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University Degree: Finance
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There will always be a next crisis Crises continue to come, even with intense oversight exercised by the authorities. One reason is the natural tendency of government officials to fight the last battle, i.e., looking for systemic weaknesses unfolded by the most recent crisis. Reforms are necessary; however, we cannot stop tomorrow?s crises by looking backward. Flaws in the regulatory and supervisory apparatus will be exploited in the name of innovation. Managers of financial institutions are always on the lookout for the boundaries defined by the regulatory apparatus, and the more detailed are the rules, the more ingenious is the avoidance.
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The purpose of this report is to undertake a firm valuation for Woolworths, using discounted cash flow model and the relative valuation model.
of the firm = sum of the present value of each year?s free cash flow to equity + present value of terminal value P0 = t=n ? t =1 [FCFEt / (1 + ke, hg) t] + [FCFEn+1/ (ke, st - gst)]/ (1 + ke, hg) n 1. P0 = the firm?s current market value 2. ke, hg = cost of equity during high growth period 3. ke, st = cost of equity during stable growth period 4. gst = stable growth rate Reasons for the choice of FCFE: 1.
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This essay is to consider what roles have financial intermediaries played within the society and financial systems and discuss the impact on the financial market if there are no financial intermediaries
An individual investor could find borrowers on his own and pass the financial intermediary (Bencivenga, V and B Smith, 1991). By doing so, the investor could get a higher return. Why do financial intermediaries exit if investors can search counterparty himself? The essay will discuss the reasons below. Impact on transaction costs The transaction costs have been reduced significantly in recent years, which mainly due to the rapid growth of financial intermediaries (Diamond, D, 1984). Financial intermediaries generally take deposits and create loans.
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Consequently, the current account balance is highly dependent on the movements in exchange rate (Book, 2011). Another factor affecting the current account balance is the economic growth and as a result consumer spending (EconomicsHelp, 2012a). In a period of economic growth, the spending power augments, often resulting in higher spending on imports, except in the case of an export led economic growth, and thus provoking swings in the current account balance (EconomicsHelp, 2012a). On the other hand, in times of recession, consumer spending on imports would fall and leading to swings in the current account balance (EconomicsHelp, 2012a).
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The Great Depression & the GFC: Causes, Similarities and Differences The biggest lesson of the global financial crisis was that globalization is a major trend in the 21st century, which has made the world smaller and financial and capital markets ever more interconnected. Systematic dynamics need to be controlled, while central banks will have to learn how to respond to growing asset bubbles in an appropriate, professional and timely manner. Arner (2009) identified that one of the main underlying causes of the GFC of 2008 resulted from the trend of globalisation as domestic regulatory structures were unable to adjust to the rapidly changing realities of global finance.
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-The market movement however did not go in accordance to the scenario and the news, as such we have to make quick decision on what actions to take. *This section will be discussed in more detail in the following page. Individual Student Contribution Name of Student Number of Hours Total Percentage Contribution Imanuel Nugroho Wirajaya 8 33.3% Felix Gunawan 8 33.3% Weili Chen 8 33.3% TOTAL 24 100% Table of Contents 1. Pre-Trading Situation/Analysis???????????????????????????.??.5 1.1 Individual student job assignment and job description ????.????.??.5 1.2 Market view??.........????????????????????...?.?.5 1.3 Strategies for the dealing session and the reasons behind it ??????..?......6 1.4 Expected news events and their likely significance ???????????....7 1.5 Projected Turnover and Profit????????????.................????.7 1.6 Conclusion????????????????????????????8 2.
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Active Gear Inc. (AGI) is contemplating an acquisition of Mercury Athletic Footwear (MAF). To assess the situation properly, a discounted cash flow analysis is being carried out.
The risk premium was found by calculating the geometric mean of the annual S&P 500 returns (for the past 10 years), and subtracting the rf form this. Moreover, a tax rate of 38% was used throughout this analysis, as this would depict a true and fair view of the company, as it is today, not after the takeover. 38% was calculated by dividing the annual tax charges by earnings before interest and tax (EBIT), yielding 37.99% every year. The beta (?)
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The research was conducted in Meerut based on the research problem Analysis of different mutual funds schemes in Indian market
Generally however, longer the term, lesser the risk. Companies may default in payment of interest and principal on their debentures/bonds/deposits. While risk cannot be eliminated, skillful management can minimize risk. Mutual Funds help to reduce risk through diversification and professional management. The experience and expertise of Mutual Fund managers in selecting fundamentally sound securities and timing their purchases and sales help them to build a diversified portfolio that minimizes risk and maximizes returns. The research was conducted in Meerut based on the research problem ?Analysis of different mutual funds schemes in Indian market? .The objectives of the study are: Awareness of mutual funds in Indian market.
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My project title is COMPARATIVE STUDY OF HOME LOANS. I selected this topic because the Indian housing finance industry has grown by leaps and bounds in few years.
I am also thankful to all the respondents whose cooperation & support has helped me a lot in collecting necessary information. I would also like to thank almighty God for his blessings showered on me during the completion of project report. ________________ EXECUTIVE SUMMARY Home is a dream of a person that shows the quantity of efforts, sacrifices luxuries and above all gathering funds little by little to afford one?s dream. Home is one of the things that everyone wants to own.
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The disaster of Metallgesellschaft: How the misuse of derivatives brought the company to the brink of bankruptcy
More precisely, MGRM was selling/delivering petroleum (a total of 160 million barrels) to its customers every month for ten years at a price agreed on upon today (Diegemann 1). These transactions were forward contracts, because they were negotiated directly by the two parties (over-the-counter trade) and not traded on an exchange. In short, MGRM entered into short positions in long-term forward contracts with its customers. The customers were satisfied because this policy allowed them to eliminate some of their oil price risk. That is why at first, these forward contracts were very successful.
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The Authenticity Issue The first and the foremost issue that impedes the growth of Islamic Banking is the fact that there is widespread doubt and criticism regarding the authenticity of Islamic Banks. This can be summarized in just one question, which plagues the minds of those who are interested in the concept of Islamic Banking: Is Islamic Banking really Islamic? A variety of factors lead to this doubt. First of all, there is a huge divergence between the ideology and the practice of Islamic banking.
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Arundel Partners Case Study. Arundel Partners is offering a proposal to purchase the rights to movie sequels, before the original film is even made, in an attempt to secure the option to capitalize on profits potentially made from producing follow ups.
Therefore, time to maturity is estimated to be 1990 (t=1) since exercise of the sequel options occur then. The median sequel release date (not to be confused with exercise date) is 3 years after the first movie?s release and therefore can be expected in 1993 (t=3). Therefore, sequel rights purchased at t=1, on average, will not accrue revenue until 1994 (t=4). If the original movie did not produce impressive returns, Arundel Partners would reserve the right to not make a sequel at all or elect to abandon the sequel all together and sell the sequel rights to another studio for a highest bidder salvage fee.
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Lockheed Finance case Study. I recommend that the investment decision made by Lockheed to embark on the Tri Star program was unreasonable
But as per my analysis, the break-even at this level of the production was not attained. Despite industry analysts predicting 300 units as Lockheed?s break-even sales point, the net present value remained insufficient to cover costs at negative $274 million. Source Estimated Production Aircrafts (in units) Estimated cost per Aircraft (in $ million) NPV at r=10% (in $ million) Lockheed 210 14.00 (584) Lockheed 275 12.50 (312) Industry Analysts 300 12.50 (274) Actual Break-Even 400 11.75 42 Projection 500 11.00 441 I found that Tri-Star will have to produce roughly 400 aircrafts costing between $11.75 million to $12 million per unit to reach the break-even value.
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The basic goal of planning for any profit organization is to achieve maximum profit with limited resources. During the process choices must be made on how to allocate resources and model their costs
Then it is used to determine the profit-making capacity and decide whether the plan should proceed. Control As an interrelated process with planning, the control process also uses cost information to access performance and keeps cost in check as planned (Cagwin and Bouwman 2000). Cost information in control process also serve as input for better plans in the future. In today?s competitive market, a business?s profit-making capacity is steered by its efficiency of controlling. This is especially true for a manufacturing company where costs are sensitive to the overall profit. In order to maximise efficiency in the use of labor, materials, machines and plants, cost control is implemented.
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This trend is predicted to continue for at least a couple of years. Objective statement & Assumptions BC?s top management holds a vision of, ?a bright future for technology integration which aims to create a new generation of multi-functional personal appliances.? Our ultimate aim is to add value to the business and regain total market share in the near future for the corporation. As the company is being faced with the issues described above, it needs to evaluate projects which will best tackle the issue. This will be carried out using net present value calculations.
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