Project Finance

Project Finance
1. How should PDVSA finance the development of the Orinoco Basin? Can you define project finance? Is Petrozuata a project? What are the costs and
benefits of using project finance instead of the traditional (debt) finance – as Mr. Bustillos said, PDVSA could have finance the debt internally (p.7 of
the case)?
Project finance is a kind of Financing that has a priority does not depend on the creditworthiness of the sponsors proposing the business idea to launch
the project. Approval does not even depend on the value of assets sponsors are willing to make available as collateral. Instead, it is basically a function
of the project's ability to repay the debt contracted and remunerate capital invested at a rate consistent with the degree of ... Show more content on
Helpwriting.net ...
On the other hand, more debt does not affect the risk of the project under taken, but means less equity holders , these bring more risk to equity holders,
the cost of equity increases with debt. assume Ra is the WACC without leverage.
Ke=Ra+(D/E)(1–П„)(Ra–kd)
0.2097=Ra+Ra(0.6/0.4)(1–0.35)–0.1(0.6/0.4)(1–0.35)
Solving Ra=15.55%
When leverage change, the IRR will also change following the formula below:
IRR= Ra+(D/E)(1–П„)(Ra–kd)
LeverageD/ERa1–П„KdIRR
80%4.00 0.16 0.65 0.10 30.00%
70%2.33 0.16 0.65 0.10 23.98%
60%1.50 0.16 0.65 0.10 20.97%
50%1.00 0.16 0.65 0.10 19.16%
40%0.67 0.16 0.65 0.10 17.96%
4. What kind of debt (agency debt, bank debt, or Rule 144a bonds) should the sponsors of the project use to fund the deal? What are the advantages
and disadvantages of each kind of debt? In your view will project bonds receive an investment grade rating? What is the"weakest link" of the project?
How can they improve the likelihood of getting an investment grade?
In our opinion, the sponsors of the project should use Rule 144a bonds for its obvious advantages over the other two options.

Agency debt:
пѓјMight not raise enough money for the project since the majority of the debt would probably require
... Get more on HelpWriting.net ...

Finance
1. A financial analyst is responsible for maintaining and controlling the firm's daily cash balances. Frequently manages the firm's shortГўв‚¬'term
investments and coordinates shortГўв‚¬'term borrowing and banking relationships. FALSE
2. Finance is concerned with the process institutions, markets, and instruments involved in the transfer of money among and between individuals,
businesses and government. TRUE
3. Financial services are concerned with the duties of the financial manager. FALSE
4. Financial managers actively manage the financial affairs of many types of business–financial and non–financial, private and public, for–profit and
not–for–profit. False??
5. In partnerships, owners have ... Show more content on Helpwriting.net ...
TRUE
28. Liquidity preference theory suggests that for any given issuer, longГўв‚¬'term interest rates tend to be higher than shortГўв‚¬'term rates due to the
lower liquidity and higher responsiveness to general interest rate movements of longerГўв‚¬'term securities; causes the yield curve to be
upwardГўв‚¬'sloping. TRUE
Chapter 7
29. Holders of equity have claims on both income and assets that are secondary to the claims of creditors. TRUE
30. The tax deductibility of interest lowers the cost of debt financing, thereby causing the cost of debt financing to be lower than the cost of equity
financing. TRUE
31. Preferred stock is a special form of stock having a fixed periodic dividend that must be paid prior to payment of any interest to outstanding bonds.
FALSE

32. Cumulative preferred stocks are preferred stocks for which all passed (unpaid) dividends in arrears must be paid in additional shares of preferred
stock prior to the payment of dividends to common stockholders. False???
33. Preferred stock is often considered a quasiГўв‚¬'debt since it yields a fixed periodic payment. TRUE
34. The amount of the claim of preferred stockholders in liquidation is normally equal to the market value of the preferred stock. False???
35. Cumulative preferred stocks are

Essay on Finance
Finance Wikipedia's accurate definition of finance is "The activity of finance is the application of a set of techniques that individuals and organizations
(entities) use to manage their financial affairs, particularly the differences between income and expenditure and the risks of their investments" http:/
/en.wikipedia.org/wiki/Finance. I discuss the importance of keeping track and updating financial reports as well as simple bank statements. These are
just some of the essentials that I believe we all as a people should acknowledge. There are several detrimental problems concerning our finance as a
people and the side that I will be arguing throughout the duration of this paper is that we as African Americans do not recognize the... Show more
content on Helpwriting.net ...
If we really want to understand our finance and how it works, it is necessary for us to understand how the use of financial assets leads to the better
use of real assets. Do we as a people really understand how to levitate our finance? A Prominent tribulation involving finance and the Black culture is
establishing the know how of operating and dealing with financial situations. Understanding how the financial division works and how it is related to
the real sector is why anyone would study finance.
Many important personal decisions are financial. Paying for a home or an automobile are two very large examples, but even day to day decisions
such as planning a budget, opening a checking account, or making investments call for a knowledge of finance. This is a issue that I believe should be
discussed in any natural home, let alone the home of minorities.
Most of the time racially we take finance frivolously and this has become a vast distress on growing and raising children in our society. Learning
finance and relating to the history of it should be something that we try to incorporate in our teaching as Black parents. There should be a strong
emphasis set on the ability to receive credit cards from national companies to our Black children, instead of nonchalantly letting them keep the cards in
their possession to set themselves up for failure.
Debt is also a financial situation that our

Finance: Bonds
Managerial Finance
Chapter 5, Quiz
Name: Emily Smith
Multiple Choice: Please circle the correct answer choice
.Which of the following events would make it more likely that a company would choose to call its outstanding callable bonds? a.The company's bonds
are downgraded. b.Market interest rates rise sharply. c.Market interest rates decline sharply. d.The company 's financial situation deteriorates
significantly. e.Inflation increases significantly. .A 10–year bond with a 9% annual coupon has a yield to maturity of 8%. Which of the following
statements is CORRECT? a.If the yield to maturity remains constant, the bond's price one year from now will be higher than its current ... Show more
What is their yield to call (YTC)?
.Garvin Enterprises' bonds currently sell for $1,150. They have a 6–year maturity, an annual coupon of $85, and a par value of $1,000. What is their
current yield?
.Assume that you are considering the purchase of a 15–year bond with an annual coupon rate of 9.5%. The bond has face value of $1,000 and makes
semiannual interest payments. If you require an 11.0% nominal yield to maturity on this investment, what is the maximum price you should be willing
to pay for the bond?
.If 10–year T–bonds have a yield of 6.2%, 10–year corporate bonds yield 8.5%, the maturity risk premium on all 10–year bonds is 1.3%, and corporate
bonds have a 0.4% liquidity premium versus a zero liquidity premium for T–bonds, what is the default risk premium on the corporate bond?
.5–year Treasury bonds yield 5.5%. The inflation premium (IP) is 1.9%, and the maturity risk premium (MRP) on 5–year bonds is 0.4%. What is the
real risk–free rate, r*?
.Crockett Corporation 's 5–year bonds yield 6.85%, and 5–year T–bonds yield 4.75%. The real risk–free rate is r* = 2.80%, the default risk

Finance Paper
Assignment 1: Financial Research Report
Anthony Wilkins
Fin 534
August 30, 2015
Introduction
Toyota Motor Corporation is one of the most important automaker that has been operational since 1973, based in Japan. The company has gone global
and their operations are massive such that it trades in the New YorkStock Exchange (NYSE). The company started as a department of the human
resources that used to employ 317,734, before it become the biggest automobile due to the huge production that it used to make from the huge labour. It
was until the operations were now very stable that the automaker became globally known and being the largest conglomerate in the world. Toyota was
able to attain a high number of customers who were ... Show more content on Helpwriting.net ...
It is good for the investor to partake in dividends and this is very important as the returns on investment have been on the rise for the company and
the investor will gain much in return. A conservative risk taker will be sure to gain money from his investment over a long period of time; since,
taking conservative risk is the same as taking a bond that will bear fruits after along given period of time. Bonds are very useful as they avoid the
penny stock markets together with the stock exchange, which results in huge losses as well as high returns on the company's investments, thus the
ability to take low risks that they are certain about. Toyota Motor Corporation has a stock which is not for investors who want returns as soon as
possible, but it assures its investors that they will gain good returns at the very end (Furman, 2005). The reason as to why this company does not
trade in high volumes is due to the fact that the trading volumes do not in any way shore the active dealings and even its share prices are very high.
This company is very special for an investor who wants to invest in the stock market reason being that the risk taken is low and when the investment
returns pays off he will be afraid of no more risks ahead. Toyota Motor Corporation is the best place to invest in because; the yielding stock is very
conservative and guarantees a good return to any

Finance
DUKE UNIVERSITY Fuqua School of Business FINANCE 251F/351 Individual Assignment #1 Cost of Capital at Ameritrade Prof. Simon Gervais
Spring 2010 – Term 1 In this case, you have to use data from comparables to estimate the cost of capital at Ameritrade. The process involves a few
stages that this handout will guide you through. First, we need to determine which set of п¬Ѓrms to use as comparable п¬Ѓrms. You should try two
diп¬Ђerent sets. The п¬Ѓrst set will include three discount brokerage п¬Ѓrms: Charles Schwab Corp, Quick & Reilly Group, and Waterhouse Investor
Services.1 The second set will include six investment services п¬Ѓrms: A G Edwards, Bear Sterns, Merrill Lynch,Morgan Stanley Dean Witter, Paine
Webber, and Raymond James Financial.Stock ... Show more content on Helpwriting.net ...
We will discuss how to estimate this number later in the course. The п¬Ѓrst page of your report should be an executive summary similar to that on the
last page of this handout. In fact, such a page is included in the spreadsheet that contains the data; feel free to use it. On the second page of your
report, you should provide brief answers to the following three questions. Why is the asset beta of discount brokerage п¬Ѓrms larger than the beta of
investment services п¬Ѓrms? Which set of comparable п¬Ѓrms (discount brokerage or investment services) is more appropriate for Ameritrade to use
and why? For the market portfolio, why is it more appropriate to use the value–weighted index of all U.S. publicly traded п¬Ѓrms as opposed to the
equal–weighted index? Finally, the rest of your report should include more details about your work (i.e., your spreadsheets), including your monthly
return calculations for the three discount brokerage п¬Ѓrms. Please make sure that this is presented in legible fashion so that your report can be graded
eп¬ѓciently and accurately.
2
FINANCE 251F/351 Spring 2010 – Term 1 Individual Assignment #1
Last name: Gervais First name: Simon Section: 30A or 30B (for Fin251F), 301, 302 or 303 (for Fin351)
Cost of Capital at Ameritrade: Executive Summary
Market Data r m – rf = 7.20% rf = 6.61%
Firm Charles Schwab Quick & Reilly Waterhouse Equal–Weight Average
Discount Brokerage Firms Debt /

Finance and Debt
How should PDVSA finance the development of the Orinoco Basin? What are the costs and benefits of using project finance instead of traditional
internal debt finance? PDVSA should think about financing the development of the Orinoco Basin by using project finance. The company (PDVSA) is
looking forward to the financing of a public–private "chain" of deals between PDVSA and other foreign organizations that posses technological
know–how, crude oil marketing capacity and creditworthiness, to develop the Orinoco Basin. This is good to them because this type of deal will
allow PDVSA to keep its debt and cash capabilities, in case of an uncertainty, creating a lower risk for the company. Benefits: * Having a debt
capacity, more... Show more content on Helpwriting.net ...
What kind of debt (agency debt, bank debt, or Rule 144A bonds) should the sponsors use to fund the debt? What are the advantages and disadvantages
of each kind of debt? They should go after Rule 144ВЄ bonds to fund the debt, since it has the share advantages of public bonds and has the additional
advantage of speed, they also don't require initial disclosure to the SEC and only qualified institutional investors could buy 144A bonds wich makes
it a safer option. Advantages and Disadvantages of each kind of debt: Public bond: provides more money than other means, with more maturity, but
has a negative carry. Rule 144: Easy execution, short period of time, but they are dependent on the Venezuelan government and the U.S. market, wich
makes it very volatile. Bank Debt: draw on the credit line as pleased, but it has variable interest rates and a short maturity. Agency Debt: No PRI
needed on the loan, but the majority of the remaining debt would need the PRI. Will the bonds get an investment grade rating? How can they improve
the probability of getting an investment grade? I believe they will get an investment grade rating because they have all the resources to make the
project work, not only do they have technology

Finance Questions
1. Market risk is the chance that a totally unexpected event will have a significant effect on the value of the firm or a specific investment. Answer:
FALSE 2. Purchasing–power risk is the chance that changes in interest rates will adversely affect the value of an investment; most investments decline
in value when the interest rates rise and increase in value when interest rates fall. Answer: FALSE 3. If a person's required return does not change when
risk increases, that person is said to be
A) risk–seeking.
B) risk–indifferent.
C) risk–averse.
D) risk–aware. 4. If a person's required return decreases for an increase in risk, that person is said to be
A) risk–seeking.
B) ... Show more content on Helpwriting.net ...
Answer: TRUE 28. The empirical measurement of beta can be approached by using least–squares regression analysis to find the regression coefficient
(bj) in the equation for the slope of the "characteristic line." Answer: TRUE 29. Nico owns 100 shares of stock X which has a price of $12 per share and
200 shares of stock Y which has a price of $3 per share. What is the proportion of Nico's portfolio invested in stock X?
A) 77%
B) 67%
C) 50%
D) 33% 30. Nico wants to invest all of his money in just two assets: the risk free asset and the market portfolio. What is Nico's portfolio beta if he
invests a quarter of his money in the market portfolio and the rest in the risk free asset?
A) 0.00
B) 0.25
C) 0.75
D) 1.00 31. What is the expected market return if the expected return on asset X is 20 percent, its beta is 1.5, and the risk free rate is 5 percent?
A) 5.0%
B) 7.5%
C) 15.0%
D) 22.5% 32. The term structure of interest rates is the graphical presentation of the relationship between the annual rate of interest earned on a security
purchased on a given day and held to maturity and the remaining time to maturity. Answer: FALSE 33. An inverted yield curve is a downward
–sloping

yield curve that indicates generally cheaper long–term borrowing costs than short–term borrowing costs. Answer: TRUE 34. A yield curve that reflects
relatively similar borrowing costs for both

Corporate Finance
Corporate Finance Exam with Answers
Posted on May 10, 2012 by Sam
Corporate Finance, Chapters 8, 9 & 10. Exam Questions: 1. A project's opportunity cost of capital is: A. The forgone return from investing in the
project. 2. Which of the following statements is correct for a project with a positive NPV? A. The IRR must be greater than 1. 3. What is the NPV
of a project that costs $100,000 and returns $50,000 annually for 3 years if the opportunity cost of capital is 14%? C. $16,085 4. The decision rule
for net present value is to: C. Accept all projects with positive net present values 5. What is the maximum that should be invested in a project at time
zero if the inflows are estimated at $50,000 annually for 3 years, ... Show more content on Helpwriting.net ...
A. 3.5% 25. What nominal annual return is required on an investment for an investor to experience a 12% gain in purchasing power? Assume inflation
to be 4%. D. 16.48% 26. What is the undiscounted cash flow in the final year of an investment, assuming $10,000 after–tax cash flows from operations,
$1,000 from the sale of a fully depreciated machine, $2,000 required in additional working capital, and a 35% tax rate? C. $12,650 27. For a
profitable firm in the 30% marginal tax bracket with $100,000 of annual depreciation expense, the depreciation tax shield would be: B. $40,000 28.
Why is accelerated depreciation often favored for the corporation's set of tax books? D. It impacts favorably with the time value of money 29. Why is
it likely that firms use straight–line depreciation methods for reporting to shareholders? D. It allows asset balances to decline more slowly 30. What is
the net effect on a firm's working capital if a new project requires $30,000 in inventory, $10,000 increase in accounts receivable, $35,000 increase in
machinery, and a $20,000 increase in accounts payable? C. +$20,000 31. What level of management is responsible for originating capital budgeting
proposals? D. All levels of management 32. Which of the following is least likely to be responsible for a regional manager's conflict of interest in
promoting a capital budgeting proposal? B.

Personal Finances
Describe how/where you learned what you know about personal finances*
Learning about money management started at home with my mother. We save throughout the year for Christmas by depositing loose change into a jar.
Our savings determine what new electronics are within grasp Christmas. This taught me to become actively involved in determining how I would like
to spend my money. I always research the best bargains so that this money can buy the various items I desire at an acceptable price.
I just obtained my first job and the various paycheck deductions are astonishing. This lesson is a real eye opener as I begin planning for graduation.
My mother and I established a budget for the various graduation events and I am responsible for paying for those items that exceeds the amount we
have set aside. My budget also centers around celebratory events in which I will receive money; like Christmas, birthday, and graduation.
My school has also been instrumental in teaching lessons about personal finances. My class competed against other schools in the H & R Budget
Challenge Game. The game taught lessons about comparing bank fees and the ... Show more content on Helpwriting.net ...
Every paycheck, I give my sister 10%, 20% is deposited into my savings account, and the remaining amount is for incidentals, graduation activities, and
college. Since my account is with an online institution, Capital One 360, I quickly learned to utilize the direct deposit feature. I understand that on a
weekly budget of $20 that I sometimes have to choose between buying fancy school lunches or taking in a movie with friends. I am also proud to
say that I treated my mother and sister to Christmas dinner and I insisted on paying the tip, and the tipping scale was a new financial arena that I had
yet to discover. New money management skills are learned daily and I believe that discipline today will allow for a brighter future

Finance
Plant Improvements
Total Investments: total investment in plant and equipment brought forward from the Production spreadsheet.
Sales of Plant and Equipment : total sales of plant and equipment brought foraad from the Production spreadsheet.
Common Stock * Shares Outstanding: The number of shares of common stock in the hands of shareholders. Reflect any issue/ retire stock transaction
at the beginning of this year * Price Per Share: stock price as of yesterday's close. Stock will be issued or retired at this price. * Earnings Per Share: this
year's projected earnings per share, defined as proforma profits divided by common shares: * Max Stock Issue: The dollar value of new shares your
board of directors has authorized ... Show more content on Helpwriting.net ...
(i.e. The amount you wish to borrow.) Transactions take place on January 1. Bonds are issued at the "Long term interest rate". You cannot issue more
than the "Maximum issue this year". * Long Term Interest Rate: The interest rate you will pay on bonds issued this year. Bonds are 10–year coupon
notes, meaning that you pay the interest each year for the next 10 years, then repay the principal. Bond rates are driven by the prime rate and by your
Leverage (Assets/Equity) ratio. The higher the ratio, the more risk you present, and the higher the interest rate * Maximum Issue This Year: The
upper limit on bonds (long term debt) that you can issue this year. Bondholders examine Fixed Assets and your Leverage (Assets/Equity ratio) to
determine a funding limit. In general, bondholders are interested in funding plant and equipment. They fund up to 80% of last year's Fixed Assets.
However, as your Leverage increases, they become concerned and typically refuse additional funding as Leverage exceeds 4.0. Outstanding Bonds *
Series Number: The number that identifies the bond issue. The first 3 digits are the interest rate. The "S" stands for "series". The last 2 digits are the
year in which the bond is due. "12.5S2005" identifies bonds that are due December 31, 2005 and pay an interest rate of 12.5%. * Face Amount: The
face amount or principal of the bonds. This amount is repaid when the bond matures. Until that year, you

Finance
Sample Questions: CFGB6102
1. An asset was purchased three years ago for $100,000 and can be sold for $40,000 today. The asset has been depreciated using the MACRS 5–year
recovery period and the firm pays 40 percent taxes on both ordinary income and capital gain.
(a)Compute recaptured depreciation and capital gain (loss), if any. (b)Find the firm's tax liability.
|(a) Book Value ' 100,000 (1– 0.20 – 0.32 – 0.19) ' $29,000 |
|Recaptured depreciation ' 40,000 – 29,000 |
|' $11,000 ... Show more content on Helpwriting.net ...
(a)Compute recaptured depreciation and capital gain (loss), if any. (b)Find the firm's tax liability.
|(a) Book Value ' 120,000 (1– 0.20 – 0.32) ' $57,600 |
|Recaptured depreciation |
|' $0 |
| |
|Capital loss ' 57,600 – 50,000 |
|' 7,600 |
| |
|(b) Tax benefit ' 7,600 ( 0.40 ' $3,040 |
3. Compute the depreciation values for an asset which costs $55,000 and requires $5,000 in installation costs using MACRS 5–year recovery period.
| Depreciable Value ' 55,000 + 5,000 '

Finance
MASTERS IN BUSINESS ADMINISTRATION MAY/2015 BMMF5103 MANAGERIAL FINANCE Q1: The role of a financial manager requires
both an understanding of how the business functions as a whole and specialized financial knowledge. The head of the financial operations is called the
chief financial officer (CFO). Financial managers develop strategies that will implement the long–term goals of a corporation. Their main goal is to
maximize the value of stock shares. Stockholder wealth maximization is the appropriate goal for management decisions. The risk and timing
associated with expected earnings per share and cash flows are considered in order to maximize the price of the firm's common stock. Maximizing
shareholder wealth... Show more content on Helpwriting.net ...
This is bad for investors because the entire point of a risk premium is to achieve a higher rate of return on investments by accepting more risk. For
most assets the risk premium will be positive before an investment is undertaken since investors will demand compensation over and above the
risk–free return to invest money in risky assets. But after an investment is undertaken, the observed risk premium can be negative if the asset's nominal
return is unexpectedly low, the risk–free return is unexpectedly high, or if some combination of these two events occurs. So, yes the risk premium can
be negative after an investment is undertaken because this will promise expected or reasonable returns to the investors. Q4: A number of publicly
traded firms pay no dividends yet investors are willing to buy shares in these firms. Good examples of this kind of shares are Berkshire Hathaway and
Google. The reasons for this are because these companies have the following advantages which are beneficial to the investors in terms of: 1) Good
fundamentals These are big established conglomerates which are well known worldwide on their excellent operational performance such as
efficiencies in management and Human Resource. Their outstanding financial structures and investments stabilities and investment performance are
also big attractions to the investors which they believe could bring maximum returns on

Finance : Finance A Carry Trade
In finance a carry trade is a strategy that consists of borrowing at a low interest rate currency to fund investment in higher yielding currencies. (Moffett)
The country in which the investors borrow from is called the funding country and the country where the investment occurs is called the target country.
(4) Carry trade is also termed currency carry trade; this strategy is speculative in that the currency risk is present and not managed or hedged. (Moffett)
Although there are several complicated carry trades in finance, the most popular are carry trades in the foreign exchange market, which I will discuss
in this paper and its role in the financial crisis of 2008.
This strategy is executed by using the following the next steps: An ... Show more content on Helpwriting.net ...
Another is the change in exchange rates, which also affect the amount required to pay back and ultimately the profit. As we know currency exchange
rates and interest rates can change in the matter of seconds, causing uncertainty therefore creating more risk in addition to the risk created by leveraging.
An example of a carry trade can be watched on Khan Academy, where the instructor explains in detail the concept of a carry trade. In this video the
instructors states the following, there are two countries A & B. Country A's economy is stagnating and facing a deflationary crisis causing theCentral
Bank to lower interest rates and print out as much money. While country B has higher interest rates and is most likely facing inflation. An opportunistic
investor will see the opportunity to borrow at low interest rate and invest in a high yielding currency. Once the investor has executed the carry trade,
which involves borrowing in a low interest currency (funding country) and converting it to a higher interest currency (target country). Then reinvesting
that amount into bonds of the target country. The yield gained from this strategy would be the difference between interest rates of the funding and
target country holding the exchange rate constant, which in reality is impossible. In this video the instructor also talks about when the carry trade

Finance
(Weighted average cost of capital) The target capital structure for QM Industries is 45% common stock, 6% preferred stock, and 49% debt. If the cost
of common equity for the firm is 17.9%, the cost of preferred stock is 10.6%, the before–tax cost of debt is 8.9%, and the firm's tax rate is 35%, what
is QM's weighted average cost of capital?
QM's WAAC is _%?
2).(Weighted average cost of capital)Crypton Electronics has a capital structure consisting of 45% common stock and 55% debt. A debt issue of $1,000
par value, 6.1% bonds that mature in 15 years and pay annual interest will sell for $980. Common stock of the firm is currently selling for $29.76 per
share and the firm expects to pay a $2.29 dividend next year. Dividends have grown at ... Show more content on Helpwriting.net ...
Initially, the corporation will operate in the southern region of Tennessee, Georgia, North Carolina, and South Carolina. A small group of private
investors in the Atlanta, Georgia area is interested in financing the startup company and two financing plans have been put forth for consideration:
Plan A is an all–common–equity structure in which $2.4 million dollars would be raised by selling common stock at $10 per common share.
Plan B would involve the use of financial leverage. $1.4 million dollars would be raised by selling bonds with an effective interest rate of 11.3%
(per annum), and the remaining $1.0 million would be raised by selling common stock at the $10 price per share. The use of financial leverage is
considered to be a permanent part of the firm's capitalization, so no fixed maturity date is needed for the analysis. A 35% tax rate is deemed
appropriate for the analysis.
A). Find the EBIT indifference level associated with the two financing plans.
The EBIT indifference level associated with the two financing plans is $_? (Round to the nearest dollar.)
B). A detailed financial analysis of the firm's prospects suggests that the long–term EBIT will be above $344,000 annually. Taking this into
consideration, which plan will generate the higher EPS?
Complete the segment of the income statement for Plan A below. (Round income statement amounts to the

Functions of Finance Executive, Finance Treasurer &...
|Financial Management |
| |
|Functions of Finance Executive, Finance Treasurer & Finance Controller |
| |
|3/16/2012 |
| |
|Hemnath K.N |
FINANCE EXECUTIVES FUNCTIONS ... Show more content on Helpwriting.net ...
The financial manger, at this juncture, will take a decision about the time when the funds from outside sources are needed, the source from which they
are to be received, how long they will be needed an from what source they will be repaid. Obviously, it is a very important function of financial
manager.
NEGOTIATIONS FOR NEW OUTSIDE FINANCING
Finance function does not stop with the decision to undertake outside financing; if extends towards carrying on negotiations from the outside financing
agencies to arrange for it. Finances are needed by an establishment to meet its short–term and long–term requirements. The financial manger must
assess short and long term financial requirements of the organization a start negotiations for raising these funds. It requires considerable planning
because the sources are to be tackled in advance keeping in view the alternative sources and sounded in a manner that in case one fails, the other
should be available. He must keep open the credit lines.
CHECKING UPON FINANCIAL PERFORMANCE
The Financial manager is under an obligation to check the financial performance of the funds invested in the business. It requires retrospective analysis
of the operating period to evaluate the efficiency of financial planning. An unbiased assessment of financial performance shall be great value to the

Finance 100
Identify the components of a stock's realized return. A realized return is the amount of actual gains that is made on the value of a portfolio over a
specific evaluation period. This takes into consideration any earnings generated by each of the assets contained in the portfolio, as well as any losses
that were incurred as a result of a shift in the value of the individual assets. It is possible to identify the realized return associated with each asset that is
held in the portfolio. Components of realized return are expected return, changes in expectations about future cash flows and changes in expectations
about future discount rate. Employing the calculation of realized return helps an investor make decisions about what assets to... Show more content on
Helpwriting.net ...
A negative beta means that the asset's returns generally move opposite the market's returns. One will tend to be above its average when the other is
below its average. Beta is also referred to as a financial elasticity or correlated relative volatility, and can be referred to as a measure of the sensitivity
of the asset's returns to market returns. Measuring beta can give clues to volatility and liquidity in the marketplace. Investors can find the best use of
the beta ratio in short–term decision making, where price volatility is important. If you are planning to buy and sell within a short period, beta is a
good measure of risk.
State what WACC measures and explain the WACC assumptions used to value a project. A company's assets are financed by either debt or equity. The
weighted average cost of capital measures the cost of capital of a company based on two elements. One is the cost of debt and the other is the cost
of equity. By taking a weighted average, the interest the company has to pay for every dollar it finances can be seen. The project cost of capital is
equal to the firms WACC. Its projects cost of capital depends on its risk, when the market risk of the project is similar to the average market risk of
the firm's investments. This is when its cost of capital is equivalent for a portfolio of all the firm's securities. The most important assumption used in
the value of a project is the average risk. This is where we assess the

Finance, Banking And Finance Industry
When you drive up to your bank or walk up to your teller, your main goal is to complete your transaction and move on with your day. The last thing
on your mind is how that transaction is taking place. You don't care what happens behind the scenes as long as your money is where it needs to be and
is safe. As the banking and finance industry has transformed, so has the process of how your money is handled. To accompany those changes, regulators
and lawmakers create laws designed to protect consumers, banks, and the economy as a whole. As you will learn, the history of the banking industry
has changed drastically over the last two thousand years and even more so in the last century with the advance of technology. It only makes sense that
those lawmakers must continue to update and invent new regulation to further protect those interested parties. My goal is to demonstrate just how
rapidly and radically the finance industry has changed and how new elements being introduced to finance and banking will adapt the industry and the
regulation.
In the world of finance and financial services, banking has been around longer than any other segment of that world. For more than two millenniums,
bankers have served as "money changers" who aided people in exchanging foreign for local currencies. As this practice grew and many began to throw
their funds into the banking system, the services that banks performed multiplied. Loans were granted and bankers collected interest. Most of

Business Finance
UBFF2013 BUSINESS FINANCE
Question:
1.
(a)
Frodo Baggins has RM1,500 to invest. His investment counselor suggests an investment that pays no stated interest but will return RM2,000 at the end
of 3 years. (i) (ii) What annual rate of return will Frodo earn with this investment? Frodo is considering another investment, of equal risk, that earns an
annual return of 8%. Which investment should he make and why?
(b)
Samwise Gamgee was seriously injured in an industrial accident. He sued the responsible parties and was awarded a judgment of RM2,000,000.
Today, he and his attorney are attending a settlement conference with the defendants. The defendants have made an initial offer of RM156,000 per
year for 25 years. Samwise plans ... Show more content on Helpwriting.net ...
A variety of proposals are being considered by management to redirect the firm's activities. Determine the impact on share price for each of the
following proposed actions and indicate the best alternative. (a) (b) (c) (d) Do nothing, which will leave the key financial variables unchanged. Invest
in a new machine that will increase the dividend growth rate to 6% and lower the required return to 14%. Eliminate an unprofitable product line,
which will increase the dividend growth rate to 7% and raise the required return to 17%. Merge with another firm, which will reduce the growth rate to
4% and raise the required return to 16%.
UBFF2013 BUSINESS FINANCE
(e) Acquire a subsidiary operation from another manufacturer. The acquisition should increase the dividend growth rate to 8% and increase the
required return to 17%.

5.
Aragorn Enterprises is evaluating an unusual investment project. What makes the project unusual is the stream of cash inflows and out flows shown in
the following table:
Year 0 1 2 3 4 (a) (b) (c) (d) (e)
Cash flow (RM) 200,000 –920,000 1,582,000 –1,205,200 343,200
Why is it difficult to calculate the payback period for this project? Calculate the investment's net present value at each of the following discount rates:
0%, 5%, 10%, 15%, 20%, 25%, 30%, 35%. What does your answer to part (b) tell you about this project's IRR? Should Aragorn invest in

Principle of Finance
Principles of
Managerial Finance
The Prentice Hall Series in Finance
Adelman/Marks
Entrepreneurial Finance
Andersen
Global Derivatives: A Strategic Risk
Management Perspective
Bekaert/Hodrick
International Financial Management
Berk/DeMarzo
Corporate Finance*
Berk/DeMarzo
Corporate Finance: The Core*
Berk/DeMarzo/Harford
Fundamentals of Corporate Finance*
Boakes
Reading and Understanding the
Financial Times
Brooks
Financial Management: Core
Concepts*
Copeland/Weston/Shastri
Financial Theory and Corporate
Policy

Dorfman/Cather
Introduction to Risk Management and
Insurance
Eiteman/Stonehill/Moffett
Multinational Business Finance
Fabozzi
Bond Markets: Analysis and Strategies
Fabozzi/Modigliani
Capital ... Show more content on Helpwriting.net ...
MicrosoftВ® and WindowsВ® are registered trademarks of the Microsoft Corporation in the U.S.A. and other countries. Screen shots and icons
reprinted with permission from the Microsoft
Corporation. This book is not sponsored or endorsed by or affiliated with the Microsoft
Corporation.
Copyright © 2012, 2009, 2006, 2003 by Lawrence J. Gitman.
All rights reserved. Manufactured in the United States of America. This publication is protected by
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Many of the designations by manufactures and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this
book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps.
Library of Congress

Personal Finance And Social Finance
Personal Finance has always been an emotional topic in the United States. Today, many Americans are generating unlimited wealth and living
exceptional lives, while others are struggling to make ends meet. Evidently, people's actions and beliefs are the deciding factors in their achievement of
wealth. Thus, this huge gap in wealth between rich and poor people has a special connection with the philosophy and attitude of each individual toward
personal finance. Merriam–Webster Dictionary defined Philosophy as a set of ideas about how to do something or how to live. Therefore, each
person's philosophy is a major factor in how their personal finance works out since the knowledge of facts, concepts, and principles will determine
how people spend, save, and invest their financial resources. Dr. E Thomas Garman is a renowned advisor and academic. Garman is the author of 30
books and 200 research articles in personal finance and consumer economics. Raymond E. Forgue professor at the University of Kentucky, they
stated, "You have to do only a few things right in personal finance during your lifetime, as long as you do not do too many things wrong."(Garman
and Forgue 5) Clearly, many people are in the dark when it comes to personal finance, their financial IQ is very limited. If only a few money
principles done right is all people need to succeed financially; evidently, they are missing some fundamental information. Sadly, some people do not
recognize this reality which is the

Finance
Financial decision making
Contents Introduction:1 Task: 11 (a) Ratio analysis on the basis of AstraZeneca Annual Report and Form 20
–F Information 2012:1 (b) Business
structure and financial structure (comparison and relative advantages of the chosen organization)5 (c) Compare and comment on the finances of
business:7 (d)Recommend potential investor for the investment decision:8 (e)All possible Sources of finance for 500000 and best source8 (f)
Management of working capital:10 Task 2:11 (a)Preparations of acash flow forecast and comment on budget and cash flow:11 (b)Recommendation for
managing cash flow:12 Task 3:12 (a)Assessment of projects by financial techniques:12 (b) Recommendation from the above ... Show more content on
Helpwriting.net ...
Here the position of 2011 is more efficient than in 2011.
Working capital turnover: This ratio indicates company's ability to generate revenue with the working capital. The difference between the current asset
and the current liability can be termed as the working capital.
Formula: Revenue / average working capital
Calculations: 2012 = 27973 / {(19048 – 13903) + (23506 – 15752)} / 2 = 4.340 2011 = 33591 / {(23506 – 15752) + (25131 – 16787)} / 2 = 4.170
Interpretations: the position of the working capital ratio in 2012 is better than in 2011.
Receivable turnover: receivable turnover represents the efficiency of collecting payment from the account receivables or the debtors.
Formula: Revenue / average account receivables
Calculations: 2012 = 27973 / (7629 + 8754) / 2 = 3.410 times 2011 = 33591 / (8754 + 7847) / 2 = 4.050 times
Interpretations: the rate of collection from the customers in 2011 is higher than in2012. So, the efficiency in respect of the collection decreases in the
recent year.
Solvency ratios:
Company's ability to pay long term obligations can be termed as solvency. This ratio indicates company's efficiency to pay long term debt and
obligations.
The most commonly used ratios for the solvency are: 1. Debt to asset ratio 2. Debt to equity ratio 3. Financial leverage
Debt to asset ratio: the percentage of total asset that is financed by

Personal Finance And Social Finance
Personal Finance has always been an emotional topic in the United States. Today, many Americans are generating unlimited wealth and living
exceptional lives, while others are struggling to make ends meet. Evidently, people's actions and beliefs are the deciding factors in their achievement of
wealth. So, this huge gap in wealth between rich and poor people has a special connection with the philosophy and attitude of each individual toward
personal finance. Merriam–Webster Dictionary defined Philosophy as a set of ideas about how to do something or how to live. Therefore, each
person's philosophy is a major factor in how their personal finance works out because the knowledge of facts, concepts, and principles will determine
how people spend, save, and invest their financial resources. Dr. E Thomas Garman is a renowned advisor and academic. Garman is the author of 30
books and 200 research articles in personal finance and consumer economics. Raymond E. Forgue professor at the University of Kentucky, they
stated, "You have to do only a few things right in personal finance during your lifetime, as long as you do not do too many things wrong."(Garman
and Forgue 5) Clearly, many people are in the dark when it comes to personal finance, their financial IQ is very limited. If only a few things done
right is all people need to succeed financially; evidently, they are doing many things wrong. Sadly, some people do not recognize this reality which is
the first step toward

sources of finance
Question:
IDENTIFY THE SOURCES OF FINANCE AVAILABLE TO A BUSINESS
Answer:
There are a number of ways of raising finance for a business. The type of finance chosen depends on the nature of the business. Large organisations
are able to use a wider variety of finance sources than are smaller ones. Finance is not just needed when starting a new business, but you may be
required to seek further finance even if you're business is well established i–e further expansion, R&D, new product launch .
No matter what business you are in, you will always have to ensure your business is adequately financed; there are two major forms
1. Internal Finance
2. External Finance
Internal Finance
Internal finance is the finance that is raised ... Show more content on Helpwriting.net ...
These grants are often linked to incentives to firms to set up in areas that are in need of economic development.
Workforce restructuring Moving employees into new posts or laying off employees who have been working less than 2 years.
Question 2
ASSESS THE IMPLICATIONS OF THE DIFFRENT SOURCES
Answer
Implications of Sources of internal and external finance are as follows
Implications of Sources of Internal Finance
Personal savings:
This is most often an option for small businesses where the owner has some savings available to use as they wish.
Retained profit:
This is profit already made that has been set aside to reinvest in the business. It could be used for new machinery, marketing and advertising, vehicles
or a new IT system.
Working capital:

This is short–term money that is reserved for day–to–day expenses such as stationery, salaries, rent, bills and invoice payments.
Sales of assets:
There may be surplus fixed assets, such as buildings and machinery that could be sold to generate money for new areas. Decisions to sell items that
are still used should be made carefully as it could affect capacity to deliver existing products and services.
Implications of External Source of financing
Shares:
Limited companies could look to sell additional shares, to new or existing shareholders, in exchange for a return on their investment.
Loans:
There are debenture loans, with fixed or variable interest,

Equity Finance And Debt Finance
Stockholders are those entities who provide a company with the risk capital such as preference share owners and ordinary share owners (Freeman and
Reed, 1983). Generally, stockholderis one of long–term finance providers with the aim to maximize their wealth.According toBrickleyet al. (1985),
long–term finance providers are more likely to focus on the matter whether the financial structure in the company is sound or not and the durability of
profitabilityrather than temporary profits that a potentially risky financial structure may bring. In addition, different company will encounter different
problems when changing their capital structure. This part therefor mainly focus on equity finance and debt finance in small and medium–sized
enterprises (SMEs) and listed company.
From the perspective of stockholders, debt finance may be more attractive compared with other financial approaches. The reasons are as follows.
Firstly, it may ensurestockholders' ownership unchanged (Mooij, 2012). If the board of the company intend to adopt the approach of equity finance
such as issuing new rights, there is a possibility that the former stockholders may not be able to purchase all new issuing rights and then lead to
dilution of control which they do not expect. Secondly, debt finance is a relatively cost–effective method as there is tax advantage of debt.If a firm
only has equity finance, an extra tax then needed to pay because dividends which come from profits are income for investors which

Finance Reflection
Over the entirety of this course I have learned many new things about finance and being financially stable through the rest of my life. One of the
first things I learned was the importance of having an emergency fund in place. It made me realize that with an emergency fund it takes so much
stress and pressure off being able to pay for unexpected expenditures that are just simply a part of life. Baby step one is something I have begun to
work into my financial life and will continue to do so by putting any money I can towards it. Having an emergency fund is so simple but can help
so much in my financial life to come. A lesson from this class I will most likely avoid is graduating college debt free. To graduate college debt free
would be an amazing thing to accomplish, but is not an attainable goal for my current situation. As a high school senior, I have been unable to
work and save money till this past summer. Because of this, I have little to no money saved for college and will end up having debt once I finish
my education. Even though I will have some debt I have made it my goal to apply for any scholarship I qualify for to reduce the total amount of
debt I will have. All in all, I am not completely avoiding this lesson I am just not going to stop my education to not go into debt. The most shocking
and interesting lesson I learned during this class is that you don't need a credit score to function in society or to be able to make large purchases. This
came as a shock

Finance Management
Examination Paper of Banking & Financial Services Management IIBM Institute of Business Management Examination Paper Principles & Practices
of Banking Section A: Objective Type & Short Questions (30 Marks) п‚· п‚· п‚· This section consists of Multiple Choice & Short Note type
questions. Answer all the questions. Part One carries 1 mark each & Part Two carries 4 marks each. MM.100
Part One: Multiple Choices: 1. Frequency of First Tranche Returns is: a. Weekly b. Monthly c. Monthly/quarterly d. Monthly/quarterly/half–yearly 2.
An order for winding up a banking company can be issued by___________ a. The High Court b. The RBI c. The Central Government d. The Supreme
court 3. Who shall be natural guardian in case of married minor girl? a. Father ... Show more content on Helpwriting.net ...
According to Mr. D. Ian Guild, Senior Advisor, Forfeiting & Syndications Group, StandardBank, the cell was being set up after a series of meetings
with the bank, and is essentially aimed at spreading the message of Forfeiting as an effective trade financing mechanism to increase exports. Suggesting
that forfeiting was the ideal springboard for effecting a quantum jump in exports in the medium–term, Mr. Guild said he was confident of aggregating
forfeiting business of $100 millions in 1998 and $250 millions in 1999 in the country. Since its introduction in 1992, Exim Bank had facilitated 69
forfeiting transactions valued at around $75 millions, with credit periods ranging between 90 days and seven years, and covering the export of goods
ranging from textiles to plant and machinery. The RBI has now permitted all commercial banks to act as facilitators for forfeiting transactions. Mr.
Guild pointed out that forfeiting has not really taken off in India because exporters and commercial banks lacked the knowledge of the mechanics of
the scheme. In India, the real challenge would be to motivate small and medium exporters to use the forfeiting route for exports to countries which may
not be able to buy on cash terms. Mr. S. Bhattacharya, deputy general manager, Exim Bank, Calcutta, said: "Payment defaults by overseas

Finance 320: Questions on Finance
1. What are the key financial innovations that were developed during the 1980's. This is open–ended so there can be many answers. There are a myriad
of financial innovations that were created throughout the 1980s were the result of the proliferation of credit instruments, types of securities, interest
rates and rapid adoption of technologies that provided for greater accuracy and speed of trading. The five predominant catalysts of financial
innovations during the 1980s including increased accuracy and speed of moving debt–based securities and aggregated investments in real–time from
one asset classification to another; greater availability of analytics for measuring and managing risk; more effective data extraction analysis tools for
gaining insights into very large data sets not available before; and the creation of more streamlined approaches to managing transactions as well
(Dufey, Giddy, 1981) . These five factors are most responsible for securities innovations including pay–in–kind bonds, inflation–indexed bonds,
convertible and exchange bonds specifically designed to mitigate risk while controlling short sales of debt equities they were tied to, in addition to the
fine–tuning of credit default swaps and interest rate swaps meant to drive down the overall costs and risk of transaction while increasing potential
returns (Marquis, Cunningham, 1990). These and other innovations that occurred during the 1980s were also designed to assuage or mitigate the
exceptional

Finance Assignments
1. Diversity is the quality of difference within any given grouping. In discussing financial and investment, this term is used to denote the variation
within any grouping of investments. The term is quite relative, but also signifies a certain important traits within this realm of discussion.
1a. A substantial and unexpected increase in inflation would be an undiversified risk in most cases. Since inflation affects the entire band of investing
in any given currency, any investment made in that particular currency would be exposed to that risk.
1b. A major recession in the US would also be an undiversified risk. A recession is not diverse in nature and affects all economic trade under its
influence.
1c. A major lawsuit filed against one large, publicly traded corporation signifies a very diverse risk. The specific problem of having just one
organization being a target denotes that this is diverse risk
2.
Ri=Rf + Ba (Rm–Rf) = Expected rate of return
2a. 10.67%
2b. 10.14%
2c. Since beta is the ratio of the volatility between the market and its returns, the number should reciprocate at 1.0 if the market is truly balanced,
which I assume it is.
3.
The main message of the Capital Asset Pricing Model (CAPM) attempts to find value in financial assets by connecting an asset's return and its risk. It
is a simple analytical tool used to find a rather straightforward and simple question: How much risk is contained in this investment? Since the CAPM
uses only two true

Finance
CORPORATE FINANCE COURSE
CORPORATE FINANCE 2.1
Working Capital Management
Sept. 2014
Ir Frank W. van den Berg mba
Vrije Universiteit, Amsterdam
ALYX Financial Consultancy
bv,
Aerdenhout
FWvdB/2014
1
OUTLINE CORPORATEFINANCE
FWvdB/2014
Basics & Guiding principles
Time value of money + Capital Budgeting
Valuation of CF + Bonds

Valuation of shares (+ co.'s)
Financial Analysis (Ratios)
Financial Planning (EFN)
Г пѓ Working Cap. Mgt. (A/R, Inv., A/P)
Debt Financing
2
FIN
1.5
FIN
2.1
Entrepreneurial Finance / Raising Equity
Mergers & Acquisitions / Corp. Restructuring
FINANCIAL RATIOS– Example 1
FWvdB/2014
Sample Balance sheet (000's в‚¬)
Cash + ... Show more content on Helpwriting.net ...
This "looks" great, but is probably too aggressive (why?)
FWvdB/2014
15
FINANCIAL RATIOS

Credit policy
"Normal" payment terms: 2/10 net 30 Г пѓ 2% discount within 10 days payment, otherwise 30 days
Example: Co. XYZ now has 30 days payment terms; average payment by all customers is now 40 days.
XYZ considers 2/10 net 30 terms; the (assumed) result is that 20% is paid in 10 days, 80% in 45 days.
What is better for the company? (interest = say 5%)
FWvdB/2014
16
FINANCIAL RATIOS
Credit policy
FWvdB/2014
Example: Co. XYZ now has 30 days payment terms; average payment by all customers is now 40 days (A).
XYZ considers 2/10 net 30 terms; the (assumed) result is that 20% is paid in 10 days, 80% in 45 days (B). Say sales = 50 mln. Г пѓ paid in 10 days:
20% x 50 – 2% = 9,8
NPVA = 50 / (1,05) 40 / 365 = 49.727.520 Гџпѓџ higher value
NPVB = 9,8 / (1,05) 10 / 365 + 40 / (1,05) 45 / 365 =
9.786.593 + 39.754.935 = 49.541.528
17
FINANCIAL RATIOS
Average inventory period: (Inv. / CGS) x 12 =
3 / 10 x 12 = 3,6 mths. (= fairly high)
Reduce Inventory as much as possible
Avoid "stock–outs"
Use JIT: "just–in–time" (car plant)
Apply advanced Logistics system (supermarket)

sources of finance
Sources of finance
Some sources of finance are short term and must be paid back within a year. Other sources of finance are long term and can be paid back over many
years.
Internal sources of finance are funds found inside the business. For example, profits can be kept back to finance expansion. Alternatively the business
can sell assets that are no longer really needed to free up cash.
External sources of finance are found outside the business. For example from creditors or banks.
Internal sources of finance
Retained profit
Profits generated by a company that are not distributed to shareholders as dividends but are either reinvested in the business or kept as a reserve for
specific objectives such as to pay off a debt ... Show more content on Helpwriting.net ...
A loan is useful for a business that is starting up or looking to grow. Loans are often used to buy fixed assets (see balance sheets) such as machinery
and vehicles. A business will pay the bank back each month in instalments and will also pay an interest charge.
Advantages:
Lower interest rates than overdrafts
Regular repayments help plan cash flow Disadvantages:
Bank can change limit at any time or ask for money to be paid back sooner than expected
Less flexible than an overdraft
Have to pay back in stated time or risk further financial problems

Mortgage:
A mortgage is a long term loan specifically for the purchase of property. Most businesses might buy property through a mortgage. In many cases,
mortgages are used as a security for a loan. This tends to occur with smaller businesses. A sole trader, for example, running a shop might want to
move to larger premises. They find a new shop with a price of ВЈ200,000. To raise this sort of money, the bank will want some sort of security– a
guarantee that if the borrower cannot pay the money back the bank will be able to get their money back somehow.
Advantages of mortgages: you can keep ownership of your business and your business premises. Other investment options might involve you giving up
some of your business ownership

Sources of Finance
Introduction
In this essay we will be looking at different sources of finance available for different type of business. Also will be looking at the definitions of
different type of sources of finance, the advantages, disadvantages and also giving reasons to why different sources of finance was chosen for the
given case studies.
Types of sources of finance
Bank Loan – is a long term loan and will often be for large amount of money for starting up a business or to expanding. Business will agree with the
bank to pay installment monthly fees with interest charge.
Long term Loan – is a loan which is often being for a large sum of money and usually the payment period is more than 15 years. Usually is used for
starting up new business, ... Show more content on Helpwriting.net ...
The estimated cost of the facility is ВЈ4.5 million. A long term bank loan will be suitable to for a large company planning to move as the estimated
cost is ВЈ4.5 million and share issue will also be ideal as this can raise capital that can be used for the move, this is a long term source of finance.
Shareholders will have to share the control of business, each share gives the shareholder a vote on the direction of the company and will spread the
risk to the number of shareholders, and this will also reduce the amount of loan to borrow from the bank which will also result to fewer installments
and less interest to pay.
Case 4:
A rugby club is anticipating turning fully professional after the team secured promotion to the Zurich premiership. To take this place in league, the
league committees have insisted that it also improves facilities at the ground. It has been estimated that the cost of these two measures will be
ВЈ500,000.
The best way to inject a source of finance in a rugby club is through finding a sponsor. A sponsor will bring money into the club and raise fund to
enable the club to improve its facilities.
Advantages of having a sponsor:
The marketer can reach different target of audiences
The sponsors' logo could appear on the shirts of the players, logo on the playing field etc.
This gives different advertising that will encourage and promote increase in participation

Personal Finance
Unit10– Personal Finances
Marc Wilks
Kaplan University
MM 212
Professor Heather Bullard
October 3, 2015
Having an understanding of basic financial principles is essential for anyone who wants to exercise control over their personal income. Without it,
how can anyone plan how to pay for next month's bills, much less plan for retirement? I learned that a basic knowledge of financial basics is
essential if I was to have any chance of being able to make the most of my personal income (LaPonsie, How to Stop Living the Paycheck to Paycheck
Lifestyle August 6, 2015).
I had my first exposure to basic personal finance the last half of my senior year of high school. I learned about how ... Show more content on
Helpwriting.net ...
The period in which the interest grows is known as the compounding period. Knowing how this process works can really help an individual see profit
in their investments over the long term.
I will be more discerning when putting my money in an account. In the past, I have jumped at the highest interest rate, hoping to capitalize on the
potential for a big return. But I learned that the highest rate is not always the best one. Going forward, I will be looking for the more consistent rates
rather than the highest. I would rather deal with a rate that varies between 1–2 points rather than 4–5.
If I could give any advice to a young person about finances, I would tell them to have a long view of their money and to prioritize. The latest smart
phone might look good with those new shoes, but the hundreds of dollars that they likely cost would do more good in an interest bearing savings
account or mutual fund. I would tell them that money that is obtained get quickly can be lost just as fast. Make long term investments that can be seen
to grow over the years. It is not about short term satisfaction, it is about long term security.
References

LaPonsie,Maryalene (August 6, 2015)

Finance
CHAPTER 14
COST OF CAPITAL
Answers to Concepts Review and Critical Thinking Questions
1.It is the minimum rate of return the firm must earn overall on its existing assets. If it earns more than this, value is created.
2.Book values for debt are likely to be much closer to market values than are equity book values.
3.No. The cost of capital depends on the risk of the project, not the source of the money.
4.Interest expense is tax–deductible. There is no difference between pretax and aftertax equity costs.
5.The primary advantage of the DCF model is its simplicity. The method is disadvantaged in that (1) the model is applicable only to firms that
actually pay dividends; many do not; (2) even if a firm does pay ... Show more content on Helpwriting.net ...
10.If the different operating divisions were in much different risk classes, then separate cost of capital figures should be used for the different
divisions; the use of a single, overall cost of capital would be inappropriate. If the single hurdle rate were used, riskier divisions would tend to receive
funds for investment projects, since their return would exceed the hurdle rate despite the fact that they may actually plot below the SML and, hence, be
unprofitable projects on a risk–adjusted basis. The typical problem encountered in estimating the cost of capital for a division is that it rarely has its
own securities traded on the market, so it is difficult to observe the market's valuation of the risk of the division. Two typical ways around this are to
use a pure play proxy for the division, or to use subjective adjustments of the overall firm hurdle rate based on the perceived risk of the division.
Solutions to Questions and Problems
NOTE: All end of chapter problems were solved using a spreadsheet. Many problems require multiple steps. Due to space and readability constraints,
when these intermediate steps are included in this solutions manual, rounding may appear to have occurred. However, the final answer for each
problem is found without rounding during any step in the problem.

Basic
1.With the information given, we can find the cost of equity using the dividend growth model. Using this model, the cost of

Finance : Finance For Any Reason
Finance for any reason
While the information on this page is educational by nature and predominantly written for the benefit of investors looking to finance investment
property purchases, MRD Finance has the experience, licensing and know how to also arrange finance to buy or renovate a family home, commercial
finance, developer funding, motor vehicle leasing and finance for plant and equipment.
MRD Finance
MRD Finance helps you compare home loans to find the right finance for your investment goals
MRD Finance offers a comprehensive mortgage broking service to compare hundreds of home loan products. With over 40 plus bank and non bank
lenders to choose from we have access to the right lender and right loan product to suit your individual needs, making sure you have the correct loan
structure for your current investment property purchase and your long–term investment strategy.
Stress–free – We do the research and compare loan products to present you the options that best fit your investment profile
Armchair Service – In most instances there will be no need for you to be anywhere to have your finances arranged. That means not having to walk
into a bank branch or even visit our offices unless you want to (where you'd be welcomed, of course). We respect that you're probably busy and value
your time so we have arranged our processes in such a way that everything can be arranged remotely. This may seem unusual at first but, like so many
others, you'll quickly become a convert to

Finance and Deluxe
Executive Summary
Despite being one of the marketing leaders in the check printing industry, Deluxe Corporation is incapable of incorporating the best capital structure.
Failure in exposure to the advantages of debt financing has force it into higher costs of finance. Meanwhile, the emergence of new technology, e.g.
electronic payments, has forced Deluxe to streamline its business and has constrained the firm to focus on only its core activities. This unfavorable
external environment the firm is facing has driven a need of debt financing.
Problems with current financial structure are as follows: 1. Deluxe will have insufficient cash to support its long–term stock repurchase program. 2.
Flexibility is not well managed by ... Show more content on Helpwriting.net ...
Assuming Deluxe will spend same amount of what it spent in 2001 in repurchasing in coming years (Exhibit 1), it is undoubted that external funds
have to be raised in order to pursue this kind of aggressive restructurings. The amount of debt to borrow depends on 3 main criteria, bond rating,
flexibility and cost of capital. Based on flexibility analysis (Exhibit 2), both scenarios, expected and pessimistic, show a negative relationship between
the bong ratings and maximum debt capacities implied by EBIT interest coverage. As a firm is taking on more debts, the financial risks associated
with the debts increase and therefore lower the bond rating of the firm. The drastic increase in maximum debt capacity between A–graded bond and
BBB–graded bond together with the low yield spread reveals a distinct advantage possessed by BBB–graded bond in terms of flexibility. Against the
pessimistic scenario, issuing BBB–graded bond will left Deluxe with $199 millions of unused debt at minimum before downgrading, which will be
sufficient to sustain the daily operations of a check–printing company in case of recession. Regarding cost of capital, the assumption made by Hudson
Bancorp about equity investors somewhat oversimplifies the market. An increase in financial risk decreases a firm's market value which

Personal Finance
Ryan DuCharme
Stephanie Wilhelm
English 112
20 November 2014 Personal Finance for Young AdultsAsk a random individual if they would like to have more money and the response would be a
resounding "yes!" Who wouldn't? As insatiable, materialistic creatures we always want more, and money is usually the means by which we acquire the
objects we desire. In order to achieve financial security and independence it is imperative to begin as early as possible. As a kid I was incredibly averse
to spending money, and for good reason. I wanted to save my "hard–earned" money. I didn't know what I was saving it for, but I knew I would rather
have the money available for future use than waste it on some toy. I don't recall preparing for retirement or evaluating ... Show more content on
Helpwriting.net ...
For those fortunate to have connections with experienced individuals in the world of finance, take advantage of every bit of advice that comes along.
Regrettably, most high schools don't provide courses that educate students about personal finance, but maybe that will change in the future. An
understanding of personal finance among the youth is alarmingly below where it needs to be and I can't stress enough how important it is to create
healthy habits at a young age in order to set yourself up for success in the not–so–distant

Finance
TABLE OF CONTENTS 0.1 Introduction of Finance in your organization............................................
Task: 1: Be able to explore the sources of finance available to Sainsbury's
1.1: Identify the sources of finance available to Sainsbury's............................................
1.2: assess the implications of the different sources of finance in Sainsbury's.............
1.3: select appropriate sources of finance for a project in Sainsbury's.......................
Task: 2: Be able to analyses the implications of finance as a resource within a business
2.1: assess and compare the costs of different sources of finance in your Sainsbury's........
2.2: explain the importance of financial planning in Sainsbury's..................................
2.3: describe the information needs of ... Show more content on Helpwriting.net ...
There are some kind of short term sources of finance in the form of debts such as bank overdraft, bank loan, creditors, debt factoring.
FIG: 1: SOURCES OF FINANCE
1.2: Assess the implications of different sources of finance in Sainsbury:
As we discuss above there are many sources of finance for company to choose but we must consider about elements related risking, legal, financial and
dilution of control and bankruptcy.
Issued of debts: first, the company (Sainsbury) must concern about tax implication. When issuing debt, the company has to pay tax after they pay
interest for debt holders. Hence, issuing debts will reduce the profit chargeable to tax and increase company profit available for dividends. The effect
here is they don't have pay tax on the interest from holding the debt when they receive profit, they must pay interest for debt holders first then pay
corporate tax on remain money. When they use debt, the use of debt will increases the corporate tax shields and they have to pay an amount interest for
bank or other sources.
However, when using debt sources, the existing shareholders stake would not be diluted because debt holders don't have any voting right in company.
It means when issuing more or less debts, the stake of the existing shareholders would not be reduced and the authority of chief executive officer as
well as the management of company will be intact.
With the debts, the company must have obligation to pay

Finance and Funds
Acknowledgement
I would like to take this opportunity to thank all those who helped me for the successful completion of our first assignment for the module of finance
and funds for travel and tourism.
Firstly I would like to thank our parents, who were always there for me, standing by my side and giving me tremendous support and encouragement
which really boosted me in making this report a success.
I also would like to great thanks to our Module lecturer, name for guiding me throughout this report and giving me endless support which really helped
me through the completion of this report.
And lastly, I would also like to thank all our friends, the lab assistants for enabling me to use the computer laboratories, and the library ... Show more
There are various ratios that can be determined from the balance sheet. They are drawn on by bankers, investors and venture capitalists while indicators
of the strong point and health of the enterprise. A few of the further well–liked ratios are:
Profitability ratios
These are used to assess how successful the management of a business has been at earning profits for the business from sales and from the assets
employed. They are widely used to measure the performance of a company, and therefore by implication, the performance of the management team too.
Gross profit margin
This ratio compares gross profit (profit before deduction of overheads) with sales turnover.
Gross Profit Ratio = (Gross profit / Net sales) Г— 100
Net profit margin This ratio compares net profit (profit after all costs have been accounted for) with sales turn over.

Net Profit Ratio = (Net profit / Net sales) Г— 100
Return on capital employed
This ratio is used to assess how much profit we earn from the investments the shareholders have made in their company Return on capital employed =
Profit for the Year * 100 Equity Shareholders' Fund
Liquidity ratios
This ratio conveys a company's ability to repay short–term creditors out of its total cash. The liquidity ratio is the result of dividing the total cash by
short–term borrowings. It demonstrates the number of times

Project Finance

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