that creates more variability in that stock on the US
exchange. CPI has revenue of $200 million and a regional US presence. This is significantly
different from our competitors. Procter and Gamble has sales of $85.14 billion, Colgate–Palmolive
sales of $16.73 billion, JNJ $65 billion and Unilever $61.12 billion. Additionally, these are global
companies, especially P&G and Unilever. All three have much wider product lines and greater
diversification than does

Stock Valuation Walmart
Stock Valuation Project
Wal–Mart Retail begins. Before opening Wal–Mart, Sam Walton, traveled the United States to study
everything he could about discount retailing. Walton became convinced that American consumers
wanted a new type of store. With this vision Walton and his wife Helen placed 95 percent of the
capital for their first Wal–Mart store in Rogers, Arkansas. Within five years, the company expanded
to 24 stores across Arkansas and reached $12.6 million in sales; in 1968 it opened its first store
outside of Arkansas in Sikeston, Missouri and, Claremore Oklahoma.
Wal–Mart specializes in the operation of merchandise stores. It began trading stock as a publicly
held company on October 1, 1970. In 1972 stock was offered for the ... Show more content on
Helpwriting.net ...
Second the company operates under a very advance information technology. Wal–Mart is able to
manage its products around the whole world and enables their management staff to take quick
effective decisions. Towards his stock valuation, historical prices determine that Wal–Mart's stock is
a relative stable investment; the stock is built for long term investments.
The economic downturn, which started in 2000, continued throughout 2001 and it resulted in one of
the most unpleasant years for US retailers. However, in 2001, traditional retailers found themselves
at the advantage of becoming dominant online retailers. But high unemployment rate (about 400,000
lost jobs in 2001) pushed down potential sales as consumer spending was severely affected.
Wal–Mart has several competitive advantages against its competitors (such as
Target, Kmart, Costco and other smaller retailers,
1. Wal–Mart has a very ambitious stores expansion plan.
2. Wal–Mart also has extensive experience in procurement (logistics) and information systems.
These two important factors enable Wal–Mart to lower its cost of sales and provide lower prices to
its customers.
3. Smaller retailers would encounter some problems regarding higher rate of rent on shops, where it
does not affect Wal–Mart in this area.
4. Wal–Mart also offers its products online. Wal–Mart possesses critical advantage in this area,
because it has solid background in retail industry.
The

Food for Thought
Case 11–7:
Food for Thought
The Audit Committee of the Board of Directors of Allfoods Corporation:
Allfoods Corp. acquired 80% of the outstanding common stock of Baked Beans Corp in a business
combination on February 1, 2009. Allfoods paid $40 million in cash and issued two million shares
of Allfoods common stock to the selling shareholders of Baked Beans. Allfoods stock options will
replace all outstanding stock options granted to Baked Beans employees as required by the merger
agreement. This transaction has been accounted for in accordance with ASC 805, Business
Combinations.
We have determined that consideration transferred amounts to $135 million, land and buildings
should be recorded using the "in–use" valuation ... Show more content on Helpwriting.net ...
ASC 805–30–30–11 further clarifies that a replacement award that is part of the consideration
transferred in exchange for the acquiree equals the portion of the acquiree award that is attributable
to pre–combination service. Any portion of replacement award that relates to post–combination
service should be recorded as compensation cost.
Acquisition Cost
ASC 805–10–25–23 indicates that acquisition related costs shall account as expenses in the period
in which the costs are incurred and received. However, cost to issue debt or equity securities shall be
recognized in accordance with other applicable GAAP. In our case, we assume that acquisition cost
is not allocated for issuing debt or equity securities.
After critical examination of the related standards, we conclude that cash, common stock, contingent
consideration and replacement stock option awards attributable to pre–combination services should
be considered to determine consideration transferred. As a result, total consideration transferred is
(in million)
Cash $ 40
Common Stock (2*35) $ 70
Contingent Consideration $ 20
Pre–combination service stock option awards $ 5
$135
Highest and Best Use
ASC 820 requires that the measurement of fair value of assets acquired and liabilities assumed
should be based on the

Mergers & Acquisitions: The Case of Microsoft and Nokia...
Mergers & Acquisitions: The Case of Microsoft and Nokia Luís Franco Hilário Advisor: Peter
Tsvetkov Dissertation submitted in partial fulfillment of requirements for the degrees of MSc in
Business Administration, at the Universidade Católica Portuguesa SEPTEMBER 2011 1 Abstract
Due to the financial downturn and the emergence of new devices in the global handset market has
led companies to change their business strategies. Indeed, Mergers and Acquisition are considered
one of the best strategies to increase shareholder value despite its hardship to be well–implemented.
For this reason, a consolidation between Microsoft and Nokia may create new opportunities to
challenge the market. Thereby, the focus of this ... Show more content on Helpwriting.net ...
28 2.3.
Conclusion..................................................................................................................................... 30 3.
INDUSTRY AND COMPANY ANALYSIS ....................................................................31 3.1.
Overview of the Global Mobile Industry ....................................................................................... 31
3.1.1. Current Market Trend – "The emergence of the tablets" .........................................................
37 3.1.2. Technology market growth opportunities in Asian economies
................................................. 38 3.2 Microsoft
Corporation.................................................................................................................... 39 3.2.1.
Windows and Windows Live Division ...................................................................................... 42
3.2.2. Server and Tools ..................................................................................................................... 43
3.2.3. Online Services Division ..........................................................................................................
45 3.2.4. Microsoft Business Division
..................................................................................................... 46 3.2.5. Entertainment and Devices
Division

Valuation of Integrated Oil & Gas Companies Msc Thesis
MSc Thesis: Valuation of Integrated Oil & Gas Companies
Irakli Menabde
Valuation of Integrated Oil & Gas Companies
A comparative analysis of methodologies and empirical practices
MSc Thesis
MSc in International Business and Economics: Cand. Merc Finance and Strategic Management
(FSM) Copenhagen Business School
Date 09/10/2008 Author: Irakli Menabde
MSc Thesis: Valuation of Integrated Oil & Gas Companies
Irakli Menabde
Abstract
The paper examines a number of empirically utilised and academically established valuation
methodologies in order to value Integrated Oil & Gas Company's common stock. By applying and
comparing DCF, SOP and Real Options based valuation methodologies with the aims of establishing
both, an ... Show more content on Helpwriting.net ...
EMPIRICAL ANALYSIS.......................................................................................................40 4.1
DCF OUTPUT AND DISCUSSION.................................................................................................40
4.1.1 BP Plc DCF Model.......................................................................................................42 4.1.3
DCF Models Robustness Tests.....................................................................................44 4.2 SUM OF
THE PARTS VALUATION ................................................................................................49 4.3
REAL OPTIONS VALUATION.......................................................................................................50
4.4 ECONOMETRIC
TESTS................................................................................................................55 4. CONCLUSIONS

Accounting And Financial Methods And Tools
Firm valuation relates to accounting in that it uses a combination of both accounting and financial
methods and tools. Some of the accounting tools used includes the valuation of firms' assets,
valuation of a firm's profit and loss and also the valuation of a firm's obligations, which are
liabilities. Just like accounting, firm valuation process follows defined steps so as to arrive at the
correct value of the firm that is free from errors. "There are five steps involved; preparation and
planning, adjusting the financial statements, choosing the business valuation methods, applying the
selected valuation method and finally reaching the firm valuation conclusion." (Candon, 78). On the
first step, the most valuable thing is to determine the ... Show more content on Helpwriting.net ...
"After the determination of how and under what conditions of measuring the firm's value, the next
step is the gathering of relevant data and information that impacts the firm value." (Howard, 97).
Such data include; steady earnings above the industry norm, good marketing plans, skilled and
motivated staff, and well documented financial and accounting statements and well detailed business
procedures that are written down.
Some of the gathered data such as the firm's historical financial statements are adjusted so as to
prepare the inputs required for the firm's valuation methods and hence it leads us to the second step.
The main financial statements required for the firm's valuation are the income statement and the
balance sheet that are produced by the accounting process. This further shows the relationship
between firm valuation and accounting. The best way to value a firm with a historical approach
would be looking at the historical statements, income statement and balance sheet. Smaller firms
should be looked at the last three to five years while larger firms should have a longer period to
check. Due to the fact that, business owners have considerable discretion in how they use the firm's
assets and also what expenses and income they recognize, this rise the need to adjust the firm's
historical records. Constructing an accurate relationship between the required firm's assets and

Stock Valuation Analysis
Stock Valuation
The value of a company's stock may entice an investor to offer money. Without knowing the proper
value of stocks, investors are hard–pressed to find the right time to buy or sell shares; and investors
may miss opportunities solely on the stock's market value (Zacks, n.d.). The following sections shall
(1) calculate the Company's SV based on its dividends*; and (2) discuss both those calculations'
effect on shareholder value* and the Company's dividend policies.
Calculations
To begin the calculations, the data points of cash dividend* per share, dividend yield*, and the
stockholder's equity* from the Company's FY2012–14 financial statements are required. To obtain
the dividend yield, the following equation shall be ... Show more content on Helpwriting.net ...
Keeping the Company's goal of maximizing shareholder value in mind, the best option based on the
aforementioned calculations is for the Company to increase dividend per share by $1.75. A crucial
source for increases in a business's dividend per share payout is a swing in growth strategy leading
to the business's decision to expend less of its earnings in seeking growth and expansion, thus
leaving a greater segment of profits available to be given to investors in the form of dividends
(Maverick, 2015). The uptick in dividend per share gives an investor more "bang for their buck" as
it ultimately affects the ROI. Further, this is apparent when comparing recalculated ROI. In Table 3:
ROI Comparisons, ROI #1 represents the ROI based on actual dividends per share; ROI #2
represents the recalculation based on the $1.75 increase.
Table 3: ROI Comparisons
Fiscal Year (FY) ROI #1 ROI #2 % Increase
2012 1.67% 3.42% 205%
2013 1.71% 3.46% 203%
2014 2.24% 3.99% 178%
Based on the comparison, the increased dividend per share clearly supports the idea of shareholder
maximization, while the other options are not as supportive.
Dividend Policies
The Company has noted that, in addition to making disciplined decisions regarding capital
allocations, focus has been maintained on expense control, resulting in higher returns on invested
capital and allowing for a return of value to shareholders through $7.0 billion in share repurchases
and $2.5

Valuation Of Common Stock
Valuation of Common Stock
Ashok Banerjee
Common (Equity) Stocks
Because common stock never matures, today's value is the present value of an infinite stream of
cash flows (i.e., dividend).
But dividends are not fixed.
Not knowing the amount of the dividends–or even if there will be future dividends– makes it
difficult to determine the value of common stock.
So what are we to do?
Valuation Models
Dividend Valuation Model (DVM):
– Constant dividend: Let D be the constant
DPS:
The required rate of return (re) is the return shareholders demand to compensate them for the time
value of money tied up in their investment and the uncertainty of the future cash flows from these
investments.
Valuation Models
Dividend growth at a ... Show more content on Helpwriting.net ...
This will provide investors with a 15% expected return.
Instead, we decide to plow back 40% of the earnings at the firm's current return on equity of 25%.
What is the value of the stock before and after the plowback decision?
Valuing Common Stocks
Example
Our company forecasts to pay a $8.33 dividend next year, which represents 100% of its earnings.
This will provide investors with a
15% expected return. Instead, we decide to plow back 40% of the earnings at the firm's current
return on equity of 25%. What is the value of the stock before and after the plowback decision?
No Growth

8.33
P0 
$55.56
.15
With Growth
g .25 .40 .10
5.00
P0 
$100.00
.15  .10
Example – continued
If the company did not plowback some earnings, the stock price would remain at $55.56. With the
plowback, the price rose to $100.00.
The difference between these two numbers is called the
Present Value of Growth Opportunities (PVGO).
PVGO 100.00  55.56 $44.44
Present Value of Growth Opportunities
(PVGO) – Net present value of a firm's future investments.
Sustainable Growth Rate – Steady rate at which a firm can grow: plowback ratio

Elounda Company Case Summary
7 (an) (i) Substantive strategies for revaluation of property, plant and hardware (PPE)
– Obtain a calendar of all PPE revalued amid the year and cast to affirm fulfillment and exactness of
the
revaluation conformity and consent to trial adjust and monetary explanations.
– Consider the ability and capacity of the valuer, Martin Dullman, by evaluating through enquiry his
capability, participation of an expert body and involvement in esteeming these sorts of benefits.
– Consider whether the valuation embraced gives adequately target review confirm. Talk about with
administration whether Martin Dullman has any monetary enthusiasm for Elounda Co which
alongside the family
relationship could have affected his freedom.
– Agree the ... Show more content on Helpwriting.net ...
– Enquire of the attorneys of Elounda Co with regards to the presence of suit and claims; if any
exist, then consider their
materiality and effect on the going concern premise.
– Perform review tests in connection to consequent occasions to recognize any things which may
show or alleviate the danger of
going concern not being suitable.
– Review the post year–end board minutes to recognize some other issues which may show
budgetary troubles for the
organization.
– Review post year–end administration records to survey if in accordance with income conjecture

and to distinguish any issues which
might be important to the going concern evaluation.
– Consider whether any extra divulgences as required by IAS 1 Presentation of Financial Statements
in connection to
material vulnerabilities over going concern ought to be put forth in the money related expressions.
– Obtain a composed representation affirming the executives' view that Elounda Co is a going

Stock Valuation
LECTURE
STOCK VALUATION 1. Common stock valuation A share of common stock is more difficult to
value in practice than a bond, for at least three reasons. First, with common stock, not even the
promised cash flows are known in a advance. Second, the life of the investment is essentially
forever, since common stock has no maturity. Third, there is no way to easily observe the rate of
return that the market requires. Nonetheless, as we will see, there are cases in which we can come
up with the present value of the future cash flows for a share of stock and thus determine its value.
Cash Flows Imagine that you are considering buying a share of stock today. You plan to sell the
stock in one year. You somehow know that the ... Show more content on Helpwriting.net ...
From Chapter 6 (Example 6.7), we know that the dividend on a share of preferred stock has zero
growth and thus is constant through time. For a zero growth share of common stock, this implies
that: D1 = D2 = D3 = D = constant So, the value of the stock is:
|P0= |
If the dividend grows at a steady rate, then we have replaced the problem of forecasting an infinite
number of future dividends with the problem of coming up with a single growth rate, a considerable
simplification. In this case, if we take D0 to be the dividend just paid and g to be the constant
growth rate, the value of a share of stock can be written as:
|P0= |D1 |+ |D2 |+ |D3 |+... | |
| |(1+R)1 | |(1+R)2 | |(1+R)3 | | |
|= |D0(1+g)1 |+ |D0(1+g)2 |+ |D0(1+g)3 |+... | |
| |(1+R)1 | |(1+R)2 | |(1+R)3 | | |
As long as the growth rate, g, is less than the discount rate, r, the present value of this series of cash
flows can be written very simply as:
|P0= |D0(1+g) |= |D1

Cox et al. in 2006 (Cox, 2006) concluded that the...
Cox et al. in 2006 (Cox, 2006) concluded that the perception of crowding in passenger rail is created
from an "interplay of cognitive, social and environmental factors, whereas density refers to objective
physical characteristics of the situation." Similarly, there is enough literature available that
establishes the fact that crowding is not just dependent on physical density but also on various
physical antecedents, interpersonal factors, individual characteristics and modifiers (Sundstorm,
1978). Culture also plays a role in the perception or tolerance of crowding. Evans et al. (2000) found
that residential crowding has a negative effect in terms of psychological distress across different
cultures; Mexican Americans and Vietnamese ... Show more content on Helpwriting.net ...
(6) Risk (safety and public health), which is strongly related to the perceived cleanliness of the
carriage environment, especially the holds and the seat coverings. (7) Emotion–the perception and
tolerance of crowding is influenced by a passenger's emotions prior to embarkation. (8) Behaviour
of fellow passengers (e.g., loud phone conversations, the odor of unclean passengers, noisy school
children, and a general lack of etiquette), which would also exaggerate crowding." (Zheng Li, 2013).
"With regard to the subjective dimension of crowding, two measures are used to capture it in the
literature. (i) How crowded people feel, and (ii) how crowded people rate sitting Factor analysis
suggested that two crowding measures are conceptually different, where the feel crowd item (i.e.,
how crowded people feel) is associated with perceived density, constraint, distraction, and stress,
while the environmental rating item (i.e., how crowded people rate seating) is loaded only with
perceived density. The former is more sensitive to changes in physical density than the latter"
(Zheng Li, 2013).
(Mahudin, 2012), developed a 3 scale instrument where rail users in UK were asked the following
questions – (1) Evaluation of the psychosocial aspects of the crowded situation–"How crowded is
the train that you are on today?"
(2) Affective reactions to the crowded situation–"How do you feel inside the train that you commute
on today?"
(3) Evaluation of the ambient environment of the

Crocs, Inc. Case Study Report Essay
THE GEORGE WASHINGTON UNIVERSITY CROCS, INC. Case Study Report
¹
SUBMITTED TO PROF. NEIL COHEN School of Business and Public Management The George
Washington University
BY Anil Kumar Cheerla
FINA 6224 FINANCIAL MANAGEMENT
WASHINGTON, DC January 26, 2011
Q1: Consider which comparable peers are good matches and use them to perform a multiples
analysis, calculating and defending an estimate of Crocs value. Soln: Comparable companies
analysis – Done to determine appropriate valuation multiple for Crocs, Inc. Selected peer group
based on industry, business and financial characteristics Included explosive growth stocks such as
Lulelemon & Under Armour having similar prospects for growth and ROIC as Crocs, Inc. and some
... Show more content on Helpwriting.net ...
Also past performance is not always reflective of future performance, so any change in the dynamics
will throw off out valuation. The impact of other influential factors such as dividend payout, growth,
discount rate and beta are not considered. The question, Will Crocs maintain such explosive
sustainable growth in the future is subject to high uncertainty and tremendous risk?
Q2: Use the FCF Valuation Template below to modify the analysis in the case, Ex. 6 (incorrectly
labeled Ex. 5), calculating and defending an estimate of Crocs value. Soln: The preferred method to
determine a company's going–concern value by adjusting for risk and time. Simply put, the value of
equity = value of firm – value of debt. So to find the intrinsic or fair values of Crocs, the forecast
numbers from exhibit 6 were plugged into the provided template and appropriate entries from the
balance sheet and income statement were entered. Assumptions: The depreciation and amortization
amounts, capital expenditures were pulled directly from exhibit 6 assuming them to be incremental.
Other assumptions include the discount rate at 10.96%, the long–term growth at 6%, and market
value of debt as zero and no redundant assets. The firm will have perpetual growth after 4 years at a
rate of 6%. The free cash flows along with terminal value calculated are listed below:

Fig4. Free cash flows
The terminal value is calculated as a perpetuity from 2012 and

Duration Hedging
5
Hedging Interest–Rate Risk with Duration
Before implementing any kind of hedging method against the interest–rate risk, we need to
understand how bond prices change, given a change in interest rates. This is critical to successful
bond management. 5.1 Basics of Interest–Rate Risk: Qualitative Insights
The basics of bond price movements as a result of interest–rate changes are perhaps best
summarized by the five theorems on the relationship between bond prices and yields. As an
illustration
(see Table 5.1), let us consider the percentage price change for 4 bonds with different annual coupon
rates (8% and 5%) and different maturities (5 years and 25 years), starting with a common
8% yield–to–maturity (YTM), and assuming ... Show more content on Helpwriting.net ...
We can state this principle as (other things equal): bond price fluctuations (volatility) and bond
coupon rates are inversely related. Note that we are talking about percentage price fluctuations; this
relationship does not necessarily hold if we measure volatility in terms of dollar price changes rather
than percentage price changes.
These principles lead to the practical conclusion that the two bond variables of major importance in
assessing the change in the price of a bond, given a change in interest rates, are its coupon and its
maturity. This conclusion can be summarized as follows: A decline (rise) in interest rates will cause
a rise (decline) in bond prices, with the maximum volatility in bond prices occurring in longer
maturity bonds and in bonds with low coupons. Therefore, a bond buyer, in order to receive the
maximum price impact of an expected change in interest rates, should purchase lowcoupon, long–
maturity bonds. If an increase in interest rates is expected (or feared), investors contemplating their
purchase should consider those bonds with large coupons or short maturities, or both.
These relationships provide useful information for bond investors by demonstrating how the price of
a bond changes as interest rates change. Although investors have no control over the change and
direction in

Balance Sheet and Value
Learning Goal 6:
Explain the relationships among financial decisions, return, risk, and the firm's value.
1)
Any action taken by the financial manager that increases risk will also increase the required return.
True or False 2)
In common stock valuation, any action taken by the financial manager that increases risk will cause
an increase the required return. True or False 3)
In common stock valuation, any action taken by the financial manager that increases risk will cause
an increase in value. True or False 4)
An action on the part of a firm that increases the level of expected cash flows without a
corresponding increase in risk should reduce share value; An action that reduces the level of
expected cash flows without a ... Show more content on Helpwriting.net ...
True or False 6)
The book value per share of common stock is the amount per share of common stock that would be
received if all of the firm's assets were sold for their accounting value and the proceeds remaining
were divided among common stockholders. True or False 7)
________ is the value of the firm's ownership in the event that all assets are sold for their exact
accounting value and the proceeds remaining after paying all liabilities (including preferred stock)
are divided among common stockholders. A)
Liquidation value B)
Book value C)
The P/E multiple D)
The present value of the common stock 8)
________ is the actual amount each common stockholder would expect to receive if the firm's assets
are sold, creditors and preferred stockholders are repaid, and any remaining money is divided among
the common stockholders. A)
Book value C)
The P/E multiple D)
The present value of the dividends 9)
________ is a guide to the firm's value if it is assumed that investors value the earnings of a given
firm in the same way they do the average firm in the industry. A)
Book value C)

The P/E multiple D)
The

Advantages Of Valuation And Strategy Analysis
1. Title of the study
Valuation and strategy analysis of Shriram Transport Finance Company Limited (STFC)
2. Objectives
The main objective of this study is to provide a perspective of what might be the equity value of this
company considering its prospects of growth, risk and position in the market from an academic
standpoint alone. The strategic competitive advantages of STFC would be broadly assessed as part
of the study however valuation of STFC forms the main objective of this study.
3. Rationale for the study (must also cover review of relevant literature and should be about 250
words)
Established in 1979, Shriram Transport Finance Company Limited (STFC) is one of India's largest
asset financing Non–Banking Finance Company, and has played ... Show more content on
Helpwriting.net ...
Internal analysis of STFC structure and performance
Literature review of relevant valuation methods and related issues with the same
Valuation under various methodologies such as Dividend discount model, relative valuation model,
along with listing the assumptions used in determining the same
Comparison of results with that of a select Investment bank/Global equity research house

Stock Price Valuation and Beta Calculation
There are many choices in the market for the investors to generate more money and income with the
capital that they able to invest. These tools are categorized into many different types of market such
as equity market, bond market, and mortgage market, according to their characteristics. The markets
are well–growing and establishing all around world due to the people's awareness of investment, the
globalization, the governments' policies, and the change of technology. Equity market is one of the
well performing markets. The companies raise fund from the public by listing themselves in the
stock exchanges. Such objective can be done by distributing the common stock, preferred stock, and
convertible securities. The voting rights, priority ... Show more content on Helpwriting.net ...
The price is expected to increase in future as well. The investors can have the dividends and gain the
price appreciation of stock at the same time. Furthermore, Genting Berhad has been established for
50 years and it is under the Genting Group, which doing international businesses and has well
performance. The investors' confidence level and expectation towards the company's performance is
high.
Besides, the rate to compensate the risks is set at the low rate. The paper manufacturing and
electricity power generation and supply businesses will not affect much of the company's
performance. The company provides the electricity supply to the Tenaga Nasional Berhad with the
set price and demand. Next, raw material for paper manufacturing is the recycle paper that collected
in the nation, from another Genting Group's company (Genting, n.d.). The international pulp price
will have little effect on its cost of production. However, the unstable international price of crude
palm oil will heavy affect the company's profitability in the production. But the heavy demand from
China and India and the prediction of lower soy oil supply will support the price and it is tend to
increase (The Star Online, 2012). Therefore, the lower rate of 1.5% is given to the stock.
Beta Calculation Next, the diversification is the idea of "not putting all of your eggs in one basket".
The investors can decrease the risks of their investments by

Questions On Stock Valuation Of Different Companies
A. Introduction
This document is about understanding and implementing the fundamental analysis in practical while
studying its implications for the purpose of stock valuation of different companies.
In this study, fundamental analysis is performed for the stock valuation of a renowned oil and gas
sector company named British Petroleum PLC (hereinafter referred to as "BP").
To perform fundamental analysis of the stock of BP, various qualitative and quantitative factors are
discussed and analyzed in detail. These include studying business model and governance structure
of BP as well as financial analysis of its financial statements. Overall, economy and industry
analysis is also performed to aid the study.
Finally, based on the analysis ... Show more content on Helpwriting.net ...
It has a vide customer base. It holds a sizeable market share as compared to its competitors.
Competition is restricted in Oil and Gas industry by OPEC. The industry also faced strict health and
safety requirements and has to observe stringent exploration and production rights regulations.
The core business model of BP involves the exploration of oil and gas resources. It has a very strong
and efficient business model that is highly attractive for potential shareholders.
BP is involved in research in collaboration with many universities hence gaining advantage of latest
research and highly talented employees. It deploys it seismic imaging technology to enhance the
data analysis and productivity of its projects. BP has introduced world's first automated robot to
enhance its oil recovery hence providing more light oil to its customers. All these and few other
steps provided a great competitive advantage to BP.
BP showed a decline in Sales in 2014, which is mainly due to price collapse in the Oil and Gas
industry. It has reduced its short–term investments to improve cash flow. Due to the liabilities and
obligations of BP regarding Gulf of Mexico, oil spill its interest cost has significantly increased.
EPS of BP is also significantly decreased in 2014.It has also paid a good amount of dividend in 2014
which is a positive signal

What Are The Forecasting Needs Of A Seasoned Idea Start...
1. QUESTION: What are the forecasting needs of a seasoned idea start–up and a new idea start up?
Answer: Seasoned idea start–up and New idea start–up need to hold different types forecasting. A
new idea start–up needs a forecasting method based around location, market research, and product
material cost. A seasoned idea start–up requires a forecasting that revolves more around potential
market risk, potential, growth, and comparable products.
2. QUESTION: what are the external forces that we cannot control within a business?
Answer: Factors that we cannot control within a business is better known as External Forces.
Ventures require correct planning in order to be financed correctly. This entails a detailed plan an
entrepreneur hopes to carrying out, however, a minor external factor can be brought into the mix in
any moment that can change that plan drastically. An example of an external factor crippling certain
businesses is the housing bubble of 2008. Even if businesses had nothing to do with the real estate
market some of their businesses failed due to the fact that they could not gather finances to keep
their doors open and business running. External factors are not just limited to economic downturns,
however, they include factors such as laws and regulations and trends. If your product or service
becomes highly regulated, then laws and regulations are a major external factor. Trends also lead to
major external forces for businesses because if their product or service

FASB Codificiation Essay
November 3, 2013
Accounting 305
FASB Codification
1. The relevant FASB codification standards are as follows...
1. 350 Intangibles – Goodwill & Other
1.2 20 Goodwill
1.3 35 Subsequent Measurement
1.3.1 Overall Accounting for Goodwill (35.1–3)
1.3.2 Recognition & Measurement of Impairment Loss & Step 1 of the
Qualitative Assessment (35.3A–15)
1.3.4 Determine the Fair Value of a Reporting Unit (35.22–23)
1.3.5 Reporting Unit (35.33–38)
2. 280 Segment Reporting
2.1 10 Overall
2.2 50 Disclosure
2.3.1 Operating Segments (50.1–9)
2.3.2 Aggregation Criteria (50.11A–E)
2. There are several major issues that need to be taken into consideration between ABC's companies,
Dynamic and ZD.
Dynamic:
– It is a publicly ... Show more content on Helpwriting.net ...
If an entity has a recent fair value calculation for a reporting unit, it also should include as a factor in
its consideration the difference between the fair value and the carrying amount in reaching its
conclusion about whether to perform the first step of the goodwill impairment test."
2. Once it is established that the first step of the goodwill impairment test must be completed, the
following steps must be taken according to FASB codification section 350–20–35.4. The first step of
the goodwill impairment test is to, "compare the fair value of a reporting unit with its carrying
amount, including goodwill." The firm needs to complete steps 350–20–35.22–24 to determine its
fair value of its subsidiaries.

The outcomes of the first step of goodwill impairment test will be either that the carrying amount of
the reporting unit is greater than zero, that the carrying amount of the reporting unit is zero or
negative or that the carrying amount of a reporting unit exceeds its fair value.
In the event that the carrying amount of the reporting unit is greater than zero, then the second test
of goodwill impairment is unnecessary according to FASB codification 350–20–35.6. This is
because impairment of goodwill has been found to not be a condition in this result.
In the event that the carrying amount of the reporting unit is zero or negative, then step two is
necessary to

Usefulness and Reliability of Information Provided By...
An ongoing concern in financial reporting is the usefulness and reliability of information provided
by corporations. The financial accounting standard board defines usefulness as the information that
is useful for the users in decision making (FASB, 2011). Reliability is inferred when the information
is verified, objective, and can be relied on. Therefore, Statement of Financial Accounting Standards
No. 157 standardizes the valuation and disclosure of fair value for assets and liabilities in order to
achieve both usefulness and reliability. The reasoning for the hierarchy was due to the inconsistency
in previous definitions and guidance (FASB, 1992).
Introduction to Fair Value Hierarchy
To begin, SFAS defines fair value as the value ... Show more content on Helpwriting.net ...
SFAS Relating to the Conceptual Framework
The framework for measuring fair value is easy to understand and follow, and relates to the
conceptual framework. As stated earlier the preferred measure of fair value is the market approach,
because the prices are observable. For this reason the standard recognizes the need for relevant,
reliable, and comparable information in order for users to make better decisions about the current
financial position of a company. Financial readers are aware of the valuing measurement used to
calculate the fair value, whether the measurement were derived from an observable or unobservable
input. The measurement establishes the existence of reliable and relevance qualitative factors that
make accounting information useful for decision making (Barbera, 2007). If it were observable then
the value derived can be researched and verified. However, if it were unobservable then the user
must read the disclosures which will be discussed later in the research paper, and determine the
reliability of the internally generated measurement. In return it can be understood that the level 1
inputs are more reliable and relevant than the other two levels.
In addition, the fair value hierarchy also enhances the comparability and consistency of information
among companies due to following practices: all companies must

Evaluating The Valuation And Method Using Facebook Stock
Evaluate the valuation and method used to determine the Initial Public Offering value of Facebook
stock, indicating any miscalculations in the valuation that may have mislead potential investors and
how these errors may have been minimized. Provide support for your response.
The valuation and technique used to compute Facebook 's Initial Public Offering comprised of
various target and subjective components to decide the best gauge or the reasonable estimation of
their Class B basic stock. A few elements considered were late private stock deal exchanges;
verifiable money related results, assessed patterns, and prospects for Facebook 's future budgetary
execution. Extra elements were the execution and business sector position about contenders and
comparative traded on an open market organizations. Likewise the monetary and focused
environment, incorporating the business in which Facebook works; and free outsider valuations.
The mixes of money related and market–based techniques to decide business undertaking quality
were likewise used to compute Facebook 's IPO. The reduced income technique (DCFM) included
evaluating the future money streams for a specific period and marking down to present quality. The
markdown rate mirrors the dangers and the business sector rates of return accessible from option
ventures as of the valuation date. Another strategy was the rule open organization (GPCM), which
expect that like organizations in the same business, will have comparative

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