Essays on Gorden

Calculating cost of equity using Gorden Model:

In the first section of this paper, we will calculate the cost of equity of Nike Inc. using the Gorden Model as part of which, recent dividend payment will be used for estimating the cost of equity multiple. Followed are the calculations: Value of Stock: Current Dividend(1+Growth Rate)/ (Required Rate- Growth Rate) 58.02= 0.62/( Required Rate- 0.1209) = 13.15%

Here:

Growth Rate= Compounded Annual Growth Rate for past 5 years = (0.62/0.35)0.20- 1 = 12.09% Therefore, following Gorden Model, we found that the cost of equity for Nike Inc is 12.09%. However, because of the limitations of Gorden Model, ...

An Investigation in Private financial initiative (PFI) dilemma

Introduction:

The fundamental concept of Private financial initiative (PFI) is to create a partnership between public and private sector by financing public projects via private sector capital. In this practice, after founding public project by private sector, project leased back over a certain period of time to public sector (government), and private sector provides set of services associated with project such as maintenance. PFI initially introduced by British Conservative government in 1992 to found the modernization project of Britain public infrastructure such as roads, schools and hospitals. Nowadays, PFI practiced by several governments in different countries (e.g. United Kingdom, Australia, ...