This session was conducted on OpenTuition chatroom (

Size: px
Start display at page:

Download "This session was conducted on OpenTuition chatroom (http://www.opentuition.com/chat/)"

Transcription

1 [13:00:14] peternewman : My Tips for F9, June 2010 Investment Appraisal Chapters 9 & 10 OpenTuition Lecture NotesNumeric: Capital Rationing and/or Sensitivity Analysis. Of course, you must know how to calculate NPV, IRR, P/B, Discounted P/B and ARR. And discuss advantages and disadvantages of each. [13:00:34] haziq : hi [13:00:58] peternewman : Theory: Risk v- Uncertainty featuring a brief description of Sensitivity analysis, Simulation, Probability analysis and Decision Trees. [13:01:05] peternewman : Cost of Capital Numeric: WACC calculation possibly involving Ungearing and Re-gearing the beta of the CAPM when finding the Ke.. and Convertible Redeemable Debt for KDAT (using IRR) [13:01:21] peternewman : Theory: When is the USE of WACC acceptable as he DF in Investment Appraisal? Compare CAPM and the DVM when calculating Ke? [13:01:48] peternewman : Business Valuations Numeric: Rights Issue ~ Calculate TERP, Value of Right and change in Wealth after Rights Issue. Calculate Current theoretical share price based on P/E Model and DVM [13:02:03] peternewman : Financial Analysis Numeric: Most likely from a Shareholders perspective your approach needs to be under the following headings: Profitability, Shareholder Ratios (TSR, EPS, DPS, etc,) and maybe Gearing depending on the wording of the question. [13:02:22] peternewman : Numeric: A Financial Analysis Question on Capital Structure or Gearing should also not be ruled out see Gorwa (past paper), which involves an understanding of Interest Rate Risk Management. [13:02:36] peternewman : Foreign Exchange & Interest Rate Risk. Numeric: Forex 4 way Equivalence Model (PPPT or IRPT + Fisher Effect) Interest Rate Risk calculate the payment under an FRA Theory: Compare Currency Future Contract with Forward Contract..Describe the main features of Interest RO s (CAP, FLOOR, COLLAR), I [13:03:06] peternewman : Interest RF, and Interest RateSwaps.. [13:03:21] peternewman : Working Capital Management Numeric: Stocks Management (EOQ and calculate Total Inventory Costs pa, with DISCOUNTS). Cash Management (Baumol and Miller-ORR). Debtors and the cost of a discount and/or change in credit Policy. [13:03:35] peternewman : Theory: Factors affecting the SIZE of the Investment in W/C. Compare Debt Factoring with Invoice Discounting. Describe the FUNDING GAP faced by SME s and what remedies are available (Business angels, Venture Capital, SFLGS, Government, Local Authorities, Banks, Equity, suitable. ST Sources of Funds [13:06:18] peternewman : Has anyone any further questions??? [13:19:37] haziq : has anybody any questions to ask from the tutor??

2 [13:20:24] baguma : still struggling with cost of capital calculation. what is the main thing to consider [13:21:59] baguma : is this the right place to ask the tutor? I am confused? [13:22:28] haziq : r we expected to thoroughly read from the first 2 sections of bpp book?? i.e. financial mgmt function and environment [13:25:17] peternewman : {Haziq} Did my page of Tips for june go up onto the chat room just now? [13:25:57] haziq : i dont know it luks like some1 deleted it... i m having net problems so i got disconnected [13:26:12] haziq : but i will request admin to put them back [13:26:37] peternewman : {Haziq} Ok - I'll do it again now... stand by! [13:27:08] haziq : {peternewman} oh so sweet of u! [13:27:09] baguma : My second question is i am always getting the IRR calculation wrong, what is the best way to deal with the calculation? i think my calculator is okay its just me [13:27:17] peternewman : My Tips for F9, June 2010 Investment Appraisal Chapters 9 & 10 OpenTuition Lecture NotesNumeric: Capital Rationing and/or Sensitivity Analysis. Of course, you must know how to calculate NPV, IRR, P/B, Discounted P/B and ARR. And discuss advantages and disadvantages of each. [13:27:33] peternewman : Theory: Risk v- Uncertainty featuring a brief description of Sensitivity analysis, Simulation, Probability analysis and Decision Trees. [13:27:47] peternewman : Cost of Capital Numeric: WACC calculation possibly involving Ungearing and Re-gearing the beta of the CAPM when finding the Ke.. and Convertible Redeemable Debt for KDAT (using IRR [13:28:09] peternewman : Theory: When is the USE of WACC acceptable as he DF in Investment Appraisal? Compare CAPM and the DVM when calculating Ke? [13:28:25] peternewman : Business Valuations Numeric: Rights Issue ~ Calculate TERP, Value of Right and change in Wealth after Rights Issue. Calculate Current theoretical share price based on P/E Model and DVM [13:28:51] peternewman : Financial Analysis Numeric: Most likely from a Shareholders perspective your approach needs to be under the following headings: Profitability, Shareholder Ratios (TSR, EPS, DPS, etc,) and maybe Gearing depending on the wording of the question. [13:29:11] haziq : ppl get ur answers prepared as the tutor is here to assist u in exam preparation! [13:29:15] peternewman : Numeric: A Financial Analysis Question on Capital Structure or Gearing should also not be ruled out see Gorwa (past paper), which involves an understanding of Interest Rate Risk Management.

3 [13:29:36] peternewman : Foreign Exchange & Interest Rate Risk. Numeric: Forex 4 way Equivalence Model (PPPT or IRPT + Fisher Effect) Interest Rate Risk calculate the payment under an FRA [13:29:50] peternewman : Theory: Compare Currency Future Contract with Forward Contract..Describe the main features of Interest RO s (CAP, FLOOR, COLLAR), Interest RF, and Interest RateSwaps.. [13:30:09] peternewman : Working Capital Management Numeric: Stocks Management (EOQ and calculate Total Inventory Costs pa, with DISCOUNTS). Cash Management (Baumol and Miller-ORR). Debtors and the cost of a discount and/or change in credit Policy. [13:30:28] peternewman : Theory: Factors affecting the SIZE of the Investment in W/C. Compare Debt Factoring with Invoice Discounting. Describe the FUNDING GAP faced by SME s and what remedies are available (Business angels, Venture Capital, SFLGS, Government, Local Authorities, Banks, Equity, suitable. ST Sources of Funds [13:31:16] peternewman : Ok - these are my main Tips. I feel if you can do all of these sections you should be ok. [13:31:55] haziq : {peternewman} what about the first 2 parts (A & B) of BPP book?? [13:32:30] haziq : financial management function and inancial management environment?? [13:32:38] haziq : r they examined?? [13:33:32] haziq : {peternewman} :? [13:33:45] peternewman : {baguma} The approach to use for IRR is as follows: [13:35:12] peternewman : {baguma} 3 steps: (1)NPV calculation no1 (2) NPV calculation no.2 using a different DF (3) Interpolate between the 2 rates using the formula. [13:35:41] baguma : thanks this is makes more sense [13:36:09] peternewman : {Haziq} Sorry about the delay there: [13:36:24] haziq : {peternewman} no problem :) [13:37:18] peternewman : {Haziq} These 2 sections are very important - they are always examined! But perhaps this point is less obvious then some of the other sections. [13:39:35] peternewman : {Haziq} Popular questions include: (1) Discuss the Agency Problem... the problem between management and the shareholders. (2) Discuss the problem that exists between S/h objectives and all of the other stakeholders, (3) understanding odf key shareholder ratios etc., is ESSENTIAL [13:40:06] peternewman : {Haziq} To answer your question: Know those first 2 chapters very well!

4 [13:40:28] haziq : ok thanx 4 a comprehensive answer [13:40:46] haziq : {peternewman} plz can u explain marginal cost of capital approach? [13:42:25] peternewman : {Haziq} remember to always QUALIFY your answer to a purely Financial Question or calculation. For example, which is better... a money market hedge or a forwrdd market hedge? [13:43:01] haziq : {peternewman} ok [13:43:09] peternewman : Qualify your answer by stating that the Non - Financial Factors have been ignored!!!!!!! Do you see it in play now? [13:43:32] haziq : yeah [13:43:38] haziq : thanx alot! [13:43:46] haziq : :) [13:43:51] peternewman : {Haziq} You are very welcome! [13:44:11] haziq : {peternewman} plz can u explain marginal cost of capital approach? [13:45:07] peternewman : {Haziq} Marginal just means incremental?... I'm not sure what you mean... are you talking about F9 here? [13:45:33] haziq : yeah [13:45:49] haziq : its on page 271 on my bpp book [13:46:38] haziq : i hope u have the bpp book otherwise i will ask it from u on the forums [13:47:27] haziq : actually i have problems mainly in theoritical areas [13:47:48] haziq : like pecking order theory etc [13:48:57] peternewman : {Haziq} I don't really think this is an issue for this exam. I think what you are refereing to is perhaps the intrioduction of additional equity or debt which in turn leads to a change in the WACC. Therefore, you can not use the Existing WACC to evaluate the new project. You must then establish [13:50:26] peternewman : then establish a NEW WACC which reflects the risk associated with the new combination of DEbt and equity. [13:51:14] baguma : do we have another F9 chat session with you Peter? i missed yesterdays? this i s very useful [13:51:58] haziq : it says " the MC of capital approach involves calculating a marginal cut-off rate for acceptable investment projects by: 1) establishing rates of return 2. relating dividends or interest to those values to obtain a mc 4 each component3.

5 [13:52:11] peternewman : {Haziq} remember, the over-riding assumption with the use of WACC as the DF is that the projects under consideration are MARGINAL...in SIZE. This means that taking them on will NOT change the Existing WACC [13:53:02] haziq : 3. applying the mc to each component depending on its proportinate weight within the captal structure [13:53:17] haziq : and adding the weighted average cost [13:54:05] peternewman : {Haziq} Ask me the question later in the F9 Forum and I'll have achance to look at the BPP Text reference you mention.... But I guess we are talking about the area of when is acceptable to use WACC as the Df factor? [13:54:34] haziq : {peternewman} ok i will ask it there [13:54:50] haziq : yeah [13:56:18] peternewman : {baguma} You can still access yesterdays Chat as it has been recorded and is on the OT website > I will be here again next week and the week after... so you have lots of opportunities to ask questions... Don't forget to use the F9 forum if you any problems and I will get back to you in 24 hours! [13:56:35] haziq : y is everybody silent... dont u have any questions to ask??? exams r so near?? [13:57:08] haziq : {peternewman} what is a tsr among the s/h ratios?? [13:57:14] haziq : TSR* [13:57:24] baguma : than [13:57:43] haziq : u mentiones it in ur tips [13:57:50] haziq : mentioned* [13:57:52] baguma : {peternewman} Thanks [14:00:24] peternewman : {Haziq} TSR stands for Total shareholder Return. Remember the total return to a shareholder comprises 2 components DIVs + Capital Gain... as a % of the purchase price of the share, this is the TSR. Compare it to the Ke derived under CAPM for example to see is the company under or over performing [14:01:04] haziq : {peternewman} thanx [14:03:22] baguma : {peternewman} where can i find the Gorwa past paper? [14:05:25] peternewman : {baguma} december 2008, Question 2 [14:06:01] baguma : {peternewman} thanks, let me have a look at it tomorrow [14:06:36] peternewman : {baguma} This really is an important question to understand re: Financial Analysis of capital structure together with the principles of interest Rate Risk management

6 [14:08:38] baguma : {peternewman} Thanks Peter [14:09:05] haziq : {peternewman} do u think pecking order theory is important for the exam?? [14:11:35] peternewman : {Haziq} This was examined within Question, Part 9c) June so I doubt if it will be an issue this time...but heh, who knows! Anyway, it's really quite simple! [14:12:11] haziq : ok [14:12:16] peternewman : {Haziq} That should read Question 1, Part (c) [14:12:42] haziq : yeah i was also woondering how it cud be q9 :D [14:12:49] baguma : {peternewman} do you have recommendations of good questions to help with learning WACC? [14:14:41] peternewman : {Haziq} There are 4 approaches to finding the Optimal Capital Structure 91) Traditional View (2) M6M 1958, No Tax (3)) M6 M 1963, with Tax (4) Pecking Order Theory... First, RE Second Debt, Third Equity!!!! [14:14:50] candijordan : well i take it im late [14:15:19] haziq : ok [14:15:44] haziq : {candijordan} its ok u can our gr8 tutor peter wotever u want :) [14:15:51] haziq : u can ask * [14:16:09] peternewman : {baguma} Every singe paper under the new F9 syllabus has a question on WACC. There is only about 5 of them altogether. I would do them all if I was you... several times over!!! [14:17:23] peternewman : Has anyone any further questions before I go???? [14:17:45] baguma : {peternewman} Nice one Peter,talk soon [14:17:58] haziq : thanx 4 the wonderful question [14:18:12] haziq : thanx 4 the wonderful session! [14:18:15] candijordan : will the session be online? [14:18:40] haziq : {candijordan} hurry up if u want to ask any question from our tutor PETER [14:18:56] peternewman : Don't forget - you can leave a question for me on the F9 Forums anytime and I will be back to you within 24/48 hours. [14:18:57] haziq : {candijordan} its a question answer session [14:19:16] haziq : {peternewman} thanx [14:19:27] prakash : hello [14:19:35] prakash : me prakash

7 [14:19:47] prakash : nice to join u all [14:20:13] baguma : {prakash} we are logging off now [14:20:29] peternewman : I will see you all again NEXT TUESDAY at the same time...all the very best with your preparations for the exam...work on my my tips BEFORE next week! BYE. [14:20:41] prakash : ok bye [14:21:02] prakash : how can i get ur tips [14:21:33] prakash : hello peternewman [14:21:37] haziq : {prakash} the chat history will be uploaded soon

This session was conducted on OpenTuition chatroom (http://www.opentuition.com/chat/)

This session was conducted on OpenTuition chatroom (http://www.opentuition.com/chat/) [13:01:26] peternewman : Hello all, this is Peter Newman... your F9 Tutor for this evening. How can I assist you? [13:02:08] mrasheedat : pls i need u to explain to me the permanent current asset nd the

More information

CFS. Syllabus. Certified Finance Specialist. International benchmark in Finance profession

CFS. Syllabus. Certified Finance Specialist. International benchmark in Finance profession CFS Certified Finance Specialist Syllabus International benchmark in Finance profession Certified Finance Specialist Summary: This award will provide candidates the opportunity to gain advanced level knowledge

More information

Examiner s report F9 Financial Management June 2013

Examiner s report F9 Financial Management June 2013 Examiner s report F9 Financial Management June 2013 General Comments The examination consisted of four compulsory questions, each worth 25 marks. Most candidates attempted all four questions and there

More information

1 (a) Net present value of investment in new machinery Year 1 2 3 4 5 $000 $000 $000 $000 $000 Sales income 6,084 6,327 6,580 6,844

1 (a) Net present value of investment in new machinery Year 1 2 3 4 5 $000 $000 $000 $000 $000 Sales income 6,084 6,327 6,580 6,844 Answers Fundamentals Level Skills Module, Paper F9 Financial Management June 2013 Answers 1 (a) Net present value of investment in new machinery Year 1 2 3 4 5 $000 $000 $000 $000 $000 Sales income 6,084

More information

Question 1. Marking scheme. F9 ACCA June 2013 Exam: BPP Answers

Question 1. Marking scheme. F9 ACCA June 2013 Exam: BPP Answers Question 1 Text references. NPV is covered in Chapter 8 and real or nominal terms in Chapter 9. Financial objectives are covered in Chapter 1. Top tips. Part (b) requires you to explain the different approaches.

More information

Financial Management (F9)

Financial Management (F9) Financial Management (F9) This syllabus and study guide is designed to help with planning study and to provide detailed information on what could be assessed in any examination session. THE STRUCTURE OF

More information

Further comments are provided under Examiner s Comments for individual questions.

Further comments are provided under Examiner s Comments for individual questions. F3 FINANCIAL STRATEGY Examiner s general comments This was the first diet under the 2010 syllabus for F3, which replaces P9 under the old syllabus. The syllabus content is largely unchanged but a revised

More information

Financial Management (F9) September 2015 to June 2016

Financial Management (F9) September 2015 to June 2016 Financial Management (F9) September 2015 to June 2016 This syllabus and study guide are designed to help with planning study and to provide detailed information on what could be assessed in any examination

More information

Financial Management (F9) 2011

Financial Management (F9) 2011 Financial Management (F9) 2011 This syllabus and study guide is designed to help with planning study and to provide detailed information on what could be assessed in any examination session. THE STRUCTURE

More information

Cash flow before tax 1,587 1,915 1,442 2,027 Tax at 28% (444) (536) (404) (568)

Cash flow before tax 1,587 1,915 1,442 2,027 Tax at 28% (444) (536) (404) (568) Answers Fundamentals Level Skills Module, Paper F9 Financial Management June 2014 Answers 1 (a) Calculation of NPV Year 1 2 3 4 5 $000 $000 $000 $000 $000 Sales income 5,670 6,808 5,788 6,928 Variable

More information

Fundamentals Level Skills Module, Paper F9

Fundamentals Level Skills Module, Paper F9 Answers Fundamentals Level Skills Module, Paper F9 Financial Management June 2008 Answers 1 (a) Calculation of weighted average cost of capital (WACC) Cost of equity Cost of equity using capital asset

More information

Institute of Chartered Accountant Ghana (ICAG) Paper 2.4 Financial Management

Institute of Chartered Accountant Ghana (ICAG) Paper 2.4 Financial Management Institute of Chartered Accountant Ghana (ICAG) Paper 2.4 Financial Management Final Mock Exam 1 Marking scheme and suggested solutions DO NOT TURN THIS PAGE UNTIL YOU HAVE COMPLETED THE MOCK EXAM ii Financial

More information

Paper F9. Financial Management. Fundamentals Pilot Paper Skills module. The Association of Chartered Certified Accountants

Paper F9. Financial Management. Fundamentals Pilot Paper Skills module. The Association of Chartered Certified Accountants Fundamentals Pilot Paper Skills module Financial Management Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Do NOT open this paper

More information

Fundamentals Level Skills Module, Paper F9. Section A. Monetary value of return = $3 10 x 1 197 = $3 71 Current share price = $3 71 $0 21 = $3 50

Fundamentals Level Skills Module, Paper F9. Section A. Monetary value of return = $3 10 x 1 197 = $3 71 Current share price = $3 71 $0 21 = $3 50 Answers Fundamentals Level Skills Module, Paper F9 Financial Management December 2014 Answers Section A 1 A Monetary value of return = $3 10 x 1 197 = $3 71 Current share price = $3 71 $0 21 = $3 50 2

More information

CIMA Strategic Level F3 FINANCIAL STRATEGY (REVISION SUMMARIES)

CIMA Strategic Level F3 FINANCIAL STRATEGY (REVISION SUMMARIES) CIMA Strategic Level F3 FINANCIAL STRATEGY (REVISION SUMMARIES) Chapter Title Page number 1 Introduction to financial strategy 3 2 Analysing performance 7 3 Planning and forecasting 11 4 Long term finance

More information

Fundamentals Level Skills Module, Paper F9

Fundamentals Level Skills Module, Paper F9 Answers Fundamentals Level Skills Module, Paper F9 Financial Management December 2008 Answers 1 (a) Rights issue price = 2 5 x 0 8 = $2 00 per share Theoretical ex rights price = ((2 50 x 4) + (1 x 2 00)/5=$2

More information

Source of Finance and their Relative Costs F. COST OF CAPITAL

Source of Finance and their Relative Costs F. COST OF CAPITAL F. COST OF CAPITAL 1. Source of Finance and their Relative Costs 2. Estimating the Cost of Equity 3. Estimating the Cost of Debt and Other Capital Instruments 4. Estimating the Overall Cost of Capital

More information

Paper F9. Financial Management. Friday 7 June 2013. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants.

Paper F9. Financial Management. Friday 7 June 2013. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants. Fundamentals Level Skills Module Financial Management Friday 7 June 2013 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Formulae

More information

1 (a) Calculation of net present value (NPV) Year 1 2 3 4 5 6 $000 $000 $000 $000 $000 $000 Sales revenue 1,600 1,600 1,600 1,600 1,600

1 (a) Calculation of net present value (NPV) Year 1 2 3 4 5 6 $000 $000 $000 $000 $000 $000 Sales revenue 1,600 1,600 1,600 1,600 1,600 Answers Fundamentals Level Skills Module, Paper F9 Financial Management December 2011 Answers 1 (a) Calculation of net present value (NPV) Year 1 2 3 4 5 6 $000 $000 $000 $000 $000 $000 Sales revenue 1,600

More information

CIMA F3 Course Notes. Chapter 11. Company valuations

CIMA F3 Course Notes. Chapter 11. Company valuations CIMA F3 Course Notes Chapter 11 Company valuations Personal use only - not licensed for use on courses 144 1. Company valuations There are several methods of valuing the equity of a company. The simplest

More information

Examiner s report F9 Financial Management December 2014

Examiner s report F9 Financial Management December 2014 Examiner s report F9 Financial Management December 2014 General Comments The F9 examination paper consisted of two sections. Section A contained 20 multiple-choice questions worth two marks each. Section

More information

This was the first sitting of F3 on PC. It was a pilot sitting and only open to UK re-sit candidates. The overall pass rate was 51%.

This was the first sitting of F3 on PC. It was a pilot sitting and only open to UK re-sit candidates. The overall pass rate was 51%. F3 FINANCIAL STRATEGY Examiner s general comments This was the first sitting of F3 on PC. It was a pilot sitting and only open to UK re-sit candidates. The overall pass rate was 51%. Question One involved

More information

THE COST OF CAPITAL THE EFFECT OF CHANGES IN GEARING

THE COST OF CAPITAL THE EFFECT OF CHANGES IN GEARING December 2015 Examinations Chapter 19 Free lectures available for - click here THE COST OF CAPITAL THE EFFECT OF CHANGES IN GEARING 103 1 Introduction In this chapter we will look at the effect of gearing

More information

cost of capital, 01 technical this measurement of a company s cost of equity THere are two ways of estimating the cost of equity (the return

cost of capital, 01 technical this measurement of a company s cost of equity THere are two ways of estimating the cost of equity (the return 01 technical cost of capital, THere are two ways of estimating the cost of equity (the return required by shareholders). Can this measurement of a company s cost of equity be used as the discount rate

More information

Diploma in Financial Management Examination Module B Paper DB1 incorporating subject areas: Financial Strategy; Risk Management

Diploma in Financial Management Examination Module B Paper DB1 incorporating subject areas: Financial Strategy; Risk Management Answers Diploma in Financial Management Examination Module B Paper DB1 incorporating subject areas: Financial Strategy; Risk Management June 2005 Answers 1 D Items 2, 3 and 4 are correct. Item 1 relates

More information

Fundamentals Level Skills Module, Paper F9. Section A. Mean growth in earnings per share = 100 x [(35 7/30 0) 1/3 1] = 5 97% or 6%

Fundamentals Level Skills Module, Paper F9. Section A. Mean growth in earnings per share = 100 x [(35 7/30 0) 1/3 1] = 5 97% or 6% Answers Fundamentals Level Skills Module, Paper F9 Financial Management June 2015 Answers Section A 1 A 2 D 3 D Mean growth in earnings per share = 100 x [(35 7/30 0) 1/3 1] = 5 97% or 6% 4 A 5 D 6 B 7

More information

ACCA F9 FINANCIAL MANAGEMENT. Study System Sample Session

ACCA F9 FINANCIAL MANAGEMENT. Study System Sample Session ACCA F9 FINANCIAL MANAGEMENT Study System Sample Session ATC INTERNATIONAL ACCA PAPER F9 FINANCIAL MANAGEMENT STUDY SYSTEM No responsibility for loss occasioned to any person acting or refraining from

More information

Level 6 Advanced Diploma in Finance (531) 126 Credits

Level 6 Advanced Diploma in Finance (531) 126 Credits Level 6 Advanced Diploma in Finance (531) 126 Credits Unit: Finance Theory Guided Learning Hours: 210 Exam Paper No.: 4 Prerequisites: Knowledge of Finance. Number of Credits: 21 Corequisites: A pass or

More information

Indicative Content. 1.1.1 The main types of corporate form. 1.1.2 The regulatory framework for companies. 1.1.6 Shareholder Value Analysis.

Indicative Content. 1.1.1 The main types of corporate form. 1.1.2 The regulatory framework for companies. 1.1.6 Shareholder Value Analysis. Unit Title: Corporate Finance Unit Reference Number: L/601/3900 Guided Learning Hours: 210 Level: Level 6 Number of Credits: 25 Learning Outcome 1 The learner will: Understand the role of the Corporate

More information

Business Finance. Theory and Practica. Eddie McLaney PEARSON

Business Finance. Theory and Practica. Eddie McLaney PEARSON Business Finance Theory and Practica Eddie McLaney PEARSON Harlow, England London New York Boston San Francisco Toronto Sydney Auckland Singapore Hong Kong Tokyo Seoul Taipei New Delhi Cape Town Säo Paulo

More information

Examiner s report F9 Financial Management June 2011

Examiner s report F9 Financial Management June 2011 Examiner s report F9 Financial Management June 2011 General Comments Congratulations to candidates who passed Paper F9 in June 2011! The examination paper looked at many areas of the syllabus and a consideration

More information

Fundamentals Level Skills Module, Paper F9. Section B

Fundamentals Level Skills Module, Paper F9. Section B Answers Fundamentals Level Skills Module, Paper F9 Financial Management September/December 2015 Answers Section B 1 (a) Market value of equity = 15,000,000 x 3 75 = $56,250,000 Market value of each irredeemable

More information

There was no evidence of time pressure in this exam and the majority of candidates were able to attempt all questions within the time limit.

There was no evidence of time pressure in this exam and the majority of candidates were able to attempt all questions within the time limit. Examiner s General Comments Performance on F3 in May was a distinct improvement over some previous diets. This improvement was evident in both home and overseas centres although there were significant

More information

Goals. Stock Valuation. Dividend Discount Model Constant Dividends. Dividend Discount Model Constant Dividends

Goals. Stock Valuation. Dividend Discount Model Constant Dividends. Dividend Discount Model Constant Dividends Stock Valuation Economics 71a: Spring 2007 Mayo 11 Malkiel, 5, 6 (136-144), 8 Lecture notes 4.2 Goals Dividend valuation model dividend discount model Forecasting earnings, dividends, and prices Ratio

More information

TIP If you do not understand something,

TIP If you do not understand something, Valuing common stocks Application of the DCF approach TIP If you do not understand something, ask me! The plan of the lecture Review what we have accomplished in the last lecture Some terms about stocks

More information

6. Debt Valuation and the Cost of Capital

6. Debt Valuation and the Cost of Capital 6. Debt Valuation and the Cost of Capital Introduction Firms rarely finance capital projects by equity alone. They utilise long and short term funds from a variety of sources at a variety of costs. No

More information

Paper F9. Financial Management. Friday 6 June 2014. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants.

Paper F9. Financial Management. Friday 6 June 2014. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants. Fundamentals Level Skills Module Financial Management Friday 6 June 2014 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Formulae

More information

1 (a) NPV calculation Year 1 2 3 4 5 $000 $000 $000 $000 $000 Sales revenue 5,614 7,214 9,015 7,034. Contribution 2,583 3,283 3,880 2,860

1 (a) NPV calculation Year 1 2 3 4 5 $000 $000 $000 $000 $000 Sales revenue 5,614 7,214 9,015 7,034. Contribution 2,583 3,283 3,880 2,860 Answers Fundamentals Level Skills Module, Paper F9 Financial Management December 2012 Answers 1 (a) NPV calculation Year 1 2 3 4 5 $000 $000 $000 $000 $000 Sales revenue 5,614 7,214 9,015 7,034 Variable

More information

Time allowed Formulae Sheet, Present Value and Annuity Tables are on

Time allowed Formulae Sheet, Present Value and Annuity Tables are on Fundamentals Level Skills Module Financial Management Friday 15 June 2012 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Formulae

More information

Equity Analysis and Capital Structure. A New Venture s Perspective

Equity Analysis and Capital Structure. A New Venture s Perspective Equity Analysis and Capital Structure A New Venture s Perspective 1 Venture s Capital Structure ASSETS Short- term Assets Cash A/R Inventories Long- term Assets Plant and Equipment Intellectual Property

More information

TYLER JUNIOR COLLEGE School of Continuing Studies 1530 SSW Loop 323 Tyler, TX 75701 1.800.298.5226 www.tjc.edu/continuingstudies/mycaa

TYLER JUNIOR COLLEGE School of Continuing Studies 1530 SSW Loop 323 Tyler, TX 75701 1.800.298.5226 www.tjc.edu/continuingstudies/mycaa TYLER JUNIOR COLLEGE School of Continuing Studies 1530 SSW Loop 323 Tyler, TX 75701 1.800.298.5226 www.tjc.edu/continuingstudies/mycaa Education & Training Plan Finance Professional Program Student Full

More information

NIKE Case Study Solutions

NIKE Case Study Solutions NIKE Case Study Solutions Professor Corwin This case study includes several problems related to the valuation of Nike. We will work through these problems throughout the course to demonstrate some of the

More information

Net revenue 785 25 1,721 05 5,038 54 3,340 65 Tax payable (235 58) (516 32) (1,511 56) (1,002 20)

Net revenue 785 25 1,721 05 5,038 54 3,340 65 Tax payable (235 58) (516 32) (1,511 56) (1,002 20) Answers Fundamentals Level Skills Module, Paper F9 Financial Management December 2013 Answers 1 (a) Calculating the net present value of the investment project using a nominal terms approach requires the

More information

Fundamentals Level Skills Module, Paper F9

Fundamentals Level Skills Module, Paper F9 Answers Fundamentals Level Skills Module, Paper F9 Financial Management June 2009 Answers 1 (a) Weighted average cost of capital (WACC) calculation Cost of equity of KFP Co = 4 0 + (1 2 x (10 5 4 0)) =

More information

Foundations in Financial Management (FFM) September 2016 to June 2017

Foundations in Financial Management (FFM) September 2016 to June 2017 Foundations in Financial Management (FFM) September 2016 to June 2017 This syllabus and study guide is designed to help with teaching and learning and is intended to provide detailed information on what

More information

STUDENT CAN HAVE ONE LETTER SIZE FORMULA SHEET PREPARED BY STUDENT HIM/HERSELF. FINANCIAL CALCULATOR/TI-83 OR THEIR EQUIVALENCES ARE ALLOWED.

STUDENT CAN HAVE ONE LETTER SIZE FORMULA SHEET PREPARED BY STUDENT HIM/HERSELF. FINANCIAL CALCULATOR/TI-83 OR THEIR EQUIVALENCES ARE ALLOWED. Test III-FINN3120-090 Fall 2009 (2.5 PTS PER QUESTION. MAX 100 PTS) Type A Name ID PRINT YOUR NAME AND ID ON THE TEST, ANSWER SHEET AND FORMULA SHEET. TURN IN THE TEST, OPSCAN ANSWER SHEET AND FORMULA

More information

SOLUTIONS. Practice questions. Multiple Choice

SOLUTIONS. Practice questions. Multiple Choice Practice questions Multiple Choice 1. XYZ has $25,000 of debt outstanding and a book value of equity of $25,000. The company has 10,000 shares outstanding and a stock price of $10. If the unlevered beta

More information

Paper F9. Financial Management. Specimen Exam applicable from December 2014. Fundamentals Level Skills Module

Paper F9. Financial Management. Specimen Exam applicable from December 2014. Fundamentals Level Skills Module Fundamentals Level Skills Module Financial Management Specimen Exam applicable from December 2014 Time allowed Reading and planning: 15 minutes Writing: 3 hours This paper is divided into two sections:

More information

Education & Training Plan Finance Professional Certificate Program with Externship

Education & Training Plan Finance Professional Certificate Program with Externship Testing Services and Programs 1200 N. DuPont Highway Dover, DE 19901 https://www.desu.edu/academics/mycaa Contact: Amystique Harris-Church 302.857.6143 achurch@desu.edu Student Full Name: Education & Training

More information

Total 100 All learning outcomes must be evidenced; a 10% aggregate variance is allowed.

Total 100 All learning outcomes must be evidenced; a 10% aggregate variance is allowed. Prescription: 603 Business Finance Elective prescription Level 6 Credit 20 Version 2 Aim Prerequisites Recommended prior knowledge Students will apply financial management knowledge and skills to small

More information

Interpretation of Financial Statements

Interpretation of Financial Statements Interpretation of Financial Statements Author Noel O Brien, Formation 2 Accounting Framework Examiner. An important component of most introductory financial accounting programmes is the analysis and interpretation

More information

ACA professional stage subject grids

ACA professional stage subject grids ACA professional stage subject grids HEI Degree programme(s) ACA Professional Stage Accounting Subject Grid Please complete the grid giving details of the modules on which the application for credit is

More information

ADVANCED INVESTMENT APPRAISAL

ADVANCED INVESTMENT APPRAISAL RELEVANT TO ACCA QUALIFICATION PAPER F9 Studying Paper F9? Performance objectives 15 and 16 are relevant to this exam Investment appraisal is one of the eight core topics within Paper F9, Financial Management

More information

CHAPTER 14 COST OF CAPITAL

CHAPTER 14 COST OF CAPITAL CHAPTER 14 COST OF CAPITAL Answers to Concepts Review and Critical Thinking Questions 1. It is the minimum rate of return the firm must earn overall on its existing assets. If it earns more than this,

More information

1. What are the three types of business organizations? Define them

1. What are the three types of business organizations? Define them Written Exam Ticket 1 1. What is Finance? What do financial managers try to maximize, and what is their second objective? 2. How do you compare cash flows at different points in time? 3. Write the formulas

More information

2009 AICPA Newly Released Questions Business

2009 AICPA Newly Released Questions Business Following are multiple choice questions recently released by the AICPA. These questions were released by the AICPA with letter answers only. Our editorial board has provided the accompanying explanation.

More information

INSTITUTE OF ACTUARIES OF INDIA. CT2 Finance and Financial Reporting MAY 2009 EXAMINATION INDICATIVE SOLUTION

INSTITUTE OF ACTUARIES OF INDIA. CT2 Finance and Financial Reporting MAY 2009 EXAMINATION INDICATIVE SOLUTION INSTITUTE OF ACTUARIES OF INDIA CT2 Finance and Financial Reporting MAY 2009 EXAMINATION INDICATIVE SOLUTION General guidelines to markers: The solutions provided here are indicative ones. Please award

More information

Contribution 787 1,368 1,813 983. Taxable cash flow 682 1,253 1,688 858 Tax liabilities (205) (376) (506) (257)

Contribution 787 1,368 1,813 983. Taxable cash flow 682 1,253 1,688 858 Tax liabilities (205) (376) (506) (257) Answers Fundamentals Level Skills Module, Paper F9 Financial Management June 2012 Answers 1 (a) Calculation of net present value (NPV) As nominal after-tax cash flows are to be discounted, the nominal

More information

To provide students with a thorough understanding of techniques, theories and issues found in practical corporate finance situations.

To provide students with a thorough understanding of techniques, theories and issues found in practical corporate finance situations. DIPLOMA IN CORPORATE FINANCE - Paper One: Corporate Finance Techniques and Theory Aim Content 1. Financial Statement Analysis 2. Valuation 3. Debt and Equity 4. Mergers, Acquisitions and Disposals 5. Regulation,

More information

Chapter 17 Corporate Capital Structure Foundations (Sections 17.1 and 17.2. Skim section 17.3.)

Chapter 17 Corporate Capital Structure Foundations (Sections 17.1 and 17.2. Skim section 17.3.) Chapter 17 Corporate Capital Structure Foundations (Sections 17.1 and 17.2. Skim section 17.3.) The primary focus of the next two chapters will be to examine the debt/equity choice by firms. In particular,

More information

Course Outline. FNCE 4110-3 Advanced Financial Management for Accountants (3,0,0)

Course Outline. FNCE 4110-3 Advanced Financial Management for Accountants (3,0,0) Calendar Description Course Outline Department of Accounting and Finance School of Business and Economics FNCE 4110-3 Advanced Financial Management for Accountants (3,0,0) Building on either FNCE 2120:

More information

1. CFI Holdings is a conglomerate listed on the Zimbabwe Stock Exchange (ZSE) and has three operating divisions as follows:

1. CFI Holdings is a conglomerate listed on the Zimbabwe Stock Exchange (ZSE) and has three operating divisions as follows: NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY FACULTY OF COMMERCE DEPARTMENT OF FINANCE BACHELOR OF COMMERCE HONOURS DEGREE IN FINANCE PART II 2 ND SEMESTER FINAL EXAMINATION MAY 2005 CORPORATE FINANCE

More information

Scenic Video Transcript Direct Cash Flow Statements Topics. Introduction. Purpose of cash flow statements. Level 1 analysis: major categories

Scenic Video Transcript Direct Cash Flow Statements Topics. Introduction. Purpose of cash flow statements. Level 1 analysis: major categories Cash Flow Statements» What Do I See?» Direct Cash Flow Statements» Scenic Video http://www.navigatingaccounting.com/video/scenic-direct-cash-flow-statements Scenic Video Transcript Direct Cash Flow Statements

More information

Managerial Accounting Prof. Dr. Varadraj Bapat Department of School of Management Indian Institute of Technology, Bombay

Managerial Accounting Prof. Dr. Varadraj Bapat Department of School of Management Indian Institute of Technology, Bombay Managerial Accounting Prof. Dr. Varadraj Bapat Department of School of Management Indian Institute of Technology, Bombay Lecture - 18 Financial Statements Analysis Dabur India Case Dear students, in last

More information

HHIF Lecture Series: Discounted Cash Flow Model

HHIF Lecture Series: Discounted Cash Flow Model HHIF Lecture Series: Discounted Cash Flow Model Alexander Remorov University of Toronto November 19, 2010 Alexander Remorov (University of Toronto) HHIF Lecture Series: Discounted Cash Flow Model 1 / 18

More information

Education & Training Plan Finance Professional Certificate Program with Externship

Education & Training Plan Finance Professional Certificate Program with Externship Student Full Name: University of Texas at El Paso Professional and Public Programs 500 W. University Kelly Hall Ste. 212 & 214 El Paso, TX 79968 http://www.ppp.utep.edu/ Contact: Sylvia Monsisvais 915-747-7578

More information

Financial Modeling & Corporate Valuations

Financial Modeling & Corporate Valuations Financial Modeling & Corporate Valuations Presented by Affan Sajjad ACA Cell # 03219400788 Presenter Profile Passed CA exams in December 2004 Became Associate Member of ICAP in November 2005 Completed

More information

BF 6701 : Financial Management Comprehensive Examination Guideline

BF 6701 : Financial Management Comprehensive Examination Guideline BF 6701 : Financial Management Comprehensive Examination Guideline 1) There will be 5 essay questions and 5 calculation questions to be completed in 1-hour exam. 2) The topics included in those essay and

More information

MW: Email: xyz@email.wcu.edu

MW: Email: xyz@email.wcu.edu MBA 637 Financial management & Valuation (3 hrs) Western Carolina University Syllabus, Spring 20xx MBA 637, Syllabus, Fall 20xx, P a g e 1 Meeting Room: 0xx Karpen Hall, UNCA Instructor Information: Meeting

More information

STUDY MANUAL. Foundation level. Business Finance

STUDY MANUAL. Foundation level. Business Finance STUDY MANUAL Foundation level Business Finance 2012 Second edition January 2012 First edition 2010 ISBN 9781 4453 8014 8 Previous ISBN 9780 7517 8154 0 British Library Cataloguing-in-Publication Data A

More information

Anytime Adviser New Car Buying Coach

Anytime Adviser New Car Buying Coach Anytime Adviser New Car Buying Coach Welcome. This interactive guide offers you strategies for getting the best deal on a new car. Let's begin. Interested in a little guidance to negotiate your best deal

More information

Finance for Management and Organizational Studies MOS3310A COURSE DESCRIPTION TEACHING MATERIALS INSTRUCTOR CLASSROOM OFFICE HOURS EVALUATION TOPICS

Finance for Management and Organizational Studies MOS3310A COURSE DESCRIPTION TEACHING MATERIALS INSTRUCTOR CLASSROOM OFFICE HOURS EVALUATION TOPICS Finance for MOS3310A Course Outline: Summer 2011 COURSE DESCRIPTION The concepts developed in MOS3310 form the foundation for all elective finance courses. The main topics include: 1) an overview of managerial

More information

RELEVANT TO ACCA QUALIFICATION PAPER F9

RELEVANT TO ACCA QUALIFICATION PAPER F9 RELEVANT TO ACCA QUALIFICATION PAPER F9 Analysing the suitability of financing alternatives The requirement to analyse suitable financing alternatives for a company has been common in Paper F9 over the

More information

WJEC Applied Business A level. ABUS 1 and ABUS 5

WJEC Applied Business A level. ABUS 1 and ABUS 5 1 WJEC Applied Business A level ABUS 1 and ABUS 5 Additional information: formulae, layout and terminology ABUS 1 and ABUS 5 Accounting terminology A number of the terms used in Accounting are changing,

More information

Monika Goel Online Classes FINANCIAL, TREASURY AND FOREX MANAGEMENT Module II (C.S Professional Course)

Monika Goel Online Classes FINANCIAL, TREASURY AND FOREX MANAGEMENT Module II (C.S Professional Course) Monika Goel Online Classes FINANCIAL, TREASURY AND FOREX MANAGEMENT Module II (C.S Professional Course) Session Plan Day Date Time Topics- to be covered 14 h July, Nature and Scope of Financial Management

More information

Corporate Finance: Final Exam

Corporate Finance: Final Exam Corporate Finance: Final Exam Answer all questions and show necessary work. Please be brief. This is an open books, open notes exam. For partial credit, when discounting, please show the discount rate

More information

Discount rates for project appraisal

Discount rates for project appraisal Discount rates for project appraisal We know that we have to discount cash flows in order to value projects We can identify the cash flows BUT What discount rate should we use? 1 The Discount Rate and

More information

SAMPLE FACT EXAM (You must score 70% to successfully clear FACT)

SAMPLE FACT EXAM (You must score 70% to successfully clear FACT) SAMPLE FACT EXAM (You must score 70% to successfully clear FACT) 1. What is the present value (PV) of $100,000 received five years from now, assuming the interest rate is 8% per year? a. $600,000.00 b.

More information

HANDBOOK OF CORPORATE FINANCE

HANDBOOK OF CORPORATE FINANCE HANDBOOK OF CORPORATE FINANCE A business companion to financial markets, decisions & techniques 2nd edition Glen Arnold Financial Times Prentice Hall is an imprint of Harlow, England London New York Boston

More information

Course Finance Number/Section EMBA 807 March 7, 8, 21, 22; April 11, Semester/Year Spring 2014

Course Finance Number/Section EMBA 807 March 7, 8, 21, 22; April 11, Semester/Year Spring 2014 Course Finance Number/Section EMBA 807 March 7, 8, 21, 22; April 11, Semester/Year Spring 2014 Schedule 12; May 2, 3 Reena Aggarwal, Robert E. McDonough Professor of Business Administration and Instructor

More information

The City University of New York, College of Technology

The City University of New York, College of Technology The City University of New York, College of Technology Department of Business Managerial Finance (BUS 2340-2048) Prof. A. Zissu, Chairperson Prof. L. Bernard Spring 2013 Class Meets: Thursdays (6:00 PM

More information

Certificate in Business Valuation

Certificate in Business Valuation Certificate in Business Valuation Duration: 6 Months Distance Learning Programme Language: English RICS Member: 895.00 + VAT Non RICS Member 995.00 + VAT Course Summary Learn to apply financial and economic

More information

TERM LOAN AND WORKING CAPITAL. Seminar on Term Loan and Working Capital - December, 2010.

TERM LOAN AND WORKING CAPITAL. Seminar on Term Loan and Working Capital - December, 2010. TERM LOAN AND WORKING CAPITAL -STRATEGIES 1 INVESTMENT AND FINANCE POLICY 2 INVESTMENT POLICY Investment Policy selects an optimum portfolio of investment opportunities that maximize anticipated net cash

More information

CHAPTER 8 CAPITAL BUDGETING DECISIONS

CHAPTER 8 CAPITAL BUDGETING DECISIONS CHAPTER 8 CAPITAL BUDGETING DECISIONS Q1. What is capital budgeting? Why is it significant for a firm? A1 A capital budgeting decision may be defined as the firm s decision to invest its current funds

More information

Paper F9. Financial Management. Thursday 10 June 2010. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants

Paper F9. Financial Management. Thursday 10 June 2010. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants Fundamentals Level Skills Module Financial Management Thursday 10 June 2010 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Formulae

More information

Guidance on Accounting Elements

Guidance on Accounting Elements Guidance on Accounting Elements OCR GCE in Business Studies August 2012 The following guidance has been prepared in order to assist centres in the preparation of their candidates for the accounting elements

More information

DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO. Financial Pillar. 20 November 2014 Thursday Morning Session

DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO. Financial Pillar. 20 November 2014 Thursday Morning Session DO NOT OPEN THIS QUESTION PAPER UNTIL YOU ARE TOLD TO DO SO. Financial Pillar F3 Financial Strategy 20 November 2014 Thursday Morning Session Instructions to candidates You are allowed three hours to answer

More information

Paper P1 Performance Operations Post Exam Guide March 2011 Exam. General Comments

Paper P1 Performance Operations Post Exam Guide March 2011 Exam. General Comments General Comments Performance overall in March 2011 was comparable to the September 2010 diet. While the pass rate was acceptable, it could have been significantly improved if candidates had worked through

More information

Last update: December 19, 2013. Global Master of Finance Dual Degree Course Descriptions. Foundation Courses. FIN B62 510. Introduction to Finance

Last update: December 19, 2013. Global Master of Finance Dual Degree Course Descriptions. Foundation Courses. FIN B62 510. Introduction to Finance Last update: December 19, 2013 Global Master of Finance Dual Degree Course Descriptions Foundation Courses FIN B62 510. Introduction to Finance The main topics to be covered in this course are (1) principles

More information

Capital Structure II

Capital Structure II Capital Structure II Introduction In the previous lecture we introduced the subject of capital gearing. Gearing occurs when a company is financed partly through fixed return finance (e.g. loans, loan stock

More information

WHAT IS CAPITAL BUDGETING?

WHAT IS CAPITAL BUDGETING? WHAT IS CAPITAL BUDGETING? Capital budgeting is a required managerial tool. One duty of a financial manager is to choose investments with satisfactory cash flows and rates of return. Therefore, a financial

More information

UNIVERSITY OF WAH Department of Management Sciences

UNIVERSITY OF WAH Department of Management Sciences BBA-330: FINANCIAL MANAGEMENT UNIVERSITY OF WAH COURSE DESCRIPTION/OBJECTIVES The module aims at building competence in corporate finance further by extending the coverage in Business Finance module to

More information

Most publicly limited companies (PLCs) will use a number of different sources of finance including:

Most publicly limited companies (PLCs) will use a number of different sources of finance including: Weighted Average Cost of Capital (WACC) Article by Bernard Vallely, FCCA, MBA, Current Examiner. RELEVANT TO : P1 Managerial Finance P2 Financial Management (Transitional Students) P2 Strategic Corporate

More information

The Institute of Chartered Accountants of India

The Institute of Chartered Accountants of India PAPER 2: STRATEGIC FINANCIAL MANAGEMENT QUESTIONS Sensitivity Analysis 1. Unnat Ltd. is considering investing ` 50,00,000 in a new machine. The expected life of machine is five years and has no scrap value.

More information

Financing Your Dream: A Presentation at the Youth Business Linkage Forum (#EAWY2014) Akin Oyebode Head SME Banking, Stanbic IBTC Bank, Nigeria.

Financing Your Dream: A Presentation at the Youth Business Linkage Forum (#EAWY2014) Akin Oyebode Head SME Banking, Stanbic IBTC Bank, Nigeria. Financing Your Dream: A Presentation at the Youth Business Linkage Forum (#EAWY2014) Akin Oyebode Head SME Banking, Stanbic IBTC Bank, Nigeria. Content 1 Introduction 2 Profit and loss Account or Income

More information

Leverage. FINANCE 350 Global Financial Management. Professor Alon Brav Fuqua School of Business Duke University. Overview

Leverage. FINANCE 350 Global Financial Management. Professor Alon Brav Fuqua School of Business Duke University. Overview Leverage FINANCE 35 Global Financial Management Professor Alon Brav Fuqua School of Business Duke University Overview Capital Structure does not matter! Modigliani & Miller propositions Implications for

More information

Things to Absorb, Read, and Do

Things to Absorb, Read, and Do Things to Absorb, Read, and Do Things to absorb - Everything, plus remember some material from previous chapters. This chapter applies Chapter s 6, 7, and 12, Risk and Return concepts to the market value

More information

INTERVIEWS - FINANCIAL MODELING

INTERVIEWS - FINANCIAL MODELING 420 W. 118th Street, Room 420 New York, NY 10027 P: 212-854-4613 F: 212-854-6190 www.sipa.columbia.edu/ocs INTERVIEWS - FINANCIAL MODELING Basic valuation concepts are among the most popular technical

More information

BPA434: ADVANCED TOPICS IN CORPORATE FINANCE COURSE OUTLINE

BPA434: ADVANCED TOPICS IN CORPORATE FINANCE COURSE OUTLINE BPA434: ADVANCED TOPICS IN CORPORATE FINANCE Lynda Livingston Fall, 2012 office: McIntyre 111-J e-mail: llivingston@ups.edu office phone: (253) 879-3471 fax: (253) 878-3156 office hours: MF 12:00-1:00

More information

Return on Equity has three ratio components. The three ratios that make up Return on Equity are:

Return on Equity has three ratio components. The three ratios that make up Return on Equity are: Evaluating Financial Performance Chapter 1 Return on Equity Why Use Ratios? It has been said that you must measure what you expect to manage and accomplish. Without measurement, you have no reference to

More information