Essays on Corporate Finance

Background

Being a small sized nation and also one lacking too much of natural resources, it was mandatory for Singapore to adopt a policy of open trade. The overall trade in Singapore currently amounts to thrice its GDP. Moreover, Singapore possesses absolutely no exchange controls either on the inflows or the outflows of foreign currency funds through its residents and non-residents. Despite the presence of stricter controls over the flows of domestic currency, there is no control that the nation has on its inflow and outflow. The country is known to be following an extremely liberal foreign direct investment (FDI) ...

Investment appraisal and efficient market hypothesis

PART A: Investment Appraisal

Determination of cash flows Calculation of NPV The NPV of the equipment is $298,352. The value is positive implying that the equipment is viable. Under the NPV criterion, a firm should accept an investment whose NPV is more than zero (Chandra, 2014). Therefore, Stream Stop Ltd. Torrent Flood Defences Plc should undertake the project.

Mistakes made within the original proposal

Appraisal technique: The Company made an error in the choice of the method of evaluating the investment. The return on investment uses the net profit in determining the worth of an investment (Röhrich, 2014). Investment analysis should be based ...

Introduction

Capital budgeting assists sports organisation in assessing the viability of their proposed long-term investments (Chandra, 2014). Sports organisations also need to invest in capital projects for expansion as well as to improve the efficiency of their operations. Extreme Sports Company operates a sports training complex with a fitness centre, motorsport cars for hire, among other services. The company has some money to invest in the expansion of either the fitness centre or the motorsport unit. This paper highlights how the company can use capital budgeting techniques to evaluate the two investment options.

Details of the two projects

The motorsport car will cost $200,000 ...

Sports organizations such as the department of sport and recreation (2016), Sask Sports Inc (2016), and Sport Nova Scotia (2016) are regularly preparing annual reports for each yearly operation. However, Sask (2016) and Nova Scotia (2016) are only presenting their statement of revenue and expenditure while the government of western Australia (2016) presented a full set of financial statements, which includes the statement of financial position. The financial position of the Australian department revealed that the sport organization has a smaller value for their total debt at only AUD$5.41m when compared to the equity of AUD$147.82m (Department, ...

Finance is a vast area of discussion that requires one's dedication and interest to understand it better. Under finance, there are major issues like corporate financial policy which has a lot to be studied. The corporate fiscal policy is defined as an innovative corporate finance course that mainly touches on equity and debt management, for example, the descriptions of types of debt and equity, distribution policy and security issuance, for instance, the design of capital structure and securities that controls information problems. The sub-topics in securities and financial policy can be discussed in details as below.

Debt and equity management.

Debt and equity ...

About the report

The objective of this report is to assist One-World Investment Consortium, who is planning to invest £150 million in Thomas Cook PLC, a British global travel company listed on the London Stock Exchange under the ticker sign of ‘TCG’. We duly understand the impact of our professional recommendation on Consortium’s final decision making related to investment, and therefore, we intend to be comprehensive in the approach our analysis. As for the structure of this report, it will be a two-part report. In the first section of the report, we will evaluate the past 5 year(2007-2011) financial performance ...

Stock statistics are calculated to develop an understanding of the level of volatility and stock appreciation for companies operating in Business Software and Services industry (Thomsett, 2015; Murphy, 1991). The companies chosen for the analysis include Microsoft Corporation, Oracle Corporation, Alphabet Inc., Apple Inc., and HP Inc. Microsoft Corporation is analyzed and compared with its competitors to identify the situation in the read sense.

Ranking in terms of Risk

Identifying the value for Beta carries out the risk analysis. It shows the degree of volatility of the stock with the industry (Ehrhardt & Brigham, 2008; Vishwanath, 2007). The analysis helps to reveal/draw the following rankings ...

“Diversification eliminates unique risk. But there is some risk that diversification cannot eliminate”

Diversification of portfolios is one of the effective ways to minimize the risks and increase the returns. However, it is acclaimed that there are certain risks that cannot be eliminated. These risks are called market risks that cannot be overcome through diversification of the portfolio. There are several theories that stress that the diversification of portfolios should be used to bring stability in its returns and lessen the risks. Systematic risks or market risk emerged because of the changes in the economic cycles of the market that are influenced by various factors and activities taken place in the economy ( ...

Abstract

A patient survey at a community hospital in which I serve as the chief financial officer indicated the need for a commercial 24-hour pharmacy within the hospital. The pharmacy would ensure that patients and families fill prescriptions and begin taking prescribed medicines as and when ordered instead of waiting for the following day. In response to the findings of the survey, this paper seeks to look into the viability of the business. Herein provided is the proposal for the first three months of operations. The paper also looks into the financial implications of the proposed project by looking into ...

Introduction

Graduating as a financial student is a significant achievement that guarantees an individual in the broad field of finance. However, financial professional needs to identify a suitable career option and assess which financial institutions have suitable opportunities for new professionals. This paper identifies financial career options that a new financial professional may pursue. The paper also describes the value that each career option adds to a company. Also, the paper identifies some of the important skills that would make a person eligible in each financial position.

Body

Describe two financial career options that a person with a finance education would ...

“The finance industry is multifaceted, offering a variety of positions catering to a number of different skills and interests” (Kochanek). Finance is a lucrative career option and includes several opportunities in the field of commercial banking, corporate finance, investment banking, mutual and hedge funds, financial planning, management consultancy, insurance, equity management, money management, real estate, valuation analysis and the like. The scope of the subject also includes the study of financial data and the analysis of financial determinants that affect the economic health of securities, companies, capital markets and countries alike. Job opportunities in the Commercial banking sector are ...

Abstract 2

Introduction . 3 Lessons from Capital Market History . 3 Return, Risk and the SML .. 5

Cost of Capital 7

Financial Leverage and Capital Structure Policy 9 Conclusion 11 Abstract This paper entails a critical analysis and discussion of the components of the corporate finance and its subsequent application in the contemporary business environment. The discussion and analyses contained in this paper are centered on the book by Ross, Westerfield and Jordan (2012) which is titled: “Fundamentals of Corporate Finance.” In this book, different aspects and components of this subject of corporate finance have been discussed in great depth and this paper essentially entails ...

In our world today, almost everything is in competitive zone. Most of the companies are struggling to build a sustainable and profit making customers relationship; This makes segmentation an important key to the effective client since it helps to optimize the investments in product development, market communications, and channel management. Retailers all over the world are begging to transform their relationships with their clients through providing Omni-channel shopping experience that enables the customers to leave the markets or shops satisfied. According to Tommy Hilfiger, Omni-channel approach allows customers to make their choices and purchases whatever they want. These clients ...

Corporate Activities:Alibaba Group

About the paper Corporate finance activities are now deeply embedded into the core business environment of any business entity. Be it for the quest for growth, additional capital or corporate governance, all such crucial decisions are related to the environment of corporate finance. To learn more about such business aspects, in this paper, we will discuss two corporate finance activities undertook by Alibabe Inc. These two activities are related to mergers and acquisitions and alteration to the capital structure of the company.

Mergers and Acquisitions: Alibaba to Invest $1 Billion in E-Commerce Startup Lazada

On 13th April, 2016, Chinese Internet giant Alibaba Group Holding Ltd. announced its biggest every overseas acquisition ...

Executive Summary

The paper discusses different topics related to the field of corporate finance and how the same will impact my future career, during which I plan to work as an equity investor. Beginning with the paper, I first discussed the importance of the financial statements and what information they reveal about the company. However,more than reading these financial statements, it is important that we learn how to study the financial statements using the tool of common-size statements and financial ratios as these tools help us in evaluating the trend in the financial standing of the company. Thereafter, I discussed ...

Evaluation of franchise investment

The franchise investment project is evaluated based on the net present value and the internal rate of returns. The available information is used to determine the NPV and IRR of Schneller Zug and Kyuko Densha. The two measures are used to assess whether each project is viable. NPV and IRR also help in choosing the better project between the two. NPV and IRR are determined using the cost of capital for Javelin Railway Co.

Determination of the cost of capital

The cost of capital is the return investors require from investment to secure funding. It is the minimum return projects must generate to be funded ...

BUSINESS FINANCING

Introduction Business owners and managers seeking financing encounters an essential decision regarding choice of whether to borrow money or to make use new equity capital. Given that equity and debts have very varied characteristics, each of them has different effect on cash-flow, earnings, and taxes as well as on balance sheet. They also have different impacts on any company`s dilution, leverage as well as a host for other financial metrics by which companies are measured. Lastly, each business financing options presents a different kind of relationship in relation to the financing source. Thus, a company`s plan on ...

Balance sheet

Intel Corporation’s balance sheet as at December 26th, 2015 indicates that it is financially stable. Its total assets increased in the last three financial years indicating that the company is growing. Further analysis shows that the current ratio of the firm as at December 26, 2015, was 2.576 implying that it had sufficient current assets to settle its current liabilities. This further indicates that Intel Corporation has a high liquidity. The current ratio increased from 1.732 in 2014 suggesting that the liquidity of Intel improved in 2015. Assessment of its long-term financial stability shows that the firm is ...

Abstract

Budgeting has always and continues to play a crucial role in business planning. That is given its application is estimation of the future performance parameters. With that, the discussion explains the relation between the profit planning and the budgeting process. For that, budgeting has been identified as the basis of the estimates used not only in profit planning but also in business planning. Also, several benefits have been identified regarding the business planning and budgeting including that they form the key reference for the performance evaluation. Further, the discussion explains the role of a controllers regarding the reporting to ...