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EADS is a company in aerospace industry that earns in euro but spends in dollar. This assignment is aimed to analyze its hedge situation and financial results thus make a decision for investment.
This led to nearly �1 billion (18.5/1.35-18.5/1.26=-1) decrease in EBIT from 2009 to 2010. An appreciation in euro against US dollar will make the financial result worse since after translation euro revenue will be less with the same amount of US revenue. On the other hand, the credit risk of its hedging counterparties is a problem deserves concerning. The company has witnessed a hedge rate deterioration as the unfavorable appreciation trend in euro against US dollar (registration document 2010:8). The non-performance of these counterparties will pressurize EADS to significant exchange rate risk again.
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Report on acquisition. This report is prepared to examine different offers proposed by the Alpha Plc to Delta Plc in acquisition of the target company. It is to analyze that which offer is most beneficial for acquiring company and vice versa and to recom
It is to analyze that which offer is most beneficial for acquiring company and vice versa and to recommend offers to be negotiated by each company. The report draws attention to the fact that each offer consist of different combination of offers including cash and stock. Each offer is valued to �360,000,000 but with different cost of acquisition of Delta Plc which is calculated later in this report. Calculations in this report to analyze offers includes Target shareholders' gain - (the premium), Acquirer's gain and The post-merger values of the combined companies.
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Report on acquisition case study. Methods of evaluation and analysis in this report include focusing benefits of different alternative offers proposed by Acquirer Company to Target Company to acquire in cheapest way.
Acquirer should issue Delta Plc shareholders 0.80 shares of Alpha Plc per share of Delta Plc stock. (b) Target company should negotiate to receive �12.00 per share for the shares of Delta Plc from Alpha Plc. The evaluation and analysis conducted in this report has limitations. Some of the limitations include: it is not mentioned that how many shares Alpha Plc is going to acquire from Delta Plc, in this report it is assumed that Alpha Plc se acquiring 100% shares. Financial performance figures in terms of Revenue, Gross Profit, Net Profit are not provided not the nature of company is known whether each company relates to same industry or not, it is assumed that both companies are in the same industry.
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The country that had the highest chance of default is Greece which was more than 50% of the probability. The likeliness of default was so high that S&P downgraded Greece debt to junk level. Therefore, Greece was seen as a very risky country to invest in. From these reasons above, Greece had to ask for the bailout in 2010 for the first time. Euro zone members and the IMF have agreed three year bailout package of 110bn-euro to rescue Greece's embattled economy2.
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Currency exchange is a common phenomenon in the business world and many big corporations and banks do it in large volume and frequently. This analysis has taken into consideration the historical data on interest rates, inflation rates, and exchange rates
In case of Japanese Yen, Feb 2000 witnessed the highest inflation rate of 3.352% with the interest rate of 3.6025% in March 2000. In case of USA dollar, Dec 99 witnessed the highest inflation rate of 4.2023% with the interest rate of 4.4934% in March 2000. However there were few exceptions which could be due to some other external factors. The underlying condition is of no government interference so there might be some disruptions of fluctuations on the part of the government which led to these exceptions. 3. How should BID analyze its effective borrowing costs over the period 1996-2005?
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Business Crime. Earnings Management or sometimes referred as creative accounting is most of the times ambiguous and many people tend to confuse it as misusing and manipulating the financial data so that managers can show better figures in the income shee
According to Ronen and Yaari(2008 p.25) "the different definitions of earnings management, classifying them as white, gray, or black. Beneficial (white) earnings management enhances the transparency of the reports; the pernicious (black) involves outright misrepresentation and fraud; the gray is manipulation of reports within the boundaries of compliance with bright-line standards, which could be either opportunistic or efficiency enhancing." Earnings Management or sometimes referred as creative accounting is most of the times ambiguous and many people tend to confuse it as misusing and manipulating the financial data so that managers can show better figures in the income sheet.
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Diversification of Assets. Explain how diversification of assets eliminates specific risk. Use a numeric example to illustrate your reasoning.
This attitude can be depicted on the diminishing marginal utility of wealth diagram, where the utility (u) from an added amount of wealth is far less than the decrease in utility from a reduction in wealth of the same amount. Source: Richard G Lipsey and K Alec Chrystal, 2007 This means investors look for the highest return possible for a given risk and look for the lowest risk for a given return. Also, they would not be interested in a risky investment offering the same rate of return as a higher investment; they'd want a higher return for a risky investment than that of a safe investment.
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Banking and the Economy- How do banks work and how do they make profit? What is a financial crisis and are they common?
3. What is a bank's liquidity ratio and why it is typically very low? Liquidity Ratio: Total Cash / Total Assets = �25 / �275 = 9.1% It is a percentage of assets kept as ready cash relative to total assets. There is no legal minimum for this ratio, but generally banks agree to keep about 2-3% of their assets in ready cash. The higher this ratio, the banks hold more cash and they do lesser spending. Thus, many banks have a profit incentive to see this ratio is kept as low as is possible.
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Research project. The levels of risk tolerance to financial stability of Malaysian banks rely on a variety of environmental risk factors that impact investment risk. It is through investment that banks have business and finance to regulate and synthesize,
One's risk tolerance is subjective and may vary according to age, needs, goals, and even personal dispositions. Malaysia's economic inter-linkages with other economies and enhance the role of the financial sector as a key enabler and catalyst of economic growth. (www.mida.gov.my en2/index.php/page=banking-system) Background of the problem Banks are the main financial players in any economy and therefore their success usually comes with success in the economic jurisdiction(s) that they operate. Banking sector success is normally reflected by a country's financial stability. The banks however are the direct financial enablers allowing the proper financial systems regulations and standards to be followed.
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Sealed Air Co. Case Study queestions. Why did Sealed Air undertake a leveraged recapitalization? Do you think that it was a good idea? For whom?
Competitors were selling them for a cheaper price. The company specifically face increasing competition in Europe as prior to the mid-1980s Sealed Air was unable to secure a strong position with patents and distributors that would allow them to take advantage of their innovative products for a much longer period of time. From employees' point of view, although in a short term it cut the expense for them, employee stock ownership was good in a long term. For investors and debt holders, it depends on the sensitive of risk.
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While there has been lot of study done in the US and European markets to understand how the recommendations of equity analysts have performed, we were not able to find any research paper pertaining to the Indian equity markets. Hence the focus of our stud
We have considered here the one year horizon recommendations which is the most common time frame used. This study should be of interest to both investors and the analyst research houses. From investor perspective, given the fact that there are many paid subscriptions to brokerage research houses, it will help them understand if their investments based on recommendations generate real value over time. Also by dissecting the type of stocks the analysts choose for making recommendations, we try to identify the inherent biases, which can be removed to aid in making better recommendations in terms of improved predictive returns. The plan of the paper is as follows: In Stage I, we focus on the data collection methodology.
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The case of Ben & Jerrys Homemade, Inc. focuses on how an organization manages to create value. The concern of the board focuses on Ben & Jerrys mission and sense of social responsibility. The stockholders have bought into a company that has a lon
It is a balancing act of all stakeholder interests. Clientele Effect The concept of the clientele effect states that people invest in companies according to the similarities in their preferences and policies. For example, those investors who are environmentally conscious tend to invest in companies that are environmentally responsible such as Ben & Jerry's, Patagonia, Odwalla and The Body Shop. Therefore, if these companies changed their policies to cut back in their environmental philanthropies, investors would sell their stocks and refocus their investments toward other green stocks.
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Prudential Plc. The aim of this paper is to make a research of an annual report of the company, together with the market research and to try to advise the directions for short and long-term periods towards the financing of foreign operations and foreign i
We provide a comprehensive range of savings, protection and investment products that are specifically designed to meet the needs of customers in each of our local markets. Prudential's asset management business in Asia has retail operations in 10 markets and independently manages assets on behalf of a wide range of retail and institutional investors across the region. Jackson National Life Insurance Company Jackson is one of the largest life insurance companies in the US, providing retirement savings and income solutions to more than 2.8 million customers.
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However, by the end of 1986 Kraft had returned to a food-focused strategy. Philip Morris is a company that has had huge success in the tobacco industry. Most of Philip Morris' income comes from its Marlboro, Benson & Hedges, and Virginia Slim cigarette brands. Though tobacco sales have increased by 15 percent in 1987, Philip Morris has been aiming to diversify away from tobacco products, as evident through their acquisition of Miller Brewing Company in 1969, as well as their acquisition of Seven-Up and General Foods in 1978 and 1985 respectively.
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M1 and M2 monthly historical data and Growth rate computation Table 1: M1 and M2 growth rates (2005-2010 monthly) Date M1: Currency, traveler's checks, demand deposits and other checkable deposits M1 GROWTH RATE M2: M1 plus retail MMMFs,savings, and small time deposits M2 GROWTH RATE Dec 2004 1401,0 6437,9 Jan 2005 1361,1 -2,85% 6394,9 -0,67% Feb 2005 1354,6 -0,48% 6395,0 0,00% Mar 2005 1381,4 1,98% 6455,6 0,95% Apr 2005 1368,9 -0,90% 6500,1 0,69% May 2005 1369,0 0,01% 6449,3 -0,78% Jun 2005 1383,9 1,09% 6501,9 0,82% Jul 2005 1364,9 -1,37% 6521,7 0,30% Aug 2005 1376,4 0,84% 6544,9 0,36% Sep 2005
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McNeil (1997-8) interrogates, using the Extreme Value Theory, estimation of severe risks in financial time series. Embrechts (1999) indicates the sturdiness of the Extreme Risk Theory in risk estimation. Pictet et al (1998) and Mullar et al (1998) use GARCH models to study financial risks in foreign exchange markets. Giot and Laurent (2003) use some parametric multivariate ARCH models which have skewed Student distribution to model VaR. GDP uses common probability density functions, for example, Log-Gamma, Student-t, Cauchy and Pareto distributions, to parameterize tails of share prices. This makes the model flexible and easily manipulable. Existing literature on is scanty on the number of observations present at the tail of distributions of stock price.
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In other words, the companies have a free choice about what mix of the capital they want to go for. Furthermore, M&M theorem also states that the capital structure of a firm is irrelevant to the shareholders of the firm. Nor the value of a company or the cost of capital will be changed by altering the capital structure of company. Fundamentally, a company manager should put more attention on other important matters such as where the firm's funds should be invested and what investments should be made.
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Through its operations, Vodafone is deeply committed in improving its operations constantly and through this improving the shareholder's value. The firm is known to review its financial standings year after year and through this, the firm is abler to review its long term profitability and growth objectives. The goal behind this is to provide its customers and general stakeholders with reliability, consistency and services and products that are above average The firm is aiming at arriving at solutions that will solve a number of problems encountered by customers as they move from their homes to their places of work that bundle data, messaging, voice and an increase in line services that will enable them to meet their varying needs.
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Kurdistan Hopes Boost Gulf Keystone. This case study is concerned with the stock markets reaction to the RNS statements released by Gulf Keystone Petroleum regarding oil drilling prospects in March 2011
After this news was announced the share price rose that day by 12.1%, opening at 141p and closing at 158.04p. On the 21st of March the share price rose again by a further 4.8% opening at 166.5p and reaching a high of 192.95p and finally closing at 174.21p. The actual results of testing were released on the 22nd of March at 07.00 am GMT, revealing that the appraisal well housing the discovery was currently achieving short term, indicated rates of 10,144 barrels of oil per day.
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They can be hotel rooms, resorts, apartments in tourist area and the most high-grade form is villas. The special feature of this trading type is that the buyers can exchange the right to use their properties among timeshare owners. It means if the buyers find it bored to stay in the same place every year, they can register to visit and live in others' apartments and other people will use their properties in return. It helps people travel all around the world more easily and economically. 2. Fairview Manor Fairview Manor is a new timeshare and leisure complex which is developed by Universal Marketing PLC - a company works in the field of international timeshare marketing.
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E/V is calculated by taking the shareholder's equity and divides it by the sum of equity and debt from the most recent financial statement as of September 30, 1995. The reason behind this is that both values are recent and reflect current capital structure of the company. However, an interesting note is that the debt on the balance sheet does not reflect the current market value of the debt, using this value may have some exogenous effect on the final outcome.
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However DLF mitigates those risks by exposing itself to various categories of construction business like infrastructure, SEZ and hotel business. Development Business Development business is the primary business of DLF. It can be divided into two categories Residential and Commercial. Residential properties are divided into further 3 categories depending upon facilities offered viz. Super Luxury, Luxury and Mid-Income. DLF offers wide options in their residential business like Condominiums, duplexes, row houses and apartments. Commercial properties are developed by DLF across India.
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Priority of Merlin Entertainment Group is delivery of memorable experiences to their millions of visitors constantly monitored visitor satisfaction, they have developed strategy, and the very high customer service and health and safety standards. This kind of location based entertainment, specifically tourist attractions, is dynamic, fast growing and fun. Merlin Group Entertainment is different and unique, in terms of its range of quality, branded businesses and its commercial success (Merlin Entertainments Group, 2010). Merlin Entertainment Group uses marketing concept ,which is easily, applicable to a leisure services such as an event to succeed in their goals.
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Cooper Industries Case Study. Cooper Industries was also looking to acquire Nicholson File Company, due to recent vulnerability, but being an overall strong company. The vulnerabilities were a reflection of conservative accounting and financial policies,
Cooper would only acquire leading companies in their respected markets. Cooper used their newly implemented strategy to acquire Lufkin Rule Company in 1967. Then in 1969, Cooper acquired Crescent Niagara Cooperation. Cooper continued its quest to eliminate the cyclicality of their sales by Acquiring Weller Electric Cooperation in 1970. With the acquisition of these companies, Cooper gained significant market share in the hand tool market, as well as strong distribution and management teams. Issue at Hand Cooper Industries was also looking to acquire Nicholson File Company, due to recent vulnerability, but being an overall strong company.
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Finance case study -For the capital budgeting procedure, General Foods Accounting and Financial Manual identified four categories that capital investment project proposals; 1) safety and convenience, 2) quality, 3) increased profit, and 4) other. Supe
The $120,000 for machinery and equipment is based upon the packaging machinery. The powdered dessert was a significant and growing segment of the total dessert market according to Nielsen, as it was 25.3% of the market share. General Foods was in hope that Super would be able to capture 10% of the total dessert market. 80% of this expected Super volume would come from growth of the total market share or growth in the powders segment, while 20% would come from erosion of Jell-O's sales.
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