This slide set is a work in progress and is embedded in my Principles of Finance course, which is also a work in progress, that I teach to computer scientists and engineers
http://awesomefinance.weebly.com/
This slide set is a work in progress and is embedded in my Principles of Finance course that I teach to computer scientists and engineers.
http://financefortechies.weebly.com/
This slide set is a work in progress and is embedded in my Principles of Finance course that I teach to computer scientists and engineers.
http://awesome.weebly.com/
This slide set is a work in progress and is embedded in my Principles of Finance course, which is also a work in progress, that I teach to computer scientists and engineers
http://awesomefinance.weebly.com/
glendimplex manufacturing improvement changeNigel Charles
Rework Trend Improvement
Relocation of testing Area
T Card Torque Control System
Kamishibal Job Instruction Sheet
T Card Process Parts Hourly Delivery Status
Rebalance of Range Line 12.
This slide set is a work in progress and is embedded in my Principles of Finance course that I teach to computer scientists and engineers.
http://financefortechies.weebly.com/
This slide set is a work in progress and is embedded in my Principles of Finance course that I teach to computer scientists and engineers.
http://awesome.weebly.com/
This slide set is a work in progress and is embedded in my Principles of Finance course, which is also a work in progress, that I teach to computer scientists and engineers
http://awesomefinance.weebly.com/
glendimplex manufacturing improvement changeNigel Charles
Rework Trend Improvement
Relocation of testing Area
T Card Torque Control System
Kamishibal Job Instruction Sheet
T Card Process Parts Hourly Delivery Status
Rebalance of Range Line 12.
Beyond financing, your syndicate can be a boon to scaling and overcoming obstacles in your startup. Streamline keeping them in the loop by using this compact deck.
Details
~In 6 slides covers all the essential details your syndicate cares about
~Contains tips and step-by-guide to walk you through best practices (see the "Notes" area)
~PPT format for easy modification
Periodic Reassessment, Continuous Improvement of Finance OperationsCognizant
A well-considered and executed transformation roadmap can help finance keep pace with emerging technologies and service delivery models, as well as advance key business objectives.
While there are several approaches - all of which you should explore to find the best fit - this template captures our thoughts on a well put-together board deck.
Details
~20+ slides covering department updates, cash projections, roadmaps, and a whole lot more
~Contains tips and step-by-guide to walk you through best practices (see the "Notes" area in PPT)
~PPT format for easy modification
This presentation gives an overview of the proposed activities, recommendations and success factors for a software organization that wishes to implement a process improvement initiative
This presentation explores how credit unions can promote thrift in an age of excess. It was delivered as part of the CUES Experience webinar series on May 21, 2009.
Bryan Sims, 24 year-old CEO of brass|MEDIA Inc., speaks at a credit union conference about the importance of reaching Generation Y to the financial services industry. Sims outlines basic demographic information of Gen Y, provides statistics illustrating the difficulties in reaching them, shows the power of changing media and technology, while giving examples of how other financial institutions have successfully created programs that resonate with young adults.
brass|MEDIA Inc. is a multimedia and technology company that produces brass|MAGAZINE, a lifestyle money magazine written for young adults, by young adults.
The role of bank branches is changing as traditional cash and check transactions decline. This presentation, from BAI Retail Delivery 2009, includes case studes from Citizens Bank, MidSouth Bank, and Coastal Federal Credit Union.
This template was provided by the Davidson Institute.
The Davidson Institute Team deliver business planning and financial education concepts through courses that can help bring further knowledge and expand on the information that has provided through this seminar. They provide both face to face and on-line learning platforms. If you would like to speak to them on how they may help your organisation, please drop them a note or visit them at davidsoninstitute.edu.au for more information.
In this slidecast we look at a number of innovative business models that have emerged in the private banking industry and we will then learn about an approach that allows us to question, clarify and strengthen our own business model.
Social Media for Bank Investor RelationsDave Hogan
This presentation is from the SNL Financial Bank Investor Relations Symposium in New York on March 17, 2010. It describes how investor relations departments at banks and other financial services companies can incorporate social media tools into their investor relations and corporate communication programs.
Typically, the goals of bank or credit union design and security are at cross purposes.
Design seeks to create a welcoming environment, while security attempts to keep certain people out.
However, it is possible to design beautiful and effective branch environments that are also highly secure.
Small is beautiful. Your credit union can remain small and successful.Tim McAlpine
Presentation given on May 4, 2008 at the CUES West AGM in Ottawa by Tim McAlpine of Currency Marketing. With the tidal wave of mergers and consolidation within the Canadian and US credit union systems, it seems as though getting bigger is the only way for credit unions to survive. However, there are fine examples of very successful credit unions that are bucking the trend and purposefully remaining small. Tim McAlpine will explore how these credit unions are using marketing, technology and good old-fashioned member advocacy to not only remain small, but also continue to be viable and successful.
International Capital BudgetingReview of Domestic Capita.docxnormanibarber20063
International Capital Budgeting
Review of Domestic Capital Budgeting
1.Identify the SIZE and TIMING of all relevant cash flows on a time line.
2.Identify the RISKINESS of the cash flows to determine the appropriate discount rate.
3.Find NPV by discounting the cash flows at the appropriate discount rate.
4.Compare the value of competing cash flow streams at the same point in time.
Review of Domestic Capital Budgeting
The basic net present value equation is
Where:
T = economic life of the project in years.
CFt = expected incremental after-tax cash flow in year t,
TVT = expected after tax terminal value including return of net working capital,
C0 = initial investment at inception,
K = weighted average cost of capital.
K = (1 – )Kl + (1 – t)i
The NPV rule is to accept a project if NPV 0
and to reject a project if NPV 0
Review of Domestic Capital Budgeting
For our purposes it is necessary to expand the NPV equation.
Rt = incremental revenue
OCt = incremental operating costs
Dt = incremental depreciation
It = incremental interest expense
= the marginal tax rate
CFt = (Rt – OCt – Dt – It)(1 – t) + Dt + It (1 – t)
Review of Domestic Capital Budgeting
Alternative Formulations CFt
CFt = (Rt – OCt – Dt – It)(1 – t) + Dt + It (1 – t)
CFt = NIt + Dt + It(1 – t)
CFt = (Rt – OCt – Dt)(1 – t) + Dt
CFt = NOIt(1 – t) + Dt
CFt = (Rt – OCt)(1 – t) + t Dt
CFt = OCFt(1 – t) + t Dt
We can use CFt = (OCFt)(1 – t) + t Dt
to restate the NPV equation
as:
NPV =
S
t = 1
T
CFt
(1 + K)t
– C0
TVT
(1 + K)T
+
NPV =
S
t = 1
T
(OCFt)(1 – t) + t Dt
(1 + K)t
– C0
TVT
(1 + K)T
+
Review of Domestic Capital Budgeting
The Adjusted Present Value Model
Can be converted to adjusted present value (APV)
NPV =
S
t = 1
T
(OCFt)(1 – t)
(1 + K)t
C0
TVT
(1 + K)T
+
t Dt
(1 + K)t
+
–
S
t = 1
T
APV =
S
t = 1
T
(OCFt)(1 – t)
(1 + Ku)t
C0
TVT
(1 + Ku)T
+
t Dt
(1 + i)t
+
–
t It
(1 + i)t
+
The APV model is a value additivity approach to capital budgeting. Each cash flow that is a source of value to the firm is considered individually.
Note that with the APV model, each cash flow is discounted at a rate that is appropriate to the riskiness of the cash flow.
APV =
S
t = 1
T
(OCFt)(1 – t)
(1 + Ku)t
C0
TVT
(1 + Ku)T
+
t Dt
(1 + i)t
+
–
t It
(1 + i)t
+
The Adjusted Present Value Model
Domestic APV Example
Consider this project, the timing and size of the incremental after-tax cash flows for an all-equity firm are:
01 2 3 4
-$1,000 $125 $250 $375 $500
The unlevered cost of equity is r0 = 10%:
= –$1000
= $125
= $250
= $375
I
= 10
NPV
APV =
S
t = 1
T
(OCFt)(1 – t)
(1 + Ku)t
C0
TVT
(1 + Ku)T
+
t Dt
(1 + i)t
+
–
t It
(1 + i)t
+
?
=
CF0
CF1
CF2
CF3
CF4
= $500
Domestic APV Example
Now, imagine that the firm finances the project with $600 of debt at r = 8%.
The tax rate is 40%, so they have an interest tax shield worth t×I = .40×$600×.08 = $19.20 each year.
Monte Carl Simulation is a powerful and effective tool when used properly helps to navigate the expected Net Present Value NPV. This presentation helps to improve the pattern to ackowlege onthe Odessa Investment by Decision Dres.
Basic terms review
Capital budgeting introduction
Capital budgeting technique
Sensitivity analysis
Scenario analysis
present value
potential difficulties and strength of capital budgeting
Capital structure and cost of equity pdfDavid Keck
This slide set is a work in progress and is embedded in my Principles of Finance course, which is also a work in progress, that I teach to computer scientists and engineers
http://awesomefinance.weebly.com/
This slide set is a work in progress and is embedded in my Principles of Finance course, which is also a work in progress, that I teach to computer scientists and engineers
http://awesomefinance.weebly.com/
This slide set is under serious development!
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
Latino Buying Power - May 2024 Presentation for Latino Caucus
Corp finance topics
1.
Corporate
Finance
Topics
2. 2
Topics
¨ Capital
Budge1ng
&
Project
Evalua1on
¨ Taxes
¨ Dividends
¨ Short
selling
¨ Dividend
Irrelevance
Proposi1on
(M&M)
¨ Informa1on
and
agency
issues
3. Capital
Budge1ng
Preliminary
3
PV=
CFi
(1+k)i
i=1
M
∑
NPV=
CFi
(1+k)i
i=0
M
∑
0
1
2
3
4
5
sunk
costs
How do you decide whether to do a particular project or make
a particular investment?
How do you rank projects within your capital budget?
4. Capital
Budge1ng
Methods
¨ Net
present
value
¤ NPV
should
be
posi1ve
¤
is
hurdle
rate
or
project
cost
of
capital
¨ Internal
rate
of
return
¤ IRR
should
exceed
hurdle
rate
¨ Payback
period
¤ Time
periods
to
breakeven
Cash
flows
and
+ming
are
always
given
∑= +
+=
N
1i
i
i
0
)k(1
CF
CFNPV
∑= +
+==
N
1i
i
i
0
IRR)(1
CF
CF0NPV
∑= +
+==
N
1i
i
i
0
)k(1
CF
CF0NPV
0
1
2
3
4
5
sunk
costs
N
k
k
5. Net
Present
Value
Method
¨ Expected
project
cash
flows
are
projected
for
periods
1
to
N
¨ A
discount
rate
for
the
project
is
determined
¤ The
rate
includes
an
adjustment
for
risks
to
the
project
cash
flows
rela1ve
the
firm’s
total
cash
flow
and
cost
of
capital,
kU
¨ The
method
determines
if
the
NPV
is
posi1ve
and
thus
a
value
crea1ng
investment
¨ Alterna1ve
projects
can
be
ranked
in
descending
NPV
order
projectU
N
1i
i
i
0
kkk
)k(1
CF
CFNPV
Δ+=
+
+= ∑=
6. Internal
Rate
of
Return
Method
¨ Find
the
discount
rate,
IRR,
that
equates
NPV
to
zero
¨ The
IRR
should
exceed
a
hurdle
rate
and
thus
creates
value
¨ Rank
alterna1ve
projects
in
descending
order
by
IRR
k
IRR
IRR)(1
CF
CF0NPV
N
1i
i
i
0
≥
+
+== ∑=
7. Payback
Period
Method
¨ How
many
periods,
,
are
required
to
recover
(on
an
NPV
basis)
the
ini1al
investment?
¨ How
many
periods
needed
to
achieve
a
posi1ve
NPV
¨ Use
the
risk
adjusted
discount
rate,
¨ Rank
alterna1ve
projects
in
ascending
payback
period
basis
∑= +
+=≡
N
1i
i
i
0
)k(1
CF
CF0NPV
k
N
9. Income
Tax
Rates
Marginal
Tax
Rate
Single
10% $0
–
$8,025
15% $8,026
–
$32,550
25% $32,551
–
$78,850
28% $78,851
–
$164,550
33% $164,551
–
$357,700
35% $357,701+
Marginal
Tax
Rate
Single
2.56% $0
-‐
$2,400
3.57% $2,401
-‐
$17,500
5.12% $17,501
-‐
$27,000
6.84% $27,001
+
Nebraska
Currently,
the
average
combined
federal
and
state
corporate
tax
rate
in
the
U.S.
is
40.0%,
second
among
OECD
countries
to
Japan's
combined
rate
of
40.69%.
Ordinary
Income
Rate
Long-‐term
Cap
Gain
&
Dividend*
Rate
Short-‐term
Capital
Gain
Rate
Long-‐term
Gain
on
Real
Estate
**
Long-‐term
Gain
on
Collectibles
10% 0% 10% 10% 10%
15% 0% 15% 15% 15%
25% 15% 25% 25% 25%
28% 15% 28% 25% 28%
33% 15% 33% 25% 28%
35% 15% 35% 25% 28%
*
Qualified
dividends
**
$250,000
exemption
on
primary
residence
10. Short
Selling
Long
Investment
(but
short
term
holding
period)
Buy 100 shares
of FMN
in Oct-‐07 for
65.00$
per
share
for
a
total
of
6,500$
"Buy
at
market"
Sell
100 shares
of FMN
in Jul-‐08 for
15.00$
per
share
for
a
total
of
1,500$
"Sell
at
Market"
Net
(5,000)$
Short
Trade
Borrow 100 shares
of FMN
in Oct-‐07 from
your
broker
Sell 100 shares
of FMN
in Oct-‐07 from
your
brokerage
account
at for
65.00$
per
share
for
a
total
of
6,500$
"Sell
short"
Buy
100 shares
of FMN
in Jul-‐08 into
your
brokerage
account for
15.00$
per
share
for
a
cost
of
1,500$
"Buy
to
Cover"
Return 100 shares
of FMN
in Aug-‐08 to
your
broker
Net 5,000$
11. Project
Expected
Cash
Flows
¨ Assume
there
are
three
future
cash
flow
scenarios,
A,
B,
and
C
during
some
future
year.
The
expected
cash
flow
is
during
that
year
is
¨ The
scenarios
are
mutually
exclusive
–
independent
¨ Example
¤ CFA
=
$1,000,000
with
probability
50%
¤ CFB
=
$500,000
with
probability
30%
¤ CFC
=
$150,000
with
probability
20%
¨
¨ The
risk
(variance)
in
the
expected
cash
flow
is
included
in
the
discount
rate
[ ]
1p
p
p
pCFpCFpCFCFE
CBA
CCBBAA
=++
⋅+⋅+⋅=
[ ]
000,680$
%20000,150$%30000,500$%50000,000,1$
CFE
=
⋅+⋅+⋅=
12. Project
Valua1on
¨ Present
value
of
free
cash
flow
–
opera1ng
and
financing
split
using
APV
method
¨ Define
project
cash
flow,
CF,
similar
to
free
cash
flow,
FCF
¨ Include
a
cash
flow
at
1me
0
(likely
an
investment
–
a
nega1ve
cash
flow)
12
∑=
⎥
⎦
⎤
⎢
⎣
⎡
+
+
+
=
N
1i
i
TS
i
i
U
i
0
)k1(
TS
)k1(
FCF
V
∑= +
+=
N
1i
i
i
0
)k1(
CF
CFNPV projectU kkk Δ+=
13. Project
Valua1on
¨ Note
‘direct
method’
for
free
cash
flow
¤ Cash,
not
accrual,
basis
¨ Ignore
non-‐opera1ng
assets,
dividends,
interest
expense
and
income
13
RC:
cash
revenue
(excluding
IDI)
COGSC:
cash
cost
of
goods
sold
or
cost
of
revenue
OXC:
cash
opera1ng
expenses
(SG&A,
R&D)
ITC:
cash
taxes
paid
CX:
capital
expenses
CS:
cash
from
sale
of
assets
ΔCE:
addi1onal
opera1ng
cash
required
ITCCECSCXOXCCOGSCRCCF −Δ−+−−−=
τ⋅−τ⋅+−Δ−+−−−= IXIDIITCOCECSCXOXCCOGSCRCFCF
14. Dividend
Payments
14
S M T W Th F S Jun-‐08
1 2 3 4 5 6 7
8 9 10
11
Announcement
Date
12 13 14
15 16 17 18 19 20 21
22 23 21 22 23 24 25
29 27 28 29 30
S M T W Th F S Aug-‐08
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18
19
Ex-‐
Dividend
Date
20
21
Record
Date
22 23
24 25 26 27 28 29 30
S M T W Th F S Sep-‐08
1 2 3 4 5 6
7 8 9 10
11
Payable
Date 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
26 29 30
Microso0
Declares
Quarterly
Dividend
REDMOND,
Wash.
—
June
11,
2008
—
Microsok
Corp.
today
announced
that
its
board
of
directors
declared
a
quarterly
dividend
of
$0.11
per
share.
The
dividend
is
payable
Sept.
11,
2008,
to
shareholders
of
record
on
Aug.
21,
2008.
The
ex-‐dividend
date
will
be
Aug.
19,
2008.
Opening
stock
price
on
19
Aug
=
Closing
price
on
18
Aug
–
dividend
per
share
($0.11)
+
price
gain
(loss)
due
to
over
night
changes
in
supply
and
demand
for
MSFT
shares
15. Dividend
Payments
15
Date Open High Low Close Volume
Adj
Close
30-‐Nov-‐04 26.75 27.01 26.7 26.81 75,960,400 25.57
29-‐Nov-‐04 26.64 26.95 26.61 26.77 67,079,900 25.53
26-‐Nov-‐04 26.56 26.82 26.55 26.6 24,398,700 25.36
24-‐Nov-‐04 26.62 26.73 26.4 26.64 60,069,200 25.4
23-‐Nov-‐04 26.52 26.7 26.4 26.53 70,459,700 25.3
22-‐Nov-‐04 26.75 26.82 26.1 26.65 92,410,800 25.41
19-‐Nov-‐04 27.03 27.07 26.84 26.86 85,808,600 25.61
18-‐Nov-‐04 27.13 27.17 27 27.07 63,249,900 25.81
17-‐Nov-‐04 27.25 27.35 27.06 27.17 58,830,700 25.91
16-‐Nov-‐04 27.33 27.34 27.05 27.12 64,522,600 25.86
15-‐Nov-‐04 27.34 27.5 27.2 27.39 104,468,000 26.12
15-‐Nov-‐04 $
3.08
Dividend
12-‐Nov-‐04 30.16 30.2 29.8 29.97 162,269,000 25.64
11-‐Nov-‐04 29.89 30.08 29.82 29.98 87,358,900 25.65
10-‐Nov-‐04 29.92 30 29.69 29.73 84,097,700 25.44
9-‐Nov-‐04 29.43 29.89 29.35 29.77 100,401,000 25.47
8-‐Nov-‐04 29.18 29.48 29.13 29.28 112,802,100 25.05
5-‐Nov-‐04 29.21 29.36 29.03 29.31 95,337,700 25.08
4-‐Nov-‐04 28.38 29 28.38 29 87,867,700 24.81
3-‐Nov-‐04 28.65 28.65 28.31 28.47 79,666,700 24.36
2-‐Nov-‐04 28.26 28.47 28.03 28.24 89,417,100 24.16
1-‐Nov-‐04 28.16 28.28 27.96 28.08 72,930,900 24.00
Yahoo
finance
‘historical
prices’
for
MSFT
during
Nov
2004
REDMOND,
Wash.
July
20,
2004
Microsok
Corp.
today
announced
that
its
board
of
directors
approved
an
$0.08
per
share
quarterly
dividend,
plans
to
buy
back
up
to
$30
billion
of
the
company's
stock
over
the
next
four
years,
and
a
special
one-‐1me
dividend
of
$3
per
share.
hnp://www.microsok.com/presspass/
press/2004/jul04/07-‐20boardPR.mspx
The
3rd
quarter
dividend
ex-‐dividend
date
was
August
23
The
4th
quarter
and
special
dividends
($3.08)
were
paid
on
Dec
2
to
shareholders
of
record
on
Nov
17.
The
ex-‐dividend
date
was
Nov
15.
16. Dividend
Payments
16
Date Open Close
Opening
Gap
30-‐Nov-‐04 26.75 26.81 -‐0.02
29-‐Nov-‐04 26.64 26.77 0.04
26-‐Nov-‐04 26.56 26.6 -‐0.08
24-‐Nov-‐04 26.62 26.64 0.09
23-‐Nov-‐04 26.52 26.53 -‐0.13
22-‐Nov-‐04 26.75 26.65 -‐0.11
19-‐Nov-‐04 27.03 26.86 -‐0.04
18-‐Nov-‐04 27.13 27.07 -‐0.04
17-‐Nov-‐04 27.25 27.17 0.13
16-‐Nov-‐04 27.33 27.12 -‐0.06
15-‐Nov-‐04 27.34 27.39 -‐2.63
12-‐Nov-‐04 30.16 29.97 0.18
11-‐Nov-‐04 29.89 29.98 0.16
10-‐Nov-‐04 29.92 29.73 0.15
9-‐Nov-‐04 29.43 29.77 0.15
8-‐Nov-‐04 29.18 29.28 -‐0.13
5-‐Nov-‐04 29.21 29.31 0.21
4-‐Nov-‐04 28.38 29 -‐0.09
3-‐Nov-‐04 28.65 28.47 0.41
2-‐Nov-‐04 28.26 28.24 0.18
1-‐Nov-‐04 28.16 28.08 0.19
November
2004
S M T W Th F S
1 2 3 4 5 6
7 8 9 10 11 12 13
14
15
Ex-‐
Dividend
Date
16
17
Record
Date
18 19 20
21 22 23 24 25 26 27
28 29 30
Opening
price
on
15
Nov
=
Closing
price
on
12
Nov
-‐
$3.08
+
price
gain
due
to
changes
over
the
week
end
for
MSFT
stock
$27.34
=
$29.97
-‐
$3.08
+
$0.45
17. 17
M&M
Proposi1on
3
¨ “Dividend
Irrelevance
Proposi1on”
¨ Dividend
payout
policy
is
irrelevant
to
total
shareholder
value
under
certain
condi1ons
¨ Illustra1on
via
an
all-‐equity,
constant
growth
firm
with
no
debt
and
no
non-‐opera1ng
assets
¤ D
=
0,
NOA
=
0,
C
=
IC,
T
=
0
NOA
L
OA PAR
APC
TS
RE
EC
EC:
Total
common
equity
TS:
Treasury
stock
(common)
18. 18
Example
NOPAT0
DIV0
FCF0
IC0
IC1
IC2
FCF1
FCF2
ΔIC
is
the
reinvestment
needed
to
maintain
gFCF
at
5%
and
expected
return
on
opera1ng
assets
at
10%
In
this
example
FCF
and
ΔIC
are
defined
to
be
the
op1mal
values
for
an
all
equity
firm
For
an
all
equity
firm,
all
of
the
FCF
should
be
paid
out
as
a
dividend,
if
•
dividend
and
capital
gain
taxes
are
equal
• A
change
in
dividend
payout
does
not
signal
financial
distress
k 10%
gFCF 5%
EBIT 12,500,000$
τ 20%
ns 8,000,000
ΔIC 6,000,000$
DB -‐$
NOA -‐$
20. 20
Pay
all
FCF
as
dividend:
Shareholder
Value
m88$
0$m4$0$m84$
ECDIVNOA
%5%10
)05.1(m4$
ECDIVNOA
gk
)g1(FCF
S
FCF
FCF
=
−++=
Δ−+Δ+
−
⋅
=
Δ−+Δ+
−
+⋅
=
Total
shareholder
value
Total
shareholder
value
per
share
Fair
value
stock
price
p
Cash
flow
to
and
from
the
shareholder
per
share
( ) ns
EC
ns
DIV
ns
NOA
nsgk
)g1(FCF
s
FCF
FCF Δ
−+
Δ
+
⋅−
+⋅
=
$11.00
$0.50$10.50
m8
0$
m8
m4$
m8
0$
m8
m84$
s
=
+=
−++=
24. 24
Example:
Summary
Case
2
ΔNOA=change
in
excess
cash
Paid
out
too
much
dividend,
so
raise
necessary
equity
capital
in
market
DIV ΔNOA ΔEC pv(fcf) Δnoa p div Δec s
-‐$
4,000,000$
-‐$
10.50$
0.50$
11.00$
-‐$
-‐$
11.00$
1,000,000$
3,000,000$
-‐$
10.50$
0.38$
10.88$
0.13$
-‐$
11.00$
2,000,000$
2,000,000$
-‐$
10.50$
0.25$
10.75$
0.25$
-‐$
11.00$
3,000,000$
1,000,000$
-‐$
10.50$
0.13$
10.63$
0.38$
-‐$
11.00$
4,000,000$
-‐$
-‐$
10.50$
-‐$
10.50$
0.50$
-‐$
11.00$
5,000,000$
-‐$
1,000,000$
10.50$
-‐$
10.50$
0.63$
(0.13)$
11.00$
6,000,000$
-‐$
2,000,000$
10.50$
-‐$
10.50$
0.75$
(0.25)$
11.00$
7,000,000$
-‐$
3,000,000$
10.50$
-‐$
10.50$
0.88$
(0.38)$
11.00$
8,000,000$
-‐$
4,000,000$
10.50$
-‐$
10.50$
1.00$
(0.50)$
11.00$
9,000,000$
-‐$
5,000,000$
10.50$
-‐$
10.50$
1.13$
(0.63)$
11.00$
10,000,000$
-‐$
6,000,000$
10.50$
-‐$
10.50$
1.25$
(0.75)$
11.00$
Case
1
Case
3
25. Share
Buyback
¨ Use
FCF
to
buy
back
shares
¨ $6m
investment
needed
to
maintain
FCF
growth
of
5%
¨ Raise
$6m
in
common
equity
¤ Assume
buy
back
has
no
transac1on
cost
m0$DIV
m4$FCF
m10$NOPAT
=
=
=
00.11$50.0$50.10$
m8
m4$
0$0$50.10$
ns
EC
ns
DIV
ns
NOA
50.10$s
=+=
−
−++=
Δ
−+
Δ
+=
Operating
Assets
Current
Liabilitites
∆OA 6$
∆CL -‐$
Nonoperating
Assets
Noncurrent
Liabilities
∆NOA -‐$
∆NCL -‐$
Shareholders'
Equity
∆PAR -‐$
∆APC -‐$
∆TS (4)$
∆EC (4)$
∆RE 10$
∆EB 6$
∆TA 6$
∆LE 6$
26. Alterna1ve
Views
of
Case
2
¨ Alterna1ve
B:
Shareholder
creates
her
own
dividend
¤ She
has
1000
shares
with
total
value
of
$11,000
¤ Seeks
a
dividend
yield
of
4.545%
=
$0.50/$11.00
¤ So
she
sells
45.45
shares
worth
$500
=
$11,000·∙
0.04545
¤ So
she
has
954.5454
shares
remaining
¤ With
total
value
of
$10,500
¤ Addi1onal
assump1ons
in
this
alterna1ve
case
n No
transac1on
cost
for
shareholder
n Dividend
and
capital
gain
tax
equivalence
for
shareholder
n Frac1onal
share
transac1on
possible
27. Essen1al
Points
¨ Proposi1on
3
¤ The
dividend
policy
is
relevant
to
total
shareholder
value
in
the
case
where
n The
firm
has
a
transac1on
fee
for
buying
back
or
selling
equity
n The
changing
of
dividend
does
signal
a
change
in
firm
value
n Shareholder
dividend
and
capital
gain
tax
rates
are
different
n The
shareholder
has
a
transac1on
fee
for
buying
and
selling
equity
n Frac1onal
shares
can
be
bought
and
sold
28. Informa1on
and
Agency
Issues
¨ Informa1on
asymmetry
¤ Adverse
selec1on
¤ Moral
hazard
¨ Incomplete
informa1on
¨ Principal
Agent
Problem
¤ Alignment
of
interests
¤ Agency
Cost