Macroeconomics And Macroeconomics Individual Assignment

Macroeconomics And Macroeconomics Individual Assignment
Macroeconomics Individual Assignment 1
Wil Creasy
Part A
Since the beginning of the 1990s, Japan has experienced significant declines in household net
savings rates. The 90's was a decade of slow growth, and households devoted a large portion of their
incomes to maintaining consumption levels. "Large amounts of liquid savings in postal savings
accounts and in banks meant the majority of the population did not feel they had to increase saving
in order to rebuild assets." (Feldstein, 2010)
A number of factors contributed to this decline in the savings rate. One such factor is that
demographic structure is changing rapidly. There is an increasing number of retirees relative to the
people within the labour force. The people in the labour ... Show more content on Helpwriting.net ...
Japan's public pension system can be divided into the Employees Pension System, the Mutual Aid
Association Pension System and the National Pension System. Pensions can alliveate many
financial worries that people in the workforce may experience into the future and problems a retiree
is experiencing currently. This creates a situation where there is less of a reason to save and hence
declines in savings rates occur.
Real incomes for workers experienced slow growth from the beginning of the 1990's to the present
day in Japan. This has impacted savings rate as a large portion of the population do not have the
finances to save effectively. This would account for low consumer spending regardless of the low
saving rates. Reductions in labour productivity and issues with corporate competitiveness are two
main factors behind this reduction in real incomes.
Part B
a)
Real GDP Equation:
Y=C+I+G+X–M
Y=C+I+G+NX
Household Consumption:
June 2013: $205,559,000,000
September 2013: $207,078,000,000
December 2013: $208,158,000,000

March 2014: $209,729,000,000
Total: $830,524,000,000
Investment:
Dwelling
June 2013: $18,122,000,000
September 2013: $17,979,000,000
December 2013: $18,284,000,000
March 2014: $19,144,000,000
Total Dwelling: $73,529,000,000
Business:
June 2013: $67,126,000,000
September 2013: $67,533,000,000
December 2013: $65,440,000,000
March 2014: $64,720,000,000
Total Business: $264,819,000,000
Changes in Inventories
June 2013: $177,000,000
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Essay on Analysing the Cash Flow that a Business Might...
Analysing the cash flow problems that a business might experience
Cash flow problems can be caused by a variety of factors these problems can destabilize the amount
of income which will prevent the payment of liabilities that make a business function.
The main causes of cash flow problems are:
Low profits or (worse) losses
Over–investment in capacity
Too much stock
Allowing customers too much credit
Overtrading
Unexpected changes
Seasonal demand
Each point will be assessed in this document.
Low profits or (worse) losses
Profit and losses are the main points to be considered in a business because a business is run by the
amount of profits they receive. If there is a dent in profit then the business is not functioning ...
Show more content on Helpwriting.net ...
The business will have to choose other means to pay off their stock providers which will put the
business in debt. Having stocks that can't be liquidity will be problematic because the demand is not
of that nature. This will show a negative on the cash forecast as they will not be making profits.
Everything must be accounted to their demands to make sure their stocks will sell which will overall
be a disadvantage. Having stocks that are on your hands for a long period of time can make the
products obsolete and out of range which will then have to sell cheaper to other business. Having
too many stocks can be caused by buying in bulks because it makes the products cheaper but
escalates the risk of not selling the products.
Allowing customers too much credit
Allowing your customers to have too much credit can be an issue but also can be good. It can be an
issue to allow your customers to have over exaggerated credit because this allows customers to buy
products without paying for it on the date of purchase but to leave it for a future specified date. This
can be problematic because these can be calculated in the cash flow forecast without having the cash
at hand but only predicting on the date that has been set for payment. Some trade debtors may not
choose to pay for their purchase at all. This will be problematic as you are

Persuasive Essay On Spending Money
According to GoBankingRates.com, almost 57% of Americans say they have less than $1,000 in
their savings account, while 39% say they have no money into a savings account. Also, a survey by
BankRate relieved that almost 60% of Americans wouldn't be able to pay for a $500 expense
because they don't have enough saves. I will ensure that I will have more than $1,000 in my savings
account when I get older by understanding that decisions I make now will impact my lifestyle
drastically and that it is smarter to save and then spend when needed instead of being in growing
debt. When I'm older I will have a structured savings plan, so I can ensure that I will have enough
wealth to live off of and enough money to cover any unexpected expenses or debts that I may have.
As a teenager, I can invest my money, and save as much money as I can before I'm older. I can do
this by not spending money on things that I know will not benefit me long–term, and by trying to
earn money from various sources such as my parent or family and different jobs.
A study by COUNTRY Financial shows that 36% of Americans would rather be concerned with
paying for their next vacation then have good retirement savings. Americans are more concerned
with paying for their vacations than saving enough for retirement because we would rather spend
and live a lavish life now than being smart with our money and saving it for retirement or when we
might need it. When I retire I want to have enough money to be able to travel

Evaluating The Performance Of Domestic Savings During The...
The prior–saving approach to finance development states that saving is a prerequisite of investment,
so the first task is to increase the level of savings to finance investment as this approach believes
that savings will readily find investment outlets (Thirlwall, 2003).
Accordingly, the ability of carrying–out investments, as a cornerstone of any economic development
process, is based primarily on the ability of attracting and mobilizing domestic and foreign savings,
where savings are necessary to fund the required investments.
3.1 Mobilizing Domestic Savings
Examining the performance of domestic savings in Egypt, through the first decade of 21st century
and the first three years of the second decade, illustrates not just the weak performance of domestic
saving, but also its tendency to deteriorate over the considered time period.
The Hodrick–Prescott Filter (HP) is used to generate a trend component from a time series regarding
the level of gross domestic savings in Egypt as a percentage of GDP.
Figure 1 illustrates that gross domestic savings as a percentage of GDP starts at 12.9% in 2000 and it
ends at 7.2% in 2013; and its average was 13.6% (standard deviation 2.9%) during the considered
time period, see Table 1.
Table 1.Gross Domestic Savings (GDS) as a percent of GDP and their trend
Year GDS as a % of GDP (%) Trend (%) Gap (%)
2000 12.9 14.2 –1.3
2001 13.4 14.5 –1.1
2002 13.6 14.7 –1.1
2003 14.3 14.9 –0.6
2004 15.6 15.1 0.5
2005 15.7 15.1 0.6
2006 17.1 15 2.1

Descriptive Essay About Resort Management
For my first job out of college I am going to be a concierge for a resort in Miami. I feel like this job
would be extremely good for my first job in hospitality. It will help me know what people are
likening. People change their mind everyday on what they want. Tourists want the new and fun
event or restaurants or club. That could be for a year, month, week, or even one day. It will also let
me see all the different types of hospitality industry I could later decided to go into as I progress in
my job as a concierge. For this job I will be helping guests with making meal reservations, tourist
attractions, nightlife, and anything the guests need help with to get to know the area of Miami. I will
also be learning about the top and hot new restaurants, nightlife, and tourist attractions daily. I will
also be making sure I can do everything in my power to make sure the quest at the resort I'm
working at have a great experience in Miami.
After 5 years of progressing in the hospitality business, I would like to be a general resort manager
in Miami. My annual salary for a year working as a general resort manger is 54,000 dollars. The
54,000 dollars a year that I get from working as a general resort manager is not including income
task. My income task is 20 percent. For this position I will be looking down on lower positions and
making sure things are running smoothly off all areas of the resort. But over all I will be serving the
guests with whatever they may need in order for

The Best Out Of His Life
My entrepreneur..Mike See For 40 some years, Mike See has made sure to make the best out of his
life. He 's taught many people the way of being an entrepreneur and what it means to be one in
western Kansas. Through his life he 's overcome obstacles, showed hard work, and pursued his
passion of inventing new things. Mike See has made a huge impact on his family and especially his
niece or in other words, me. Uncle Mike wasn 't the first person in our family to go to college or do
anything academic like that because as he likes to state it "a little scholarly challenged." In fact, he
didn 't attend college at all. He went to be a guide in Idaho, worked in a salvage yard in Colorado,
and then came back home to help my grandpa, Bill See, ... Show more content on Helpwriting.net ...
In early, 2014 Uncle Mike ended up selling his share of the company to his partners. He has since
then ran a restaurant both in Cuchara, New Mexico and Scott City, created a duck ranch for hunters,
owned a engraving/lasering company and has contributed to kids days at the state park for those
who want to be outdoors. Currently, he is working on running his Etsy store for the past two years.
In his store, he makes wooden signs that have sold all over the U.S.. Also he 's currently working to
turn his storefront uptown into a bait and tackle shop because of the limited supply we have here in
Scott, again, showing he wants to make people experience the great outdoors. Uncle Mike is always
on the go no matter what. He has recently had two wrist surgeries that has slowed his inventions but
it doesn 't stop him. Mike See has taught me... Mike See's story has taught me that the ideas of one
person can make a big difference for families or people for a long time. Yet the question constantly
from him is what will I do to take the that will make my life steady and will make my future
brighter. The combination of the talks from Uncle Mike and the lessons I've learned through the
EverFi programs will help me plan a better future for myself and others. I know I will need to be
able to have a constant income and that I will need to save and invest the money I made wisely, so
that I will have enough to support

`` No One Can Serve Two Masters ``
We live in a world where a person's success is measured by how much money they have or by the
amount of possessions they own. God, however, calls us to live a different lifestyle. Matthew 6:24
says "No one can serve two masters. Either you will hate the one and love the other, or you will be
devoted to the one and despise the other. You cannot serve both God and money." Nevertheless, God
also wants us to be frugal with our money so that we can bless others with our excess. On My Own
Two Feet gives some practical advice on how to get out of debt. The goal of this book is to help
people understand how they can live well today and also being able to save for future needs. Some
of the main idea of the book is to start saving now to have an emergency fund, to be able to pay for
high–priced items and to ensure a stable retirement. It is not until after the personal finances are
controlled can people really give generously and serve God with their money. Deciding how much
to spend and how much to save can be difficult. On My Own Two Feet breaks down a gross income
and shows what percentage of the income should be spent in several different categories. The first,
and the biggest, category is what they call the "foundation expenses" (pg. 68). This includes all the
stuff that is a basic need, such as food, shelter and transportation. Because these are all necessitates
in life, 45 percent of an income is devoted to paying for them. The next biggest category is income
taxes. According

Owners' Equity Paper
ACC 423
September 5, 2011
University of Phoenix
The investments of stockholders, corporations depend a lot on to fund their business operations. The
company stands to gain and grow from selling their stock, when viewing each entity separately. The
investor hopes to gain and earn a profit by investing in a company in hopes that their stock prices
will go up. The company and the investor depend on each other. The more opportunity the company
has to grow with the more people invests. Also the more opportunities for the company to grow, the
happier they are able to make their investors, who in turn spend more money.
The owners' equity discusses the importance that common stockholders and ... Show more content
on Helpwriting.net ...
Earned capital tells an investor more about the condition of the company. Earned capital is the
money that an organization has generated as a result of operations. New companies will usually hold
onto this money as retained earnings to use for future growth.
From the investor's point of view, it is important that a company earns income from operations
better than the sale of stock. The quantity of received capital of a company report in their financial
statements demonstrates to the stockholders the real cost of their assets. Although a company that
constantly report paid–in capital in additional of earned capital, would not be seen as a good
investment opportunity.
The diluted earnings per share demonstrate to the investor possible dilutive common shares that
were unpaid during the certain period. The investor review the importance of diluted earnings per
share by a calculation: the basic earnings per share – net income divided by the weighted–average
shares unpaid, plus the earnings per share less any convertibles and impact of options, warrants, and
other dilutive securities (Intermediate Accounting, 2007).
Conclusion
Paid–in capital is retained separate from earned capital to avoid misreading information where
operational subsidies are created. Investors are most likely to be more concerned with a company
earned capital in comparison to its paid–in capital. This is because the earned capital represents the
earning abilities of

Cost Savings Of A Company
Cost Savings of a company
PROJECT REPORT
Masters of Business Administration
Stevens henager
Professor– Dr. Hobbs
Student Name – Divya.Nunna Student ID –1408125257
ABSTRACT
This is the project which mainly helps us to know how important the concept of Cost savings is
important for each and every department of the company. The steps to be followed in order to make
aware of cost savings how it helps both the company and an individual employee. The effects of it in
a worthy way depraved way in the view of employee. In depth subject of cost saving with example
on ground data and its analysis with explanation through graphs. Advantages and Disadvantage of
the cost savings through all the aspects which involves in the process of that particular department
with suggested conclusion by explaining the on ground project of a company Sachs&Co.
TABLE OF CONTENTS
Acknowledgments....................................... 1
Abstract.................................................... 2
Introduction................................................3
Objectives...................................................4
Procedure................................................... 5
Results...................................................... 6
Conclusions................................................ 7

Financial Management Essay
MBA 579 Homework Assignment 4–2 True/False Indicate whether the statement is true or false.
____ 1. The tighter the probability distribution of its expected future returns, the greater the risk of a
given investment as measured by its standard deviation. ____ 2. The standard deviation is a better
measure of risk than the coefficient of variation if the expected returns of the securities being
compared differ significantly. ____ 3. An individual stock's diversifiable risk, which is measured by
the stock's beta, can be lowered by adding more stocks to the portfolio in which the stock is held.
____ 4. A firm can change its beta through managerial decisions, including capital budgeting and
capital structure decisions. ... Show more content on Helpwriting.net ...
a. | The expected return on the stock is 5% a year. | b. | The stock's dividend yield is 5%. | c. | The
price of the stock is expected to decline in the future. | d. | The stock's required return must be equal
to or less than 5%. | e. | The stock's price one year from now is expected to be 5% above the current
price. | ____ 18. A stock just paid a dividend of D0 = $1.75. The required rate of return is rs =
12.0%, and the constant growth rate is g = 4.0%. What is the current stock price? a. | $20.56 | b. |
$21.09 | c. | $21.63 | d. | $22.18 | e. | $22.75 | ____ 19. If D1 = $1.75, g (which is constant) = 4.5%,
and P0 = $46, what is the stock's expected dividend yield for the coming year? a. | 3.26% | b. |
3.43% | c. | 3.61% | d. | 3.80% | e. | 3.99% | ____ 20. If D1 = $1.50, g (which is constant) = 6.5%,
and P0 = $56, what is the stock's expected capital gains yield for the coming year? a. | 6.50% | b. |
6.83% | c. | 7.17% | d. | 7.52% | e. | 7.90% | ____ 21. The Zumwalt Company is expected to pay a
dividend of $2.25 per share at the end of the year, and that dividend is expected to grow at a
constant rate of 5.00% per year in the future. The company's beta is 1.15, the market risk premium is
5.50%, and the risk–free rate is 4.00%. What is the company's current stock price? a. | $42.25 | b. |
$43.31

The Fedex Stock 's Price
FedEx has produced superior financial returns to its shareholder in last couple of year. It has a
worldwide business with a broad portfolio of transportation, e–commerce and business services. It
consistently ranked among world's most trusted and admired employers. The revenue has been
consistently increasing and expected to reach at 45 billion in next year. EPS is also about 5.5 and the
expected P/E ratio is 14.3 which show its growth potential. With the stock's beta of 1.27 and latest
dividend payout ratio of 9%, it can be expected that it will give a superior result in near future and
thus it is one of the best alternatives for investment.
The FedEx stock's price range in last year was 101.95 – 155.31. Currently its stock's price is
$152.68.
The latest dividend was declared on Jun'17, 2014 and it was $0.20 per share. Its annual dividend
yield is 0.40%. On Jun'9, 2014, The Board of Director of FedEx declared the quarterly cash
dividend of $0.20 per share which was $0.5 higher than the previous quarter's dividend. Dividend
was payable on Jul'13, 2014.
Corporate Governance is a set of rule and processes by which a company is directed and controlled.
FedEx is committed to highest quality of corporate governance. It has independent board of
directors having spirit of corporate governance reform. Compliance standards are met in accordance
of Sarbanes–Oxley Act of 2002 and the New York Stock Exchange's corporate governance listing
standards. Code of Business conduct and

Persuasive Essay On Saving For Retirement
When you are young you always hear people saying it is never too early to start saving for
retirement, but at that age the last thing you want to do is put your money towards ending the career
you are just trying to start. It is hard to imagine a time where you won't have to go to work on a
daily basis, to make a wage, in order to pay your bills, but the ultimate goal is getting to that time in
your life where you don't have to go to work and the bills are already taken care of. The hope for
everyone is that the bills are taken care of and you are able to focus on leisurely things you did not
have an opportunity for while employed. What we fail to realize is that the longer we wait to save
the more we have to be concerned with the pressure of time running out and not enough money
saved. Not to mention the sooner you start saving the more time you give your money to grow.
Let's be honest, we simply can never have enough money, so when you are planning for a time
where you have no income you must prepare accordingly. Many Americans are under the false
impression that when they retire Social Security will cover their living expenses, but the reality is
that the average Social Security benefit is $1180.80 per month. With the federal minimum wage
being $7.25, a Social Security check is nearly equivalent to a minimum wage job, which is hardly a
livable income for most people. The average wage needed for a two–bedroom apartment throughout
our country is $20.30, so that goes to

Main Differences Between The Manufacturing Sector And The...
In the business world, there are two major sectors; the manufacturing sector and the service sector.
While they both deeply affect a society's standard of living, there are five main differences between
the two. According to The Business Dictionary,
(http://www.businessdictionary.com/definition/manufacturing–sector.html), the definition of
manufacturing sector are industries that are involved in chemical, mechanical or physical conversion
of substances, ingredients, or components into consumer or industrial goods. The service sector any
job or industry that produces intangible value or goods. The five main differences between service
and manufacturing organizations according to an article posted by (Linton, The Five Differences
between Service and ... Show more content on Helpwriting.net ...
However, a manufacturing firm does not need to employ many people because most manufacturing
organizations can automate their production processes to reduce their labor requirements. The fifth
mentioned difference is location, service firms do not require a physical production site allowing
them to be located anywhere, an example would be Amazon, which spent most of it's forming years
without a standing office due to their ability to operate solely through the internet. Manufacturers on
the other hand must have a physical location for the production and stock holding operations. These
differences create a difference in their respective accounting books as based on reviewing different
companies in both sectors, companies in the manufacturing sector usually had much larger assets
and overall higher numbers in the four major financial statements. Reviewing specifically the cases
of Wal–Mart and Marriott International, the international hotel chain, the tables below provide the
differences between the accounting practices and trends of the two sectors. Values in

Isp Meeting Reflection
On 7/28/17 an ISP meeting completed with Mr. Miller and Lena Miller (wife). The worker went
over the closing ISP with Mr. Miller and updated his services completed. Mr. Miller provided the
worker copy of his certificates from Family Services and Bradford Health services. The worker
asked Mr. Miller how he benefited from the services. According to Mr. Miller, he learned different
ways to communication with different people and with family member. Mr. Miller told the worker
that he was excited when his children came and visit for the weekend. Mr. also said that he has joint
custody with his wife Mellissa every other weekend. Mr. Miller said the told the children) Penelope,
Judah and Lily) to the document because allergy and constipation. The ... Show more content on
Helpwriting.net ...
Carson, Penelope, Judah and Lily. Upon entering the home, the children greeted the worker with
hugs. Mrs. Carson recently gave birth to a little baby boy name Theodore. Mrs. Carson introduces
the worker to her mother, who was visiting from out of town. The worker notices the children were
happy and excited to have a baby brother. Judah was busy playing on the floor with his toys. All the
children were appropriately dressed, happy and smiling. The worker sat down and developed a
rapport with the family to investigate how the children returned visit when with their father.
According to the children the visit went well with their father apart from him taking them to the
doctor and also interrogating them. The worker noticed Mrs. Carson that she will end the safety plan
that this was the final ISP meeting. The worker also told Mrs. Carson that Mr. Miller completed his
required services. According to Mrs. Carson, her ex–husband will not change and in 30 days he goes
back being violent to his wife. Mrs. Miller said when she was married to Mr. Miller; she went
through the same episodes of violence with him. Mrs. Carson mention the children are doing well
and very excited about returning to school. Mrs. Carson mentions that the children are attending
their counseling appointments and all is going well. The visit

The Best Out Of His Life
For 40 some years, Mike See has made sure to make the best out of his life. He 's taught many
people the way of being an entrepreneur and what it means to be one in western Kansas. Through
his life he 's overcome obstacles, showed hard work, and pursued his passion of inventing new
things. Mike See has made a huge impact on his family and especially his niece or in other words,
me. Uncle Mike wasn 't the first person in our family to go to college or do anything academic like
that because as he likes to state it "a little scholarly challenged." In fact, he didn 't attend college at
all. He went to be a guide in Idaho, worked in a salvage yard in Colorado, and then came back home
to help my grandpa, Bill See, with farming. After his ... Show more content on Helpwriting.net ...
In early, 2014 Uncle Mike ended up selling his share of the company to his partners. He has since
then ran a restaurant both in Cuchara, New Mexico and Scott City, created a duck ranch for hunters,
owned a engraving/lazering company and has contributed to kids days at the state park for those
who want to be outdoors. Currently, he is working on running his Etsy store for the past two years.
In his store, he makes wooden signs that have sold all over the U.S.. Also he 's currently working to
turn his storefront uptown into a bait and tackle shop because of the limited supply we have here in
Scott, again, showing he wants to make people experience the great outdoors. Uncle Mike is always
on the go no matter what. He has recently had two wrist surgeries that has slowed his inventions but
it doesn 't stop him. Mike See's story has taught me that the ideas of one person can make a big
difference for families or people for a long time. Yet the question constantly from him is what will I
do to take the that will make my life steady and will make my future brighter. The combination of
the talks from Uncle Mike and the lessons I've learned through the EverFi programs will help me
plan a better future for myself and others. I know I will need to be able to have a constant income
and that I will need to save and invest the money I made wisely, so that I will have enough to
support my dreams and educational goals. The skills I will learn or

Persuasive Essay On Saving Money
Saving money is an important part of your financial health. The more you save, the more you can
feel at ease whenever a rainy day might hit. You cannot predict the future but you can prepare for it.
If you prepare now, your future self will thank you. But how can you save if you have so many bills
and only one stream of income? Here are some tips you can use to rack up that account with a single
income.
Try to make a budget, it will be your blueprint for your finances. The first step for anyone wanting
to take control of their finances is to make a budget. A budget will allow you to understand where
your money is going and enable you to adjust your spending by designating how much you can
afford. Creating a budget is a good idea for everyone, but especially for individuals with limited
income. Write down your budget, with specific categories of spending, and stick to it. Start slowly
by using a percentage on how much you will save versus spend. A plan doesn't work unless you
work the plan.
Do not live a life that you cannot handle, spend within your means. Be honest with yourself, if you
can't afford something, don't buy it! Affordability is much more than the amount of money in your
bank account, it also is how long it will take for the money you spent to be back in your account.
Think of your finances as a long term process, not a short term fix. This is also why you should limit
your credit card usage. If you rack up your credit card and lose your sole source of income,

Case Study Of Copthorne Holdings Ltd. V. Canada
This case (Copthorne Holdings Ltd. v. Canada) is similar to the case being analyzed (Groupe Honco
Inc. v. Her Majesty The Queen) in the fact that they both seem to be entering amalgamations in
order to receive a tax free benefit. In Copthorne Holdings Ltd. v. Canada, the PUC of the previously
known subsidiary became included in the PUC of the amalgamated corporation. In Groupe Honco
Inc. v. Her Majesty The Queen, the capital dividend account of Old Supervac transferred to the
amalgamated corporation New Supervac. In order to receive tax free benefits, the parent and
subsidiary corporations in Copthorne Holdings became sister corporations prior to amalgamation in
order to have a larger PUC. When shares were redeemed and a payout occurred to the non–resident
shareholder, it was much larger than it would have been had the subsidiary PUC been cancelled
upon amalgamation. In the Groupe Honco case, the acquirers of the Old Supervac claimed to have
no knowledge of the capital dividend account. When the CDA came to light, they then tried to pay
out a capital dividend from New Supervac to Groupe Honco who then paid a capital dividend to
Gestion Paul Lacasse. In both situations the parties are disobeying the anti–avoidance rule.
We can use the conclusion from this case to state that the acquisition of Old Supervac's shares and
declaration of a capital dividend form a part of the same series of transactions. When deciding to
elect the dividend being declared as a capital dividend,

Finc 650: Questions On Corporate Finance
Final Exam Corporate Finance FINC 650 1. Which of the following is not considered a capital
component for the purpose of calculating the weighted average cost of capital as it applies to capital
budgeting? a. b. c. d. e. Long–term debt. Common stock. Short–term debt used to finance seasonal
current assets. Preferred stock. All of the above are considered capital components for WACC and
capital budgeting purposes. 2. A company has a capital structure which consists of 50 percent debt
and 50 percent equity. Which of the following statements is most correct? a. b. c. d. The cost of
equity financing is greater than the cost of debt financing. The WACC exceeds the cost of equity
financing. The WACC is calculated on a before–tax basis. The ... Show more content on
Helpwriting.net ...
Picking a risk factor equal to the average discount rate. Reducing the NPV by 10 percent for risky
projects. 10. Suppose the firm 's WACC is stated in nominal terms, but the project 's expected cash
flows are expressed in real dollars. In this situation, if prices are expected to increase, the calculated
NPV would a. b. c. d. e. Be correct. Be biased downward. Be biased upward. Possibly have a bias,
but it could be upward or downward. More information is needed; otherwise, we can make no
reasonable statement. 1. Heino Inc. hired you as a consultant to help them estimate their cost of
capital. You have been provided with the following data: rRF = 5.0%; RPM = 5.0%; and b = 1.1.
Based on the CAPM approach, what is the cost of equity from retained earnings? A. 10.50% b.
10.71% c. 10.88% d. 11.03% e. 11.14% rs = 5% + (5%)*1.1 = 10.50% 2. P. Daves Inc. hired you as
a consultant to help them estimate their cost of equity. The yield on the firm's bonds is 6.5%, and
Daves ' investment bankers believe that the cost of equity can be estimated using a risk premium of
4.0%. What is an estimate of Daves ' cost of equity from retained earnings? a. 9.77% b. 10.02% c.
10.19% d. 10.33% E. 10.50% 6.5% + 4% = 10.5% 3. You were recently hired by Hemmings Media,
Inc., to estimate their cost of capital. You were provided with the following data: D1 = $2.50; P0 =
$60; g = 7% (constant); and F = 5%. What is the cost of equity

Wenyu Li MINI CASE Essay
Wenyu Li
BUS 581
03/01/2015
Chapter 7 MINI CASE
Your employer, a mid–sized human resources management company, is considering expansion into
related fields, including the acquisition of Temp Force Company, an employment agency that
supplies word processor operators and computer programmers to businesses with temporary heavy
workloads. Your employer is also considering the purchase of a Biggerstaff & Biggerstaff (B&B), a
privately held company owned by two brothers, each with 5 million shares of stock. B&B currently
has free cash flow of $24 million, which is expected to grow at a constant rate of 5%. B&B's
financial statements report marketable securities of $100 million, debt of $200 million, and
preferred stock of $50 million. ... Show more content on Helpwriting.net ...
The valuation process, in this case, requires us to estimate the short–run non–constant growth rate
and predict future dividends. Then, we must estimate a constant long–term growth rate at which the
firm is expected to grow. Generally, we assume that after a certain point of time, all firms begin to
grow at a rather constant rate. Of course, the difficulty in this framework is estimating the short–
term growth rate, how long the short–term growth will hold, and the long–term growth rate.
What are the expected dividend yield and capital gains yield during the first year?
P0=46.66 Expected dividend yield= 2.6/46.66 = 5.6%
Capital gains yield= 7.4%
What are the expected dividend yield and capital gains yield during the fourth year (from Year 3 to
Year 4)?
P3= 56.5964
Expected dividend yield = 7.0%
Capital gains yield= 6.0%
i. What is free cash flow (FCF)?
A measure of financial performance calculated as operating cash flow minus capital expenditures.
Free cash flow (FCF) represents the cash that a company is able to generate after laying out the
money required to maintain or expand its asset base. Free cash flow is important because it allows a
company to pursue opportunities that enhance shareholder value. Without cash, it's tough to develop
new products, make acquisitions, pay dividends and reduce debt.
FCF is calculated as:EBIT(1–Tax Rate) + Depreciation & Amortization – Change in Net Working
Capital – Capital ExpenditureIt can also be

Stock Market Simulation
Software Requirements Specification
for
Stock Market Simulator
Version 1.0 approved
Prepared by Divesh Mirchandani, Abhishek Oturkar, Sumit Kriplani, Kedar Nadkarni
30–01–2015
Table of Contents
Table of Contents ii
Revision History ii
1. Introduction 1 1.1 Purpose 1 1.2 Document Conventions 1 1.3 Intended Audience and Reading
Suggestions 1 1.4 Product Scope 1 1.5 References 2
2. Overall Description 2 2.1 Background 2 2.2 System Context 2 2.3 System Capabilities 3
3. Behavioural Requirements 4 3.1 System Inputs & Outputs 4 3.2 Detailed Output Behaviour 4 3.3
Software Interfaces 4 3.4 Communications Interfaces 4
4. Quality Requirements 12
5. Fundamental ... Show more content on Helpwriting.net ...
8. Google Finance. Google Finance. Google. [Online] 2010 February.
http://www.google.com/finance.
9. Investopedia. Game: Investopedia Stock Only Game 2009 – No End. Investopedia. [Online] 2010
February – April. http://simulator.investopedia.com/Portfolio/.
Overall Description
1 Background
This intention of this project is to simulate a stock exchange environment for users to learn the
basics of stock exchange. This learning process can be simple, stress free, and enjoyable in a gaming

environment. This environment allows players to hone their skills through competition with other
players using virtual money to buy and sell stocks based on a real stock market. Each player can to
formulate their own strategy and assess their performance through our user–friendly, web based
stock exchange simulator. Through experience, players will gain confidence in their investing
abilities using a variety of stock exchange techniques, which have been implemented in our
software. We hope to make the difficult task of learning to invest in a high risk, stock exchange
market an enjoyable experience.
2 System Context
Web based application – HTML based application written using the Django web framework.
Includes: o Registration/ Login system o Game cycles o User history – all data saved for user
portfolio available for reference during a login

A Study Of Trends On Saving And Consumption By Middle And...
A study of trends in saving and consumption by middle and lower middle class at national level
INTRODUCTION
Right from our childhood days, our parents teach us that save penny and earned penny. The phrase
highlights the significance of individual and household savings. With the passage of time, our elders
constantly tell us that we should spend less than we earn and save some part for uncertain and better
future use. Our elders also educate us to use resources and money according to our income, and our
expenses should be less than our income. From the classical days, saving has been considered as one
of the element of expansion and growth. In Indian economy, the household sector contributes the
lion's share of the total savings. As far as the household and rural household sector is concerned they
have remarkable saving potential which has not been considered seriously by the policy makers and
hence, measures have not been chartered to organize these enormous savings.
In this theory Keynes examined the tender of value function of money along with transaction
function. According to Keynes in general there are tree motives that create the demand for money.
They are transaction motive, precautionary motive and speculative motive.
1. Transaction motive
It refers to the demand for money for the present transaction of the people. Individuals and
household keep cash in order to bridge the gap between receipt of income and the expenditure. This
amount will depend upon the time

The On The Marginal Productivity Theory
Stiglitz paints a very dark and hated picture of the top 1 percent or wealthy elite right off the bat.
Stiglitz is clearly against the 1 percent in almost every way. The 1 percent is stingy, useless, and
does nothing to provide benefits for the middle class or any body outside of the 1 percent. The
deeper into the article I found myself, the more questions came to mind. Are these facts or opinions?
Does the authors argument hold any statistical value? The more I questioned the more specific my
research became. The research developed into reasons how the marginal–productivity theory is in
fact a vital part in the 1 percents role in the economy. That piece of information led to two other
important pieces of evidence. How much did the 1 percent actually contribute to society? How many
job and educational opportunities came from the wealthy elite? The research and statistics go on to
speak for themselves by stating how exactly the top 1 percent contribute to society specifically
outside of their income class and how many economic opportunities are provided from just the 1
percent alone. Of the 1%, By the 1%, For the 1% suggests that a large portion of the total income is
being overrun by the 1 percent or the extremely wealthy. It states that the top 1 percent control over
40 percent of the nations income. The author even brings on this shocking statistic "Twenty–five
years ago, the corresponding figures were 12 percent and 33 percent." (Stiglitz 79). This all sounds
very nice

Acc 291 Week 4
Team C Week 4 Summary
David Ramirez, Kelvin Hemmingway, Chad Etzler
ACC/291
August 26, 2013
Ins: James Covert
Introduction As we advanced through week 4 of Principles of Accounting II, so far, we have
absorbed ourselves with a litany of accountancy material. Week 4 continued with variety of content
that contained: identifying kinds of shares issued by companies, computing shares, dividends, and
stock splits, and documenting treasury stock deals. Also discussed in text and throughout discussion
questions was the use of cash flows and types. We also covered both vertical and horizontal
analysis.
Cash Flow and Shares In any industry, have a clear picture of an organizations cash, and the flow of
where it goes is an important part ... Show more content on Helpwriting.net ...
The majority of share divisions are mostly two for one split. This implies the stockholders get two
stocks and shares for the price of one share. In case the share cost $10, the stockholder will get 2 $5
shares instead.
Analysis and Investors The money statements is used by both external and internal users including
investors, creditors, managers, and executives staff. There are several analysis that are used in many
ways of Horizontal Analysis and Vertical Analysis. Horizontal Vertical compares in specific items
over number of accounting period that many people uses to balance their information. There are
compared in different ways of in Absolute Dollars and by percentage ratios that helps with
calculations. Then the Vertical Analysis which compares each separate figure that shows in
Financial statements. The explanation of the analysis through income statements and using the
balance sheet The analyze information helps many businesses and owners to make good business
decisions so understanding the analysis will be great importance to how people compares the
analysis. If a firm issues and reacquires its own share from investors it is known as treasury stock.
To document the buying of treasury stock the organization uses the cost technique. The debit would
be documented in the treasury stock account for the price paid for the reacquisition. Having said
that, if a firm disposes of treasury stock, they credit the treasury stock account for the

Cash Flow Model And The Dividend Discount Model Essay
An equity investment is a number of shares owned by a corporation that are purchased by investors
who are then entitled to shares of the firm's assets in the case of liquidation. These shares are then
bought and sold among stockholders. Before buying any shares, the stockholders and investors
value the stock to determine if it is worth buying. There are different methods stockholders and
investors use to value a stock price. The common ones are the discounted cash flow model and the
dividend discount model. The purpose of the discounted model is to determine the value of the firm
and its stock. It uses future cash flow projections discounted back to the present values to estimate
the potential for the investment. (Discounted Cash Flow (DCF), n.d.) Another valuation method is
the dividend discount model. This method uses predicted dividends and discounting them back to
the present value to obtain a value price. Both models were used to evaluate each company's stock
price to help us determine which one is the best option to purchase.
The different inputs of the discounted cash flow model include the risk free rate, market risk
premium, beta, market value of equity (in millions), pre–tax cost of debt, effective tax rate, market
value of debt (in millions), initial cash flow, and long term growth rate. The risk free rate is the rate
of return of an investment with zero risk of financial loss. The market risk premium is the difference
between the expected return on a market and

Autozone Inc.
Baker Adhesives
Jacqueline Lau
Stetson Strifler
Tarleton State University
FIN–403/505, Spring Semester, Sect. 010
Dr. Omar A. Esqueda
April 8, 2013
Table of Contents
Executive Summary.........................................................................................................................3
General Background of Organization..............................................................................................3
Overview of Financial Analysis Tools............................................................................................4
Stock Repurchases and the Benefits They Offer.............................................................................5
Alternative Operating Cash Flow ... Show more content on Helpwriting.net ...
Within this case analysis, we will examine Autozone's stock repurchasing program, as well as the
mechanics behind it and the benefits it provides to the firm. Additionally, this report will analyze the
alternative operating cash flow options Autozone should consider, detailing the benefits and costs of
each option. A comprehensive examination of these operating cash flow alternatives will be
presented, allowing for the determination of the most viable alternative for the use of Autozone's
operating cash flows.
General Background of Organization Founded in 1979 under the name AutoShack, Autozone has
grown to become the leading retailer of automotive replacement parts and accessories in the United
States, employing nearly 65,000 employees with over 4,800 locations in North America. After
changing their name to Autozone in 1987, the company was able to implement the first electronic
auto–parts catalogue in the retail industry, helping to establish their dominant position in the market.
Because the firm was able to record steady growth for years, it was taken public in 1991, allowing it
to be listed on the New York Stock Exchange (NYSE) under the ticker symbol AZO. Along with
heavy investments in their retail footprint, Autozone had also developed a refined hub–and–feeder
inventory system, keeping in–store inventory levels low while reducing the chance of stock outages.
Because of their revolutionary electronic

Elizabeth Warren The Vanishing Middle Class Analysis
Debt in America now has grown to be at the highest it has been compared to the decades before.
People now spend tremendous about of money now then they have many years prior. Many people
today have borrowed money that they can not seem to pay back, which debt begins to accumulate
and may cause distress in many lives. Basically now there is no one preserving their own money,
they're are just spending their hard earned money. Elizabeth Warren, formerly a U.S. senator and
also a teacher, addresses the middle class in her essay called "the vanishing middle class". There are
abundant of good ideas that she states in her essay. Elizabeth Warren is very effective in her
argument because of three concepts that stand out the most were having high incomes but at a price,
savings and debt, how different we use our money now compared with how we have in the past.
Incomes now and back then have changed tremendously. In her essay " the vanishing middle class"
Elizabeth Warren states " The answer is that the typical man working full–time, after adjusting for
inflation, earns about $800 less than his father earned in the early 1970s. After decades of rising
incomes earlier in the twentieth century, about thirty years ago wages for men have flatlined". This
shows that even though incomes have increased and changed over time people are still making less
money than their parents have done due to wages not being increased for 30 years and due to the
facts the people spend more on things

review exam
Fin 3010 Dr. Michello Summer 2007 Practice Problems Expected dividend yield Answer: a EASY i.
If D1 = $2.00, g (which is constant) = 6%, and P0 = $40, what is the stock's expected dividend yield
for the coming year? a. 5.0% b. 6.0% c. 7.0% d. 8.0% e. 9.0% Expected return, dividend yield, and
capital gains yield Answer: e EASY ii. If D1 = $2.00, g (which is constant) = 6%, and P0 = $40,
what is the stock's expected capital gains yield for the coming year? a. 5.2% b. 5.4% c. 5.6% d.
5.8% e. 6.0% Expected total return Answer: d EASY iii. If D0 = $2.00, g (which is constant) = 6%,
and P0 = $40, what is the stock's expected total return for the coming year? a. 9.8% b. 10.3% c.
10.8% d. 11.3% e. 11.8% ... Show more content on Helpwriting.net ...
An increase in a firm's expected growth rate would normally cause its required rate of return to a.
Increase. b. Decrease. c. Fluctuate. d. Remain constant. e. Possibly increase, decrease, or have no
effect. Required return Answer: d EASY xviii. If a stock's expected return exceeds its required
return, this suggests that a. The stock is experiencing supernormal growth. b. The stock should be
sold. c. The company is probably not trying to maximize price per share. d. The stock is probably a
good buy. e. Dividends are not being declared. Constant growth model Answer: a MEDIUM xix.
Which of the following statements is CORRECT? a. The constant growth model takes into
consideration the capital gains earned on a stock. b. It is appropriate to use the constant growth
model to estimate stock value even if the growth rate is never expected to become constant. c. Two
firms with the same expected dividend and growth rate must also have the same stock price. d. If a
stock has a required rate of return rs = 12%, and if its dividend is expected to grow at a constant rate
of 5%, this implies that the stock's dividend yield is also 5%. e. The price of a stock is the present
value of all expected future dividends, discounted at the dividend growth rate. Constant growth
model Answer: c MEDIUM xx. If a stock's dividend is expected to grow at a constant rate of 5% a
year, which of the following

The Fedex Stock 's Price
FedEx has produced superior financial returns to its shareholder in last couple of year. It has a
worldwide business with a broad portfolio of transportation, e–commerce and business services. It
consistently ranked among world's most trusted and admired employers. The revenue has been
consistently increasing and expected to reach at 45 billion in next year. EPS is also about 5.5 and the
expected P/E ratio is 14.3 which show its growth potential. With the stock's beta of 1.27 and latest
dividend payout ratio of 9%, it can be expected that it will give a superior result in near future and
thus it is one of the best alternatives for investment.
The FedEx stock's price range in last year was 101.95 – 155.31. Currently its stock's price is ...
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From 2005, FedEx has decided to eliminate the classified structure of Board and allowed for the
annual election of all directors. Investors' interest has been protected and tried to maintain the full
integrity in business operation. It is tried to ensure the disclosure of all the material information and
a complete transparency so all investors have access of clear factual information.
The next year's growth rate is expected to be 21.10% which is higher than the Industry and market
growth. This higher growth rate is based on it's a strong financial base, huge market capitalization,
higher growth potential, consistent earnings record, diversified portfolio and a reputation it earned in
past several years.
The estimated beta of firm is about 1.27. This figure is retrieved from a reliable website–
www.finance.yahoo.com.
To calculate the firm's required rate of return, CAPM model is applied as follows:
One year US Treasury rate of return = 0.10%
One year Market return on S&P 500 = 24.40%
The beta of FedEx stock = 1.27
Hence, the firm's required rate of return = 0.10 + 1.27*(24.40 – 0.10) = 30.96%
For year ended 31st Mar'14, Cash flow from operating activities is $4,264 million and Cash flow
from investing activities is $3,551 million. Hence, Free cash flow (FCF) to the firm will be Cash
flow from Operating activities less Cash flow from Investing activities, i.e. $4,264 –

Business
1. Discuss the difference between – State also advantages & disadvantages each:
a. The payback period & the discounted payback period criteria of capital budgeting.
The payback period measures the time that it takes to recoup the cost of the investment. If the cash
flows are an annuity, then we can simply divide the cost by the annual cash flow to determine the
payback period Otherwise, as in the example, we subtract the cash flows from the cost until the
remainder is zero The shorter the payback period, the better Generally, firms will have some
maximum allowable payback period against which all investments are compared
Assume that your company is investigating a new labor–saving machine that will ... Show more
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Advantages:
May be useful when investment funds are limited.
Easy to understand and communicate
Correct decision when evaluating independent projects.
c. The IRR & the Modified IRR criteria of capital budgeting.
The internal rate of return (IRR) is the discount rate that equates the present value of the cash flows
and the cost of the investment Usually, we cannot calculate the IRR directly, instead we must use a
trial and error process For our example, the IRR is found by solving the following:
In this case, the solution is 13.45% Problems with IRR: The IRR is a popular technique primarily
because it is a percentage which is easily compared to the WACC However, it suffers from a couple
of flaws: The calculation of the IRR implicitly assumes that the cash flows are reinvested at the IRR.
This may not always be realistic. Percentages can be misleading (would you rather earn 100% on a
$100 investment, or 10% on a $10,000 investment?)
Modified Internal Rate of Interest:
The modified IRR (MIRR) is the average

Johnson Case
Johnson and Johnson price to operating profits is 19.69. This ratio is quite difficult to interpret
because the utilization of net income could be calculated in different way, modifying the final result
of the ratio. In order to calculate the net income, I used the gross income minus operating expenses
minus depreciation and amortization. All this number are quite ease to manipulate in the statements
of the companies, therefore, the use of this ratio to invest is risky. The average price to operating
profits ratio of the pharmaceutical industry is 17.80, indicating a lower number of operating profit
comparing with JNJ ratio. (Valuation Ratios, 2016)
Dividend Discount Model
The dividend discount model is used to calculate the present value ... Show more content on
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Moreover, the pharmaceutical industry is increasing the profit margin yearly, when the growth is
steady and the intellectual property rights are really favorable for the industry in order to maintain
the performance.
The return relative valuation shows solid ratios similar to the industry, therefore the investment on
the company do pay back on the short tern. The dividend discount model indicates that the stock
price of Johnson and Johnson is overvalued using both models. This is the only critical area were
JNJ shows weaknesses. However, as was mentioned before, the dividend discount model does not
incorporate to the calculus the brand value or financials measures.
Lastly, the free cash flow valuation od the company denotes the strongly perspective for the coming

A Proposal Response On Climate Change And 192 Countries
Recommendation
This policy memo response the People's Climate March held on New York, September 21, 2014, by
focusing on how to decrease New York's level greenhouse gas emissions by 80 percent by 2050
from 2005 levels . Despite the fact that 195 countries have become Parties to The United Nations
Framework Convention on Climate Change and 192 countries have signed the protocol , the climate
crisis has not been solved but accelerated. By introduction a new energy–efficient standard in New
York City to both public and private buildings could largely relieve this intensified situation and
help sustain momentum from the People's Climate March. This new proposal will transform New
York City into an eco–friendly city with less greenhouse gas ... Show more content on
Helpwriting.net ...
Big cities like New York with dense popularity should be extremely concerned about this
phenomenon by introducing new feasible energy saving proposal to mollify this challenge.
One of the main solution is to decrease or maintain the same greenhouse gas (GHG) emission level
for temperature control. Since nearly three–quarters of the GHG in New York City is emit from
buildings , targeted project aim at renew existing low energy efficiency building and expand more
new clean energy technology in both public and private housing. The new plan named "New City,
Built to Last" should be activate to transform New York City's Buildings for a Low–Carbon Future .
With this affordable project, every citizen could enjoy the benefit of an advanced low–carbon city,
improving the public health in long–term. Moreover, the new plan will generate large amount of
addition job positions to better boost the economy.
To better analysis the effect of this new plan, a stakeholder map is illustrate below, by placing each
stakeholder in their position.
The most affected group will be residents living in New York which could be grouped by low
income, middle income and high income residents. The low income residents tend to have negative
attitude since they pay a higher share of their rent for energy than wealthier residents, and often live
in less–efficient buildings. An

Xyz Akjasfl.Fs Lk, Vk, Svlk Essay
FINANCIAL ACCOUNTING PROJECT WORK Batch (2013–15) CHANDRAGUPT INSTITUTE
OF MANAGEMENT PATNA By Group – 5 Rajeshwari Komal (60030) Suruchi Agrawal (60041)
Surabhi Priya (60039) Kumar Ankit (60018) Kumar Devashish (60019) Kumar Rohit (60021)
Xytech Inc. Submitted by Group–5 In this case, there is a company named Xytech Inc. which has
been started by three partners named Able, Baker and Cabot. Their product designs were very
successful and led to rapid growth of the company resulting in more need of capital to extend the
growth and size of the company. In this case, major financing transactions entered into by the
company for the first 10 years of its incorporation were taken into consideration. Here, ... Show
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The journal entries for this is, Dec.31 Able, Capital a/c...dr 18,000 Baker, Capital a/c...dr 18,000
Cabot, Capital a/c...dr 18,000 To Income summary 54,000 General Ledger: Notes Payable 100,000
Able, Capital Baker, Capital Cabot, Capital 18,000 18,000 18,000 18,000 18,000 18,000 Bal 82,000
Bal 82,000 Bal 82,000 100,000 100,000 100,000 Now, in the year 2001 the firm had faced some
liquidity problem for the short term due to shortage of cash. To deal with the problem, Cabot came
forward and provided a loan of $

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

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

Analyzing The Cash Flow Statement
Analysing the cash flow statement would be a great place to first look when initially analysing a
company. It is difficult for a company to manipulate the cash flow statements resulting in a
honourable place to find the actual numbers. The cash flow statement is indicative of how well the
company can convert net income into cash; it also helps to determine if a company is strong or
weak. Panera realizes a positive net cash flow and is a strong company from their statements. To
receive a deeper analysis, the three sections of the cash flow statements, cash flows from operations,
cash flow from investing and cash flow from financing should be dissected. In the first section of
cash flows from operations (CFO), Panera has had a strong and positive growth in cash flow from
their operations from 2010–13 with a slight drop in 2104 due to the fact their net income decreased
in 2014. During all five years, Panera stands in a upright position as their CFO is greater than net
income. A ratio can be computed to see how high the quality of net income is by adding net income
with deprecation dividing by the CFO shows that outside of 2010, net income proves to be of high
quality. From the years 2011–2014 this ratio hovers around 90%, while in 2010 this ratio falters to
75% due to a high level of cash generated in accrued expenses. Although the net income remained
high quality in 2014 it is concerning that figured dropped due to an increase in expenses.
Cash flow from investing

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

The P/E multiple D)
The

Mutual Fund Cash Flows and Stock Market Performance
Mutual Fund Cash Flows and Stock Market Performance*
During the decade of the 1990's through the year 2001 there were some major shifts in the
deployment of investment assets. Based on a variety of measures, mutual funds grew dramatically as
vehicles for investing in portfolios of stock. Specifically net cash flows into equity funds grew from
$13 billion in 1990 to $310 billion in the year 2000.1 During that same period the number of equity
funds rose from 1,100 to 4,395, while the number of accounts in those funds increased from 22
million to 162 million. The cumulative effect of the new money injected into equity funds, together
with reinvestment of dividends, plus the attendant stock price appreciation has produced a
phenomenal ... Show more content on Helpwriting.net ...
The second explanatory variable in our study (M2) was the monthly growth rate of the M2 money
supply. This variable may be viewed as a measure of the change in national monetary liquidity.
Money supply growth also influences the stock market through its impact on general business
conditions and economic activity. The third flow related variable, monthly changes in the federal
funds rate (FF), provides information on the Federal Reserve's efforts to stimulate or dampen the
future growth of financial liquidity. Both fixed–income and equity markets pay close attention to
Federal Reserve efforts to encourage or restrict economic growth through interest rate changes.
The final variable was an index of corporate profit growth (EPS). Earnings per share on the S&P
500 index was available on a quarterly basis, and using interpolation, monthly estimates of earnings
were obtained. The growth rate of the estimated monthly earnings was calculated as the percentage
change from the same calendar month of the prior year. In essence we applied the same type of
comparisons used when companies contrast their most recent quarterly results to the same quarter of
the previous year. This also has the effect of reducing problems associated with seasonal variations.2
Empirical Findings
Results of the analysis are presented in Equation (1) with the t–statistics shown in parentheses. The
three flow–related variables (MF, M2, FF) were all

Free Cash Flow and Corporate Valuation Model
Assignment Chapter 15
True/False
Indicate whether the statement is true or false.
_F___ 1. The corporate valuation model cannot be used unless a company doesn 't pay dividends.
_T___ 2. Free cash flows should be discounted at the firm 's weighted average cost of capital to find
the value of its operations.
_F___ 3. Value–based management focuses on sales growth, profitability, capital requirements, the
weighted average cost of capital, and the dividend growth rate.
_F___ 4. Two important issues in corporate governance are (1) the rules that cover the board 's
ability to fire the CEO and (2) the rules that cover the CEO 's ability to remove members of the
board.
_F___ 5. If a company 's expected return on ... Show more content on Helpwriting.net ...
If the weighted average cost of capital is 15%, what is the firm 's value of operations, in millions? a.
| $948 | b. | $998 | c. | $1,050 | d. | $1,103 | e. | $1,158 |
____ 16. Suppose Leonard, Nixon, & Shull Corporation 's projected free cash flow for next
year is $100,000, and FCF is expected to grow at a constant rate of 6%. If the company 's weighted
average cost of capital is 11%, what is the value of its operations? a. | $1,714,750 | b. | $1,805,000 |
c. | $1,900,000 | d. | $2,000,000 | e. | $2,100,000 |
____ 17. Zhdanov Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be –$10
million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant
rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm 's value of
operations, in millions? a. | $158 | b. | $167 | c. | $175 | d. | $184 | e. | $193 |
____ 18. Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average
cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0
value of operations, in millions? Assume that the ROIC is expected to remain constant in Year 2 and
beyond (and do not make any half–year adjustments).

Year: | 1 | 2 | Free cash flow: | –$50 | $100 |
a. | $1,456 | b. | $1,529 | c. | $1,606 | d. | $1,686 | e. | $1,770 |
____ 19. A

Valuation Is The Price Of Everything, But The Value Of...
According to Oscar Wilde, " a cynic is one who knows the price of everything, but the value of
nothing".
Valuation is at the heart of any investment decision, whether that decision is buy, sell or hold.
Every assets have to be valued in order to take an investment decision, and their sources have to
been understood as well. Various methods of valuation can be used, and a certain degree of
uncertainty exists.A valuation is uncertain. A good valuation does not provide a precise estimate of
value.Nevertheless, a valuation enables to get a large overview in order to take an investment
decision.For that reason valuation is a strategic aspect in many areas of finance. In corporate
finance, the firm's value aims to be as high as possible and will have an effect on corporate
decisions, including projects to develop and where to find funds, and on the dividend policy.
In such a way to study the topic, we will discuss first the Net Asset Value and its advantages and
disadvantages, then the Discounted cash flow method and to finish the dividend discount model.
The net asset value (NAV) method measures the value of a fund's assets. It enables investors to
analyse a fund's performance market and industry standards such as Moody's.
The NAV is the book value of equity, in other words the total value of a company's assets less its
liabilities total value.
The first advantage to the Net Asset Value is the availableness of the data it performs.
It also allows adjustments. Then, it is

Capital Asset Pricing Model (Capm) Versus the Discounted...
Capital Asset Pricing Model (CAPM) Versus the Discounted Cash Flows Method
Managerial Analysis/BUSN 602
Capital asset pricing model or CAPM is a financial model that measures the risk premium inherent
in equity investments like common stocks while Discounted Cash Flow or DCF compares the cost
of an investment with the present value of future cash flows generated by the investment with the
mindset being that if the cash flow is positive, then the investment is good. Generally speaking,
CAPM is a model that describes the relationship between risk and expected return and DCF is a
valuation method used to estimate the attractiveness of an investment opportunity. So what are the
differences, advantages and disadvantages of each one? How ... Show more content on
Helpwriting.net ...
It is focused on cash flow rather than accounting practices and allows for different components of a
company to be valued separately. Conversely, the biggest challenge of the DCF method is that the
determined value is only as accurate as the information it is given, that being the FCF, TV and
discount rates. In other words, if the information given to determine the DCF isn't accurate then the
fair value for the investment won't be accurate and the model won't be helpful when assessing stock
prices due to the inaccuracies. Furthermore, DCF is only good for long term values not short term
investing. "The bottom line is that DCF is a rigorous valuation approach that can focus your mind
on the right issues, help you see the risk and help you separate winning stocks from losers and help
reduce uncertainty." (McClure, 2011) So, now that we've looked at CAPM and DCF, what can we
conclude?
The CAPM is a single factor model because it based on the hypothesis that required rate of return
can be predicted using one factor that being systematic risk. It looks at risk and rates of returns,
compares then to the stock market providing a usable measure of risk to help investors determine
what return they will get for risking their money in an investment. There are a lot of assumptions
and drawbacks of CAPM that lead to the conclusion that those investors utilizing this

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