WE PROVIDE CASE STUDY ANSWERS, ASSIGNMENT SOLUTIONS, PROJECT REPORTS AND THESIS
ARAVIND - 09901366442 – 09902787224
CORPORATE FINANCE MANAGEMENT
Q.1) Give A brief On
Optimizing the Corporate Finance Function, The External
Business Environment and
Corporate Financial Strategy. The Strategic Logic of High Growth?
Q.2) Explain what is
Shareholder Value Maximization?
- Corporate Valuation
- Valuation Models: Public Company
- Valuation Models: Closely held
Company
- Corporate Performance Measurement:
Economic Value Added (EVA)
Q.3) Explain Financial
Policy with the help of the following points?
a) Capital Structure
b) Operating Leverage
c) Dividend Policy
d) Pricing Strategy
e) Tax Planning
f) Optimal Capital Budgeting
with real Options
g) Mergers and Acquisitions
Q.4) Give an introduction
to Risk Management include the following?
a) Identifying and Estimating
Risk Exposure
b) Off-Balance Sheet (OBS)
Risks
c) Operational Risk Management
d) Enterprise Wide Risk
Management (EWRM)
e) Risk Hedging Strategies
Q.5) what is Financial
Reporting, Planning and Control
a) Financial Reporting: GAAP
Convergence
b) Business and Financial
Planning
c) Treasury Management
d) Financial Control and Audit
e) Optimize amid Changing
Operating Conditions
Q.6) Corporate Performance
Management: The Balancing act?
a) The Execution Problem
b) The Balanced Scorecard
c) Real-time Financial
Systems: Corporate Performance Management (CPM)
d) Integrated Financial
Management
Q.7) How do we create and
measure shareholder value creation? Q.8) How do we manage financial risk?
Q.9) In what projects are we
going to invest our shareholders money (capex)?
Q.10) Why Profit
maximization is not the same as shareholder wealth maximization? Q.11) What
investments should we make?
Q.12) How do you know
whether an investment generates value for shareholders? Q.13) Described
Traditional appraisal techniques?
What businesses actually
use Payback
Accounting rate of return
Q.14) Explain The
managerial art of investment selection
o Strategy
o Social context
o Expense
o Stifling the entrepreneurial spirit
o Intangible benefits
Q.15) Explain The stages of
investment decisions ?
o Generation of ideas
o Development and classification
o Screening
o Appraisal
o Report and authorization
o Implementation
o Post completion audit
Q.16) Explain Allowing for
risk
What is risk?
Adjusting for risk through
the discount rate Sensitivity analysis
Scenario analysis
Probability analysis
Standard deviation
What risk techniques do
managers actually
Q.17) Explain Value managed
companies versus earnings managed companies
The pervasiveness of the
value approach
Case studies: FT100
companies creating value and destroying value Why shareholder value?
Earnings-based management’s
failings:
o Dicey accounting o
Throwing money in
o Ignoring the time value of money
Ignoring risk ROCE has
limitations
Focusing on earnings is not
the same as value How a business creates value
Q.18 ) Explain Strategic
position
Strategic business unit
management
Do we have any strong
business franchises? Industry attractiveness
The strength of our
resources The TRRACK system
The life cycle of value
potential Strategic choice
What use is the head
office?
Q.19) Explain Value
creation within strategic business units
Using cash flow to measure
value Shareholder value analysis
Economic profit
Economic value added (EVA)
Q.20) What is the companies
cost of capital?
The required rate of return
The cost of equity capital
o
The
capital asset pricing model
o
Gordon
growth model
o
The
cost of retained earnings Debt capital
Preference shares
The weighted average cost
of capital, WACC What the WACC tells you
Applying WACC to strategic
business units and projects What do managers actually do?
Implementation issues
o
How
large is the equity premium?
o Which risk free rate?
o
How
reliable are the CAPM and beta? Fundamental beta
Q.21) explain the below
Mergers: impulse, regret and success
The merger decision
You say merger, I say
acquisition Types of merger
Merger statistics
What drives firms to merge?
o Synergy
o Market power
o Economies of scale
- Internalization of transactions
o Entering new markets and industries
o Tax
o Risk diversification
o Bargain buying
o Inefficient management
o Managerial benefits
o Hubris
o Survival
o Free cash flow
o Third party motives
Q.22) Do the shareholders
of acquiring firms gain from mergers?
Q.23) What pay-outs should
we make to shareholders?
The other extreme
Some muddying factors
Clientele effects Taxation
Information conveyance
Agency effects
Scrip dividends
Share buy-backs and special
dividends
A round up of the arguments
CORPORATE FINANCE
CASE STUDY : 1
Reliance company has a $
1,000 face value convertible bond issue that is currently selling in the market
for $
950. Each bond is
exchangeable at any time for 25 shares of the company’s stock. The convertible
bond has a 7 percent coupon. Payable semi-annually. Similar non-convertible
bonds are priced to yield 10 percent.
The bond matures in 10
years stock in Reliance sells for $ 36 per share.
Q1) What are the conversion
ratio, conversion price, and conversion premium?
Q2) What is the straight
bond value?
Q3) What is the conversion
value?
Q4) What is the option
value of the bond?
CASE STUDY : 2
Suppose your company needs
$ 15 million to build a new assembly line. Your target debt equity ratio is 0.90.
The flotation cost for new equity is 8 percent, but the flotation cost for debt
is only 5%. Your boss has decided to fund the project by borrowing money
because the flotation costs are lower and the needed funds are relatively
small.
Q1) What do you think about
the rationale behind borrowing the entire amount?
Q2) What is your company’s
weighted average flotation cost, assuming all equity is raised externally?
Q3) What is the true cost
of building the new assembly line after taking flotation costs into account?
Q4) Does it matter in this
case that the entire amount is being raised from debt?
CASE STUDY : 3
ABC Co. & XYZ Co. are
identical firms in all respects except for their capital structure. ABC is all
equity financed with $ 800,000 in stock XYZ uses both stocks and perpetual
debt, its stock is worth $ 400,000 and the interest rate on its debt is 10 per
cent. Both firms expect EBIT to be $ 90000. Ignore taxes.
Q1) Rico owns $ 30,000
worth of XYZ’s stock. What rate of return is he expecting?
Q2) Show how Rico could
generate exactly the same cash flows and rate of return by investing in ABC and
using homemade leverage?
Q3) What is the cost of
equity for ABC? What is it for XYZ?
Q4) What is the WACC for
ABC? For XYZ? What principle have you illustrated?
CASE STUDY : 4
The Nike Company sells 3000
pairs of running shoes per month at a cash price of $88 per pair. The firm is considering
a new policy that involves 30 days credit and an increase in price to $ 90.72
per pair on credit sales. The cash price will remain at $ 88 and the new policy
is not expected to affect the quantity sold. The
discount period will be 20
days. The required return is 1 percent per month.
Q1) How would be the new
credit terms be quoted?
Q2) What investment is
receivables is required under the new policy?
Q3) Explain why the
variable cost of manufacturing the shoes is not relevant here?
Q4) If the default rate is anticipated
to be 10 per cent, should the switch be made? What is the break even credit
price
CORPORATE TRAINING MANAGEMENT
- Explain in detail “Training Design
Process”.
- If you had conduct needs
assessment for a new job at a new plant, describe the method you would
use.
- What learning condition do you
think is most necessary for learning to occur? Which is least critical?
Why?
- What is repurposing? How does it
affect use of new technologies in training?
- Discuss reasons why many managers
are reluctant to coach their employees.
- What are some potential legal
issues that a trainer should consider before deciding to run an adventure
learning program?
- How will you define “Career”?
- What are the three components of
career motivation? What is more important? What is least important? Why?
- Give an example of dual career
path system and explain it?
- What are the characteristics of an
effective dual career path?
WE PROVIDE CASE STUDY ANSWERS, ASSIGNMENT SOLUTIONS, PROJECT REPORTS AND THESIS
ARAVIND - 09901366442 – 09902787224
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