All Matches

Solution Library

Expert Answer

Textbooks

Search Textbook questions, tutors and Books

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Tutors
Study Help
Ask a Question
AI Study Help New

Search
Sign In
Register

study help
business
international financial management

Questions and Answers of International Financial Management

Given the data below (which are illustrative not actual) you are required to (1) compute the expected rate of return for each of the following securities using the CAPM and (2) calculate the
Granada Diageo 1.36 0.20 0.88 0.20 The risk-free rate of return is 6 per cent and the expected return from the market is 17 per cent.
1 (a) Distinguish between systematic and unsystematic risk, (b) Which is often regarded as the only relevant risk and why?
2 (a) How would you define beta? (b) Distinguish between an aggressive and a defensive share, (c) How are betas determined and where can they be obtained? (d)What are the limitations of betas?
3 (a) What is the security market line (SML)? (b) What factors cause the SML to shift?
4 How does the capital asset pricing model (CAPM) apply to the firm investing in corporate or real assets?
5 Briefly outline the key underlying assumptions of the CAPM.
6 The Capital Asset Pricing Model (CAPM). As financial manager of North West Enterprises you are required, using the capital asset pricing model (CAPM), to calculate the required rate of return and
7 The Capital Asset Pricing Model (CAPM). Using the capital asset pricing model(CAPM) equation calculate the following:(a) The required return on share A, R(rA), if the risk-free rate Rf is 5 per
8 The Security Market Line (SML). Wendy James owns a portfolio consisting of the following five shares (the data is illustrative not actual):Share Weighting, Wi Beta, βs Expected Return,
9 Risk Analysis. You are the company accountant with a medium-sized, privately owned company. The company has surplus funds which it does not believe it will be able to invest in company operations
‘If we hold a portfolio of stocks, we need only consider the systematic risk of the securities.’‘As a cautious investor we must always consider total risk.’‘We should not buy anything if
1 understand the meaning of value;
2 explain the factors which determine an asset’s value;
3 apply the basic valuation model to determine the value of a bond;
4 apply the dividend valuation model (DVM) to determine the value of ordinary shares;
5 understand and apply asset, earnings, and cash flow-based valuation methods;
6 appreciate the strengths and limitations of the various approaches to asset valuation;
7 appreciate how financial decisions impact on the firm’s value; and
8 explain Market Value Added (MVA) and Economic Value Added (EVA).
As a trainee accountant in a firm of accountants you have been asked, using the fundamental valuation model, to value the following assets which are owned by one of the firm’s clients.In the first
1. Shares in a number of leading ‘blue-chip’ companies from which your client expects to receive annual dividends totalling £1,000 per year indefinitely.
2. A holiday cottage which according to two different professional valuation agents is estimated to be worth either £80,000 or£120,000 in five years time. Your client considers these valuations to
How do you think the WeatherAll Engineering bond’s value would be affected if at the same five-year stage other similar risk securities were yielding a return of 14 per cent? Think about this for a
Calculate, using the yield approximation formula, the yield to maturity (YTM) on a £100 par value bond with a 9 per cent coupon, 10 years to maturity, and which is currently trading at £108.
Prestige Packaging expects to pay a constant annual dividend of£0.35 per share indefinitely. If investors currently require a share of equal risk to earn a return of 15 per cent, calculate the value
Prestige Packaging has paid the annual dividends per share as set out below. The company’s directors expect that the past dividend growth rate will also be maintained at a constant rate in the
1 (a) Define the fundamental valuation model (FVM). (b) Why should the financial manager be concerned with the valuation process?
2 Define, compare and contrast the following terms:Book value: Market value: Intrinsic value: Liquidation value.
3 Explain the following: (a) the relationship between a bond’s value and the required rate of return; (b) how the value of a bond changes in relation to its time to maturity;and (c) why you might
4 Discuss the limitations of valuation models.
5 Explain the connection, in terms of risk and return, between financial decisionmaking and the value of the firm.
6 (a) Briefly explain each of the following terms:(i) Shareholder Value Analysis (SVA)(ii) Market Value Added (MVA)(iii) Economic Value Added (EVA)(b) How do Market Value Added (MVA) and Economic
7 Asset Valuation—General. Your client is considering purchasing an asset which is expected to return a cash flow of £1,250 at the end of each year for the next five years. At the end of year five
8 Bond Valuation. MacIntyre Industries issued a £100 par value 20 year bond with a 10 per cent coupon five years ago.(a) Assuming annual interest payments, what is the value of the bond today if the
9 Preference Share Valuation. MacIntyre Industries has preference shares at a nominal value of £2.00 on which it pays an annual dividend of 8 per cent. If investors holding similar risk shares
10 Equity Share Valuation, (a) The Sci-Fi Entertainment Company currently pays a dividend on its ordinary shares of £0.12 per share. The required rate of return in the market on such shares is 9 per
11 Equity Share Valuation—P/E Ratio. (a) Calculate the market value of equity in the following companies using the price/earnings (P/E) multiple:Company No. of ordinary shares in issue Earnings
12 (a) Dividend Growth Rate Calculation. Set out below is the dividend per ordinary share paid by Airtours plc, a major holiday tour operator quoted on the London Stock Exchange, for the years 1992
13 Equity Share Valuation—Various Methods. CDC Ltd owns a chain of tyre and exhaust fitting garages in the West of England. The company has been approached by ATD plc, which owns a large chain of
The current resale values of the remaining assets are considered to be in line with their book values.A company which is listed on the Stock Exchange and which is in the same business as CDC Ltd has
Assume a standard rate of income tax of 25 per cent. (Hint: multiply the DPS by a factor of 100/75 to give the gross DPS).Required:(a) Calculate the value of a share in CDC Ltd using the following
1 Determine the annual and average compound growth rate in dividends per share over the past five years. Does the growth rate conform to the constant growth rate model? How does the company’s
2 Check if the company has preference shares. How is the preference dividend calculated?
3 Determine the relevant EPS and P/E ratios. How do they compare with other companies in the same business sector and with the averages for the sector overall?
4 Determine the value of the company’s ordinary share using the net assets and P/E ratio methods. Can you obtain forecast or forward EPS and P/E ratios? If so, calculate the share value using the
5 Compare and contrast your findings with the current share value quoted in the financial media. Can you explain any variations?Do you consider the share to be a worthwhile investment? Give your
6 Do the reports give details on executive incentive schemes? Are they linked to the creation of shareholder value?Keep your report and analysis for future reference.
1 Calculate the current value of the company’s share.
2 The Board of Carlson has just announced that the company has achieved a breakthrough in its therapeutic drug technologies for some of the major forms of cancer. This medical advance, which it has
3 Suppose that investors perceive an increased risk element in the firm, as a result of the new technology, which causes the firm’s beta to increase to 1.50. If the risk-free rate, Rf, and the
4 It is unlikely that an investment decision would have an effect exclusively on either the firm’s risk or its return, more likely both aspects will be affected simultaneously. Recalculate the
5 Comment on your findings. Include comments on how accurate you consider your valuations to be, and identify what factors could possibly be the cause of significant errors in your valuations.
1 understand the nature and role of financial analysis;
2 understand and apply the tools and techniques of financial analysis;
3 recognise the limitations of financial analysis;
4 appreciate the process of corporate failure;
5 recognise the special financial conditions of overtrading and undertrading.
1 Specify the appropriate unit or model for measurement. This involves a definition of what precisely it is we are trying to measure: is it the performance of an individual manager? The performance
2 Specify a relevant and appropriate performance measure. This involves a clear definition of how the performance of the chosen unit or model is going to be measured: what is the most appropriate
For practice you should now attempt to complete the profitability analysis of Bio-Tech by calculating the same range of profitability ratios for 19×9. Where relevant, assume the market price of
You should now attempt to complete the analysis of Bio-Tech’s operational efficiency by calculating the same range of efficiency ratios for 19×9. As before, keep your answers for use later.
For practice you should now attempt to complete the analysis of Bio-Tech’s capital structure by calculating the same range of efficiency ratios for 19×9.
You should now complete the analysis of Bio-Tech’s financial performance and financial condition by setting out the complete range of financial ratios for 19×9 and then comparing them with the
For practice you should now apply the pyramid approach to the analysis of Bio-Tech’s financial statements for 19×9. Compare and interpret your findings.
Discuss the limitations and other considerations which might apply to your financial ratio analysis of Bio-Tech’s financial performance and condition over the two years 19×8 and 19×9. A
Calculate Altman’s ‘Z’ scores for Bio-Tech for 19×8 and 19×9.Compare and interpret your findings.
1 (a) How would you define financial analysis? (b) In relation to financial analysis,who are the interested parties? (c) In financial analysis how might the perspectives of these interested parties
2 A general framework for financial analysis can be constructed around four key questions, what are they?
3 Briefly review the main limitations of financial ratio analysis.
4 Outline some of the major difficulties of performance measurement in:(a) profit-making service businesses; and(b) not-for-profit organisations.
5 What do you understand by the following terms: balanced scorecard; gearing;working capital; Z scores?
6 Financial Analysis. The financial statements of Ambitious Ventures for the year ended 31 December 19×9 are presented below.AMBITIOUS VENTURES PLC Profit and Loss Account for year ended 31 December
7 Financial Analysis. The summarised profit and loss accounts and balances sheets for Airtours Plc for the years 1993 to 1996 are presented below. Airtours is a leading leisure travel company with
8 Performance Indicators. The list below provides a selection of performance and progress indicators. These indicators are generally associated with the private sector.However, management of the
9 Corporate Failure.(a) Discuss the theories, or arguments, which suggest that financial analysis can be used to forecast the probability of a given firm’s failure, and(b) Explain why such an
1 Select five ratios which you consider appropriate to provide an essential financial analysis of your company over the past three years.
2 Draw a chart illustrating the trends in profitability and liquidity over the three-year period.
3 Discuss the financial performance and condition of your company over the three-year period. Can you explain any variations? Do the annual reports refer to any particular problems or future
4 How does the company’s EPS and P/E ratios compare with other companies in the same business sector and with the averages for the sector overall?
5 Do the company’s assets include intangibles such as brands, copyrights, patents and trademarks? Is the basis of valuation stated?
6 See if you can compute a ‘Z’ score for your company. What does it indicate?
1 calculate and interpret a selection of financial ratios which you consider will adequately reflect the company’s financial performance and condition, over the two-year period, in the areas of
2 discuss in your report any limitations of your financial analysis;
3 discuss any further information (financial and non-financial)which you think would be helpful to your analysis; and
4 suggest appropriate recommendations based on your analysis.
1 understand the nature of corporate investment decisions;
2 explain the investment appraisal process;
3 apply the main investment appraisal techniques;
4 recognise the limitations of the main investment appraisal techniques;
5 appreciate the influence of non-financial and intangible factors in investment decision-making.
Calculate the payback period for the following investment project.Initial investment £85,000 You will find the answer in Appendix B.Net cash flow (£):Year 1 12,000 Year 2 18,000 Year 3 26,000 Year
Calculate the accounting rate of return (ARR) for Turbocharge’s Machine B assuming a residual value of zero. Which investment would you recommend using the accounting rate of return (ARR)?Explain
Calculate the NPV for Machine B using the same discount rate.Compare your answer with the NPV for Machine A. Which investment would you select and why? Keep your answer, you will need it later.
Calculate the profitability index for Machine B. Compare your findings with Machine A and with the NPV result. Based on this information which investment would you select? Why? Keep your answer, you
Calculate the discounted payback for Machine B. As before compare your answer with that for Machine A and comment upon your findings.
Before proceeding you should now summarise all your answers for the various techniques for both investments. As the investments are mutually exclusive only one can be implemented. Take a few minutes
1 Use only incremental cash costs and cash benefits.
2 Use after-tax cash flows, not accounting profits.
3 Ignore sunk costs in cash flow calculations. Sunk costs are cash flows that have already been spent. For example, if a firm of specialist business consultants had been engaged by the firm to carry

Showing 700 - 800 of 3047

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Services

Sitemap
Fun
Definitions
Become Tutor
Study Help Categories
Recent Questions
Expert Questions

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Campus Ambassador

Secure Payment

Download Our App

© 2024 SolutionInn. All Rights Reserved