Mgt 671 chapter 9 ppt
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This document discusses the cost of capital and corporate valuation. It provides an overview of the cost of capital and its importance in corporate valuation. It also includes a figure showing the capital structure of MicroDrive, Inc. and a table displaying average flotation costs for debt and equity.
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Mgt 671 chapter 12 ppt
The document contains 9 figures that present financial projections and analyses for a company called MicroDrive, including:
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- Key inputs and projections for possible strategic initiatives and their effects on operations.
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The document contains 9 figures that present financial projections and analyses for a company called MicroDrive, including:
- MicroDrive's most recent financial statements and forecast for the status quo scenario.
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- Projected financial statements under the status quo scenario and outcomes of strategic initiatives.
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The document discusses distributions to shareholders through dividends and share repurchases. It includes tables and figures showing dividend payouts and yields, a company's distribution ratio under different investment opportunities, and financial projections for a conglomerate distributing cash through dividends versus share repurchases, including the company's intrinsic stock price under each distribution method.
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The document discusses techniques for cash flow estimation and risk analysis for projects, including figures and tables showing:
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This document discusses factors that influence interest rates according to the loanable funds theory. It explains that interest rates are determined by the supply and demand for loanable funds in the market. The demand for funds comes from households, businesses, governments, and foreign entities, while the supply comes from households and other entities. Monetary policy, economic growth, inflation, budget deficits, and foreign capital flows are some of the key factors that can impact supply and demand in the loanable funds market and influence interest rate movements. The document provides a framework for forecasting interest rates by projecting future supply of and demand for loanable funds.
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The document discusses strategic management and the competitive landscape. It defines key terms like strategy, competitive advantage, and the strategic management process. The strategic management process involves analyzing internal/external factors, developing vision/mission/strategies, and implementing strategies to achieve competitive advantages and above-average returns. The competitive landscape is increasingly complex due to globalization and rapid technological changes. Globalization has led to new opportunities but also risks as firms must meet global standards. Technology diffusion and disruptive technologies also create unstable environments, requiring firms to constantly innovate.
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Analysis of Financial StatementsCHAPTER 3© 2020 Cengage Lear.docx
Analysis of Financial Statements
CHAPTER 3
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
Ratio analysis
Ratios
Common size statements
Percent change statement
DuPont equation
Limitations of ratio analysis
Qualitative factors
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Determinants of Intrinsic Value: Using Ratio Analysis
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Overview
Ratios facilitate comparison of:
One company over time
One company versus other companies
Ratios are used by:
Lenders to determine creditworthiness
Stockholders to estimate future cash flows and risk
Managers to identify areas of weakness and strength
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Income Statement20192020ESales $6,000 $6,600 COGS except depr. 4,800 5,210 Other expenses 320 370 Deprec. 420 400 EBIT $ 460 $ 620 Int. expense 108 100 EBT $ 352 $ 520 Taxes (40%) 88 130 Net income $ 264 $ 390
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Balance Sheets: Assets20192020ECash $ 50 $ 60 S-T invest. 10 50 AR 520 530 Inventories 820 660 Total CA $1,400 $1,300 Net FA 3,500 3,700 Total assets $4,900 $5,000
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Balance Sheets: Liabilities & Equity20192020EAccts. payable $ 400 $ 330 Notes payable 250 100 Accruals 240 270 Total CL $ 890 $ 700 Long-term debt 1,100 1,100 Total liabilities $1,990 $1,800 Common stock 1,000 1,000 Ret. earnings 1,910 2,200 Total equity $2,910 $3,200 Total L&E $4,900 $5,000
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for ...
BUS 121 Chapter 3
The document discusses research and organization techniques for writing. It describes conducting both informal research like interviews and brainstorming, as well as formal research like investigating primary sources. It recommends organizing information into outlines with a main topic and subpoints. The document also discusses achieving variety in sentences, avoiding common errors, and emphasizing important ideas.
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The document discusses factors that affect bond prices, including interest rates, credit risk, and economic conditions. It provides the bond valuation process and formula, showing that bond prices are inversely related to interest rates. Changes in inflation, growth, money supply, and deficits can impact the risk-free rate component of required returns. Economic growth and issuer characteristics affect credit risk premiums. Overall, bond prices are influenced by changes that alter the discount rate or expected cash flows from the bond.
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Financial Statements, Cash Flow, and TaxesCHAPTER 2© 2020 Ce.docx
Financial Statements, Cash Flow, and Taxes
CHAPTER 2
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
Income statement
Balance sheet
Statement of cash flows
Free cash flow
Performance measures
Corporate taxes
Personal taxes
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Determinants of Intrinsic Value: Calculating FCF
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Computron Inc.
Computron expanded operations in 2019. Following slides show key information and financial statements to evaluate the expansions.20182019Stock price$50.00$30.00Shares outstanding (millions)100100Common dividends (millions)$90$84Tax rate25%25%Cost of capital (WACC)10.00%10.00%
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Income Statement (Millions of Dollars)20182019Sales $ 5,500 $ 6,000 COGS 4,300 4,800 Deprec. 290 320 Other expenses 350 420 Tot. op. costs $ 4,940 $ 5,540 EBIT $ 560 $ 460 Int. expense 68 108 Pre-tax earnings $ 492 $ 352 Taxes (25%) 123 88 Net income $ 369 $ 264
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What happened to sales and net income?
Sales increased by $500 million (9% growth).
59% increase in interest payments.
Net income fell by $105 million.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Balance Sheet: Assets (Millions of Dollars)20182019Cash$ 60 $ 50 S-T invest. 100 10 AR 400 520 Inventories 620 820 Total CA $ 1,180 $ 1,400 Gross FA $ 3,900 $ 4,820 Less: Depr. 1,000 1,320 Net FA $ 2,900 $ 3,500 Total assets $ 4,080 $ 4,900
© 2020 Cengage Learn ...
Định chế tài chính
This document provides an overview of financial markets and institutions. It defines key terms like financial markets, securities, and the roles of various financial institutions. It describes how financial markets facilitate the flow of funds from surplus to deficit units. It also discusses how the credit crisis of 2007-2008 exposed financial institutions to significant credit risk from mortgage defaults, spreading systemic risk throughout the financial system. The government responded with emergency measures and subsequent financial reform legislation.
Madura13e_Ch01.pptx
Identify the management goal and organizational structure of the Multinational Corporation (MNC).
Describe the key theories that justify international business.
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Financial Options and Applications in Corporate FinanceCHAPTER
Financial Options and Applications in Corporate Finance
CHAPTER 8
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
Financial Options Terminology
Option Price Relationships
Black-Scholes Option Pricing Model
Put-Call Parity
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Big Picture: The Value of a Stock Option
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is a financial option?
An option is a contract which gives its holder the right, but not the obligation, to buy (or sell) an asset at some predetermined price within a specified period of time.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is the single most important
characteristic of an option?
It does not obligate its owner to take any action. It merely gives the owner the right to buy or sell an asset.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (1 of 8)
Call option: An option to buy a specified number of shares of a security within some future period.
Put option: An option to sell a specified number of shares of a security within some future period.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (2 of 8)
Strike (or exercise) price: The price stated in the option contract at which the security can be bought or sold.
Expiration date: The last date the option can be exercised.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (3 of 8)
Exercise value: The value of a call option if it were exercised today =
Max[0, ...
Financial Options and Applications in Corporate FinanceCHAPTER.docx
Financial Options and Applications in Corporate Finance
CHAPTER 8
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
Financial Options Terminology
Option Price Relationships
Black-Scholes Option Pricing Model
Put-Call Parity
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Big Picture: The Value of a Stock Option
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is a financial option?
An option is a contract which gives its holder the right, but not the obligation, to buy (or sell) an asset at some predetermined price within a specified period of time.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is the single most important
characteristic of an option?
It does not obligate its owner to take any action. It merely gives the owner the right to buy or sell an asset.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (1 of 8)
Call option: An option to buy a specified number of shares of a security within some future period.
Put option: An option to sell a specified number of shares of a security within some future period.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (2 of 8)
Strike (or exercise) price: The price stated in the option contract at which the security can be bought or sold.
Expiration date: The last date the option can be exercised.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (3 of 8)
Exercise value: The value of a call option if it were exercised today =
Max[0, ...
Financial Options and Applications in Corporate FinanceCHAPTER.docx
Financial Options and Applications in Corporate Finance
CHAPTER 8
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
Financial Options Terminology
Option Price Relationships
Black-Scholes Option Pricing Model
Put-Call Parity
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Big Picture: The Value of a Stock Option
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is a financial option?
An option is a contract which gives its holder the right, but not the obligation, to buy (or sell) an asset at some predetermined price within a specified period of time.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is the single most important
characteristic of an option?
It does not obligate its owner to take any action. It merely gives the owner the right to buy or sell an asset.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (1 of 8)
Call option: An option to buy a specified number of shares of a security within some future period.
Put option: An option to sell a specified number of shares of a security within some future period.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (2 of 8)
Strike (or exercise) price: The price stated in the option contract at which the security can be bought or sold.
Expiration date: The last date the option can be exercised.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (3 of 8)
Exercise value: The value of a call option if it were exercised today =
Max[0,.
Financial options and applications in corporate finance chapter
This document discusses financial options and their pricing. It begins with definitions of key option terminology like calls, puts, strike prices, expiration dates, exercise values, and covered vs uncovered options. It then explains how to model option prices using the binomial model and shows how to construct a replicating portfolio that produces the same payoffs as an option to price it. The goal of these techniques is to determine the theoretical fair value of an option so traders cannot profit off of mispriced options through arbitrage opportunities.
Chapter 1.pptx
This document provides an overview of key topics in corporate finance and financial management from Chapter 1 of the textbook "Financial Management: Theory and Practice". It discusses the objectives of firms to maximize wealth, forms of business organization from sole proprietorships to corporations, and determinants of a firm's fundamental value including free cash flows, weighted average cost of capital, and discounting future cash flows. It also covers financial securities, markets, institutions and the roles of savers and borrowers of capital.
© 2010 Cengage Learning. All Rights Reserved. May not be cop.docx
The document discusses forecasting exchange rates. It covers why firms forecast exchange rates, common forecasting techniques including technical, fundamental, and market-based approaches, evaluating forecast performance, and forecasting under different market efficiency assumptions. Techniques include using historical exchange rate data, economic fundamentals, spot and forward rates, and combinations of approaches. Forecast errors are evaluated based on size, over time horizons, currencies, and statistical tests for bias.
Chapter 1 An Investment Perspective of Human Resource Managemen.docx
Chapter 1: An Investment Perspective of Human Resource Management
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Strategic View of Human Resources
Employees are human assets
Increase in value to organization and marketplace when investments of appropriate policies and programs are applied
Effective organizations recognize that employees have value
Much as organization’s physical and capital assets have value
Employees are valuable source of sustainable competitive advantage
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Exhibit 1.1: Sources of Employee Value
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Sources of Employee Value
Technical Knowledge
Markets, processes, customers, environment
Ability to Learn and Grow
Openness to new ideas
Acquisition of knowledge and skills
Decision Making Capabilities
Motivation
Commitment
Teamwork
Interpersonal skills, leadership ability
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Adopting an Investment Perspective
Determines how to best invest in people
Costs
Out-of-pocket
Opportunity
Human assets become competitive advantage
Required skills become less manual, more knowledge-based
Appropriate, integrated, strategy-consistent approach is needed
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Dilemma
Failure to invest in employees causes
Inefficiency
Weakening of organization’s competitive position
Human assets are risky investment
Require extra effort to ensure that they are not lost
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Exhibit 1.2: Types of Organization Assets/Capital
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Research Findings
HR practices directly related to profitability and market value
Primary reason for profitability:
Effective management of human capital
Integrated management of human capital can result in 47% increase in market value
Top 10% of organizations studied experienced 391% return on investment in management of human capital
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Exhibit 1.3: The HR Value Chain
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Human Resource Metrics
Wall Street analysts still generally fail to acknowledge human capital in assessing the value of an organization and the effect that human resources can have on stock price
This is rooted in the fact tha.
PowerPoint Slides prepared by Andreea CHIRITESCUEastern.docx
PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
When Other Firms
Don’t Respond
*
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
CHAPTER 7
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Figure 7.1
Standards of living are represented by the income per person. The standard of living in each nation is shown in this map.
Per Capita Income by Country
*
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
ChoicesStrategy
Is all about making choicesProduction possibilities curve, PPC
Combinations of outputs
That can be produced/created
When existing resources and technology are fully and efficiently utilized
Trade-off curve
In order to have more of one item one must give up some of the other item
*
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
ChoicesPoints on the PPC
Resources are used fully and efficiently Points inside PPC
Resources are used inefficiently Points outside PPC
Impossible to attain
*
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Figure 7.2
Points B and D are fully and efficiently using available resources. At point A, resources are not being efficiently used. Point C illustra.
201
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This document discusses different types of international arbitrage opportunities and interest rate parity. It defines locational, triangular, and covered interest arbitrage, explaining how each works and how currency prices realign in response. It also explains interest rate parity, how the forward premium is determined based on interest rate differentials between countries, and factors like transaction costs that can affect parity. Diagrams and examples are provided to illustrate these concepts.
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Analysis of Financial StatementsCHAPTER 3© 2020 Cengage Lear.docx
Analysis of Financial Statements
CHAPTER 3
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
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© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Determinants of Intrinsic Value: Using Ratio Analysis
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Overview
Ratios facilitate comparison of:
One company over time
One company versus other companies
Ratios are used by:
Lenders to determine creditworthiness
Stockholders to estimate future cash flows and risk
Managers to identify areas of weakness and strength
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Income Statement20192020ESales $6,000 $6,600 COGS except depr. 4,800 5,210 Other expenses 320 370 Deprec. 420 400 EBIT $ 460 $ 620 Int. expense 108 100 EBT $ 352 $ 520 Taxes (40%) 88 130 Net income $ 264 $ 390
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Balance Sheets: Assets20192020ECash $ 50 $ 60 S-T invest. 10 50 AR 520 530 Inventories 820 660 Total CA $1,400 $1,300 Net FA 3,500 3,700 Total assets $4,900 $5,000
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Balance Sheets: Liabilities & Equity20192020EAccts. payable $ 400 $ 330 Notes payable 250 100 Accruals 240 270 Total CL $ 890 $ 700 Long-term debt 1,100 1,100 Total liabilities $1,990 $1,800 Common stock 1,000 1,000 Ret. earnings 1,910 2,200 Total equity $2,910 $3,200 Total L&E $4,900 $5,000
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for ...
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Financial Statements, Cash Flow, and TaxesCHAPTER 2© 2020 Ce.docx
Financial Statements, Cash Flow, and Taxes
CHAPTER 2
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
Income statement
Balance sheet
Statement of cash flows
Free cash flow
Performance measures
Corporate taxes
Personal taxes
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Determinants of Intrinsic Value: Calculating FCF
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Computron Inc.
Computron expanded operations in 2019. Following slides show key information and financial statements to evaluate the expansions.20182019Stock price$50.00$30.00Shares outstanding (millions)100100Common dividends (millions)$90$84Tax rate25%25%Cost of capital (WACC)10.00%10.00%
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Income Statement (Millions of Dollars)20182019Sales $ 5,500 $ 6,000 COGS 4,300 4,800 Deprec. 290 320 Other expenses 350 420 Tot. op. costs $ 4,940 $ 5,540 EBIT $ 560 $ 460 Int. expense 68 108 Pre-tax earnings $ 492 $ 352 Taxes (25%) 123 88 Net income $ 369 $ 264
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What happened to sales and net income?
Sales increased by $500 million (9% growth).
59% increase in interest payments.
Net income fell by $105 million.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Balance Sheet: Assets (Millions of Dollars)20182019Cash$ 60 $ 50 S-T invest. 100 10 AR 400 520 Inventories 620 820 Total CA $ 1,180 $ 1,400 Gross FA $ 3,900 $ 4,820 Less: Depr. 1,000 1,320 Net FA $ 2,900 $ 3,500 Total assets $ 4,080 $ 4,900
© 2020 Cengage Learn ...
Định chế tài chính
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Madura13e_Ch01.pptx
Identify the management goal and organizational structure of the Multinational Corporation (MNC).
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Financial Options and Applications in Corporate FinanceCHAPTER
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© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
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© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Big Picture: The Value of a Stock Option
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is a financial option?
An option is a contract which gives its holder the right, but not the obligation, to buy (or sell) an asset at some predetermined price within a specified period of time.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is the single most important
characteristic of an option?
It does not obligate its owner to take any action. It merely gives the owner the right to buy or sell an asset.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (1 of 8)
Call option: An option to buy a specified number of shares of a security within some future period.
Put option: An option to sell a specified number of shares of a security within some future period.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (2 of 8)
Strike (or exercise) price: The price stated in the option contract at which the security can be bought or sold.
Expiration date: The last date the option can be exercised.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (3 of 8)
Exercise value: The value of a call option if it were exercised today =
Max[0, ...
Financial Options and Applications in Corporate FinanceCHAPTER.docx
Financial Options and Applications in Corporate Finance
CHAPTER 8
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
Financial Options Terminology
Option Price Relationships
Black-Scholes Option Pricing Model
Put-Call Parity
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Big Picture: The Value of a Stock Option
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is a financial option?
An option is a contract which gives its holder the right, but not the obligation, to buy (or sell) an asset at some predetermined price within a specified period of time.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is the single most important
characteristic of an option?
It does not obligate its owner to take any action. It merely gives the owner the right to buy or sell an asset.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (1 of 8)
Call option: An option to buy a specified number of shares of a security within some future period.
Put option: An option to sell a specified number of shares of a security within some future period.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (2 of 8)
Strike (or exercise) price: The price stated in the option contract at which the security can be bought or sold.
Expiration date: The last date the option can be exercised.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (3 of 8)
Exercise value: The value of a call option if it were exercised today =
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Financial Options and Applications in Corporate FinanceCHAPTER.docx
Financial Options and Applications in Corporate Finance
CHAPTER 8
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Topics in Chapter
Financial Options Terminology
Option Price Relationships
Black-Scholes Option Pricing Model
Put-Call Parity
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
The Big Picture: The Value of a Stock Option
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is a financial option?
An option is a contract which gives its holder the right, but not the obligation, to buy (or sell) an asset at some predetermined price within a specified period of time.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
What is the single most important
characteristic of an option?
It does not obligate its owner to take any action. It merely gives the owner the right to buy or sell an asset.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (1 of 8)
Call option: An option to buy a specified number of shares of a security within some future period.
Put option: An option to sell a specified number of shares of a security within some future period.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (2 of 8)
Strike (or exercise) price: The price stated in the option contract at which the security can be bought or sold.
Expiration date: The last date the option can be exercised.
© 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Option Terminology (3 of 8)
Exercise value: The value of a call option if it were exercised today =
Max[0,.
Financial options and applications in corporate finance chapter
This document discusses financial options and their pricing. It begins with definitions of key option terminology like calls, puts, strike prices, expiration dates, exercise values, and covered vs uncovered options. It then explains how to model option prices using the binomial model and shows how to construct a replicating portfolio that produces the same payoffs as an option to price it. The goal of these techniques is to determine the theoretical fair value of an option so traders cannot profit off of mispriced options through arbitrage opportunities.
Chapter 1.pptx
This document provides an overview of key topics in corporate finance and financial management from Chapter 1 of the textbook "Financial Management: Theory and Practice". It discusses the objectives of firms to maximize wealth, forms of business organization from sole proprietorships to corporations, and determinants of a firm's fundamental value including free cash flows, weighted average cost of capital, and discounting future cash flows. It also covers financial securities, markets, institutions and the roles of savers and borrowers of capital.
© 2010 Cengage Learning. All Rights Reserved. May not be cop.docx
The document discusses forecasting exchange rates. It covers why firms forecast exchange rates, common forecasting techniques including technical, fundamental, and market-based approaches, evaluating forecast performance, and forecasting under different market efficiency assumptions. Techniques include using historical exchange rate data, economic fundamentals, spot and forward rates, and combinations of approaches. Forecast errors are evaluated based on size, over time horizons, currencies, and statistical tests for bias.
Chapter 1 An Investment Perspective of Human Resource Managemen.docx
Chapter 1: An Investment Perspective of Human Resource Management
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Strategic View of Human Resources
Employees are human assets
Increase in value to organization and marketplace when investments of appropriate policies and programs are applied
Effective organizations recognize that employees have value
Much as organization’s physical and capital assets have value
Employees are valuable source of sustainable competitive advantage
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Exhibit 1.1: Sources of Employee Value
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Sources of Employee Value
Technical Knowledge
Markets, processes, customers, environment
Ability to Learn and Grow
Openness to new ideas
Acquisition of knowledge and skills
Decision Making Capabilities
Motivation
Commitment
Teamwork
Interpersonal skills, leadership ability
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Adopting an Investment Perspective
Determines how to best invest in people
Costs
Out-of-pocket
Opportunity
Human assets become competitive advantage
Required skills become less manual, more knowledge-based
Appropriate, integrated, strategy-consistent approach is needed
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
A Dilemma
Failure to invest in employees causes
Inefficiency
Weakening of organization’s competitive position
Human assets are risky investment
Require extra effort to ensure that they are not lost
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Exhibit 1.2: Types of Organization Assets/Capital
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Research Findings
HR practices directly related to profitability and market value
Primary reason for profitability:
Effective management of human capital
Integrated management of human capital can result in 47% increase in market value
Top 10% of organizations studied experienced 391% return on investment in management of human capital
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Exhibit 1.3: The HR Value Chain
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Human Resource Metrics
Wall Street analysts still generally fail to acknowledge human capital in assessing the value of an organization and the effect that human resources can have on stock price
This is rooted in the fact tha.
PowerPoint Slides prepared by Andreea CHIRITESCUEastern.docx
PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
When Other Firms
Don’t Respond
*
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
CHAPTER 7
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Figure 7.1
Standards of living are represented by the income per person. The standard of living in each nation is shown in this map.
Per Capita Income by Country
*
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
ChoicesStrategy
Is all about making choicesProduction possibilities curve, PPC
Combinations of outputs
That can be produced/created
When existing resources and technology are fully and efficiently utilized
Trade-off curve
In order to have more of one item one must give up some of the other item
*
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
ChoicesPoints on the PPC
Resources are used fully and efficiently Points inside PPC
Resources are used inefficiently Points outside PPC
Impossible to attain
*
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Figure 7.2
Points B and D are fully and efficiently using available resources. At point A, resources are not being efficiently used. Point C illustra.
201
The document provides an overview of key concepts related to saving, investment, and the financial system. It discusses how the financial system matches savers with borrowers through financial markets and intermediaries like banks and mutual funds. It explains that in a closed economy, saving must equal investment and explores how budget deficits and surpluses impact public saving. The document also discusses the meaning of private saving and investment and how interest rates adjust in financial markets to equalize the supply and demand of loanable funds. Finally, it notes that budget deficits can "crowd out" private investment and thereby reduce long-run economic growth.
Madura_IFM10e_PPT_Ch07 (1).pptx
This document discusses different types of international arbitrage opportunities and interest rate parity. It defines locational, triangular, and covered interest arbitrage, explaining how each works and how currency prices realign in response. It also explains interest rate parity, how the forward premium is determined based on interest rate differentials between countries, and factors like transaction costs that can affect parity. Diagrams and examples are provided to illustrate these concepts.
Similar to Mgt 671 chapter 9 ppt (20)
ADV Slides: Strategies for Transitioning to a Cloud-First Enterprise
ADV Slides: Strategies for Transitioning to a Cloud-First Enterprise
Analysis of Financial StatementsCHAPTER 3© 2020 Cengage Lear.docx
Analysis of Financial StatementsCHAPTER 3© 2020 Cengage Lear.docx
Chapter 2 Determination of Interest Rates (1).pptx
Chapter 2 Determination of Interest Rates (1).pptx
Financial Statements, Cash Flow, and TaxesCHAPTER 2© 2020 Ce.docx
Financial Statements, Cash Flow, and TaxesCHAPTER 2© 2020 Ce.docx
Financial Options and Applications in Corporate FinanceCHAPTER
Financial Options and Applications in Corporate FinanceCHAPTER
Financial Options and Applications in Corporate FinanceCHAPTER.docx
Financial Options and Applications in Corporate FinanceCHAPTER.docx
Financial Options and Applications in Corporate FinanceCHAPTER.docx
Financial Options and Applications in Corporate FinanceCHAPTER.docx
Financial options and applications in corporate finance chapter
Financial options and applications in corporate finance chapter
© 2010 Cengage Learning. All Rights Reserved. May not be cop.docx
© 2010 Cengage Learning. All Rights Reserved. May not be cop.docx
Chapter 1 An Investment Perspective of Human Resource Managemen.docx
Chapter 1 An Investment Perspective of Human Resource Managemen.docx
PowerPoint Slides prepared by Andreea CHIRITESCUEastern.docx
PowerPoint Slides prepared by Andreea CHIRITESCUEastern.docx
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The document discusses multicultural interactions and the extinction of mammoths. It mentions multiculturalism and the location where mammoths lived and eventually died out while interacting with other groups.
ESL 0845L-OL Week 3 a consumption
The document discusses various crises and disasters including running out of resources, assembling in response to environmental issues, and providing affordable alternatives to pollution, natural disasters like tornadoes, volcanoes, earthquakes, and floods.
ESL 0845L-OL Week 2 b generally speaking
The document presents several common stereotypes or generalizations about different groups of people. It suggests that stereotypes are often not accurate reflections of reality and questions whether others perceive us in the same way we see ourselves. Some of the stereotypes mentioned include assumptions about gender differences in style, the relationship between social media use and social skills, the healthiness of vegetarian versus meat-eating diets, how easy younger generations have it compared to their parents, the endurance of school friendships, how siblings get along, and the relationship between taste and healthiness in food.
ESL 0845L-OL Week 2 a money
The document asks a variety of questions about personal finances, relationships, opinions on controversial issues, and appropriate responses to greetings and farewells in different social situations. It inquires about saving habits, purchasing used goods, tipping servers, donating to those in need, preferred and least-liked stores, handling finances in marriage, how money impacts happiness, if money is more important than love, appropriate pay for different jobs, food in schools, television content, amusement parks, the death penalty, discipline in schools, dependency on technology, and balancing family and career. It also provides greeting and farewell scenarios to determine appropriate responses.
ESL 0845L-OL Week 1 b success
Success is defined as something you wanted or planned to do that you have done well, with related terms including the noun success, adjective successful, and verb succeed. In contrast, the opposite of success is failure, with related terms being the noun fail and adjective failed.
ESL 0845L-OL Week 1 a introductions
This document provides conversation starters for properly introducing oneself to someone for the first time by asking them to describe themselves, their family, best friend, job, or neighborhood in just 3 words. It suggests asking open-ended questions as an icebreaker to learn more about the other person in a concise yet insightful way.
ESL 0845L-OL Week 1 a family life
The document provides advice around family relationships, including that families should eat together daily, parents and teen children should spend quality time together, elderly parents should live with their adult children when unable to live alone due to issues like loneliness and health problems, and the most important advice to give children is to cherish time with family. It also asks questions about relationships with parents and advice received from them.
ESL 0823L week 8 general interest in products
This document provides words and phrases to use when generating interest in products and making sales. It discusses 12 important buzz words or phrases to remember: sale, off, now, new, best sellers, be the first, your, thank you, remember, free/at no extra charge, try, and ends. For each word, it gives examples of how to incorporate the word when talking to customers to encourage them to buy a product or take advantage of a promotion. The overall purpose is to provide salespeople with effective language to use in their pitches to customers.
ESL 0823L week 7 a job-interview-oneonone-activities-pronunciation-exercises-...
The document provides a list of potential questions that may be asked during a job interview. Some of the questions include asking about the applicant's personal information, work history, qualifications, strengths and weaknesses, availability, and long term career goals. The questions cover a range of topics to evaluate an applicant's suitability for the position.
ESL 0823L week 6 parts of-the-body-matter-7160
This document lists various body parts and common physical ailments. It includes a list of 20 body parts from head to toe as well as common illnesses and feelings of sadness. It also provides sample sentences to ask someone what body part hurts or what illness they have such as "She has a sore throat" or "He's feeling sad."
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