Corporate Finance Essays (Examples)

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Corporate Finance Tools in Daily Life
Many of the concepts associated with corporate finance also have applications in everyday life. A range of corporate finance tools are already used in everyday life, often without realization as corporate finance tools are often an extension of common financial practices. More complex corporate finance tools may also provide a great deal of potential to enhance daily life financial management. By looking at task associated with daily life it is possible to see the alignment.

A task undertaken in almost every household will be budgeting for household expenses, for example this will include budgeting for utility bills, insurance, food and travel. The budgeting may take place at different levels, for example, monthly or daily. The main budget will be undertaken each month, accounting for the essential items and liabilities. Where wages are paid on a monthly basis assessing outgoing in the same way is common sense.

Budgeting….

Corporate Finance
East Coast Yachts I

My time horizon is long-run. I would want a diversified portfolio, but can afford to take the risk of equities. So the first decision is to go with 1% equities. I am not interested in company stock at the moment, because I want a diversified portfolio and I only want liquid securities with values set by the market. The company stock does not meet those criteria.

In that case, I would emphasize the Small Cap fund for its growth characteristics -- 5%, and a further 5% in the S&P index fund. The Index Fund has a substantially lower MER than the Large Company fund. The Large Cap has outperformed the market lately, but cannot be expected to do that every year, and it has a lower Sharpe ratio so is a riskier fund that the S&P -- it should outperform. On a risk-adjusted basis, net of the….

Corporate Finance
Potential Impacts of an Increasing Interest Rates

Interest rates have a strong influence in the economy. his influence is one reason many central banks utilize interest rates as a monetary tool in an effort to control the supply of money. Since December 2008 the U.S. has seen some of the lowest central bank interest rates, with the Federal Reserve holding down rates in order to help stimulate economic growth. he Federal Reserve may have recently forecast interest rates remaining close to zero until some point in 2013, but at some point they will have to increase (Anonymous, 2011). When the interest rate rise does occur it will impact on a number of areas of the economy; this paper will consider some of those impacts.

Impact on the Financing of Big icket Items

Big ticket items are expensive goods which will often require the purchaser to obtain some type of credit agreement. If….

Corporate Finance
3a) This depends on the project. b) Better than the company or industry average, whichever is higher. C) Higher than the cost of capital. d) e) over 0.

The objection is based on speculation. Since we do not know what the future reinvestment rate is going to be, we must work with the best information we have today.

Again, the objection is the same. A complaint that we have less than perfect information when we are forecasting the future is absurd. We also do not know precisely what the future cash flows will be. We still need to make a decision, and that decision must therefore be made on the basis of the best information that we have today. The criticism has no validity.

Ch 9-1. Forecasting risk reflects the risk associated with forecasting future cash flows. There is more forecasting risk for a new product than for a cost-cutting proposal. This….

Corporate Finance
atio

Liquidity atios

Current ratio

Activity atios

Inventory turnover

Total asset turnover

Debt ratios

Debt ratio

Debt-to-equity ratio

Profitability ratios

eturn on common equity

eturn on total assets

DuPont Analysis

The DuPont equation, according to Besley and Brigham (), can be captured as follows: OE = Net Profit Margin * Total Assets Turnover

In a tabular form, this would be:

Net profit margin

Total assets turnover

OE

The current ratios of Jaedan Industries do not differ significantly from the industry ratios for the two years under consideration. According to Besley and Brigham (2007, p. 52), this particular ratio "provides the best single indicator of the extent to which the claims of short-term creditors are covered by assets that are expected to be converted to cash fairly quickly." Jaedan Industries' current ratios for the two years under consideration indicate that the firm would have no problem settling its short-term obligations if they were to become due. Next, we have the activity ratios, in which case the inventory turnover….

To include: Rangers, Special Forces, Delta Force, Special Air Service, Special oat Service and Navy SEALs. (Dunnigan, 2010) As a result, many people within the U.S. military and the government will often discuss the valuable services that these companies are providing. Where, private security contractors can bring a wide range of experience with them, in dealing with a host of possible security challenges that could be faced within a theater of operations.
However, the main reason why both government and military personal have such favorable views of private security contractors, is because they are professionals and are effective at achieving their objectives. What is happening, is the personnel that private security firms can introduce to a conflict, can help prevent a situation from going to bad to worse. Where, a possible insurgent or terrorist attack that could send most people running; will cause these individuals to remain at their positions.….

Corporate Finance
LN's Financial Plan

The firm, which was conceptualized in 1944 as MPRSA changed to ndesa, in the year 1997. In 2006-2007, both by nel in Italy and Gas natural targeted ndesa. .ON, located in Germany also had interest in ndesa. Despite its smaller size, Gas Natural had backup from the then socialist government. After .ON offered 38.75 pounds to ndesa for each share, they took over the company, among others like SNT. Acciona and nel jointly took over to control ndesa. nel however was the higher bidder, with a share of 67.05% of the entire share capital. In 2009, nel bought the shares of Acciona, assuming ownership with over 92% share capital. It was agreed that some of the assets owned by ndesa, would be sold to Acciona. According to Reuters (February, 21) The nel Corporation was to get funding from different banks, amounting to eight billion, which was to….


At first, it would seem that debt has more advantages than new equity. However, that is not always the case. The fact is that certain equilibrium between issuing debt and issuing equity has to be found. The cost of debt rises constantly, since the financial risk of a company grows together with the level of debt the company has to face. The cost of debt is the market interest rate that the firm has to pay on its borrowing and depends upon three components: the general level of interest rates, the default premium and the firm's tax rate. The cost of debt rises if the company has other debts, since the degree of risk a creditor takes increases. The company's beta indicator increases, so it does not have access to sources of financing as it once did. Therefore, issuing new equity becomes an interesting alternative.

What a company needs to do….

Additionally, alternative 2 provides the lowest coefficient of variation as well as the lowest standard deviation. The level of risk given the expected return is high and offers stability when compared to the other alternatives.
8-22

a. Stock B, stock A, stock C

b. If the market portfolio has a return of 12%, then stock a will realize a return of just below 12% or .096%. Stock b will have a return of 1.4 * 12% or .168%. Stock c will have a return of -.30 * 12% or -.036%

c. If the market portfolio has a negative return of 5%, then stock a will realize a return of -.04%. Stock b will realize a return of -.07%. Stock c will realize a return of -.015%

d. If the stock market were about to experience a decline, then the stock to add to the portfolio would be the stock with the lowest or negative….

orporate Finance
Analysts' independence refers to the ability of the analyst to publish opinions about the stocks they cover, free from corporate interference or oversight. In this pre-SOX example, analysts were under pressure from the investment banking arm of their parent company to run downgrades past management. The implication is that the analyst loses independence, that his or her views are going to be sterilized by senior management to avoid offending a current or potential future customer for some of the other services that the bank offers.

Maintaining a buy recommendation after a stock's price falls is not evidence that the analysts' independence is compromised. If the analyst thought the stock was undervalued before the drop, surely the analyst thinks the stock is still undervalued at the lower price point. The independence of an analyst cannot be judged on the basis of his or her recommendations. Independence is an input into the….

Moran's retirement annuity would be in perpetuity, with all other terms as equal (Ceteris Paribus), this is to mean that there is not a 20-year period till maturity. Additionally, as there is not a 20-year distribution period, the company will move the funds over to another interest bearing account at 12% yet not expect to have an account balance of $0 at the end of the term.
Generally speaking, actuaries will claim that a perpetuity will be planned for the client to payout its obligations via annuitized payments until the client age of 98 years old. Ms. Moran's current age is unclear, and we only know that her retirement annuity stream would last for 20 years. If she is 50 and retires in 12 years at 62, then her 20-year annuity stream would run out at 82 years old, with the perpetuity having to extend to cover an additional 16….

28%
This gives project B. An I of -0.028%

Part C

Using the above assessments each may indicate which investment may be preferred. Using the payback period project a has a payback period of 4 years, whereas project B. has a payback period of 3 years 8 months. If the fastest payback period is preferred than project B. will be chosen.

The NPV which discounts the net revenues into a net present value shows that Project a has a loss of 1,576 and the loss for Project B. is 1,074. If assessed only on this basis, project a makes the greatest loss. However, the basic rule of NPV is that investments should only be made in projects where there is a new positive value, otherwise the firm is not earning the amount it is costing them in payments to support the capital used to fund the project (Weetman, 2010, p269).

The I calculation also shows….

The curve describing this relationship between risk and return is a hyperbole connecting one and the other. Logically and economically, this also makes sense: if the investor is willing to assume more risks, he is also likely to potentially discover more alternatives and solutions in which to invest his money and open his investment to a greater impact from the market, in a positive sense.
Additionally, spending more money on the open market can even involve the investor in the decision making process, essential in determining the way the business is likely to evolve in the future. Putting your money at more risk than another investor will bring about higher returns.

The investments in securities or in a business are just as much subjected to the impact of inflation as the time deposits are. There are however important temporal differences. With the investment in a business or in securities, the rate….

Corporate Finance
It is important to note, from the onset, that for some projects, NPV may be more effective than I as far as discounting cash flows is concerned. This is particularly the case given that one of I's key limitations is its utilization of only a single discount rate in the evaluation of investments. Essentially, I would most likely work perfectly in those instances where, for instance, the two projects being evaluated have a discount rate that is common, have similar risks, and have cash flows that are predictable. It is, however, important to note that over time, discount rates do change. Essentially, with no modification, I doesn't capture the flexible discount rates. In the final analysis, therefore, I cannot be seen as being appropriate for long-term projects whose discount rates keep changing. I users could also face challenges in those instances where the discount rate is unknown. Further, I,….

Or that he is to make expenses on dropping pollution outside the quantity that is in the best welfare of the business or that is mandatory by law in order to add to the social objective of improving the atmosphere (Friedman, 1970).
Corporate culture has been established as an administration tool. Corporate culture can aid to attain corporate objectives comprising profit enlargement. Advocates of corporate culture as a tool propose that bureaucratic control should be substituted with culture control in that the management of rewards should be exchanged for the management of culture comprising principles, philosophies, language, ceremonial and legend. This procedure of socialization can comprise: selection at entrance level that makes applicants ask if they are good enough; humility-inducing familiarities in the first months; advancement tied to established record; consideration to corporate values and strengthening legend (Van den Berghe and Levrau, 2004).

Over the last several years, numerous Vietnamese corporations….

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3 Pages
Essay

Economics

Corporate Finance Tools in Daily Life Many

Words: 1029
Length: 3 Pages
Type: Essay

Corporate Finance Tools in Daily Life Many of the concepts associated with corporate finance also have applications in everyday life. A range of corporate finance tools are already used in…

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3 Pages
Corporate

Business

Corporate Finance East Coast Yachts I My

Words: 702
Length: 3 Pages
Type: Corporate

Corporate Finance East Coast Yachts I My time horizon is long-run. I would want a diversified portfolio, but can afford to take the risk of equities. So the first decision is…

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3 Pages
Research Paper

Economics

Corporate Finance Potential Impacts of an Increasing

Words: 870
Length: 3 Pages
Type: Research Paper

Corporate Finance Potential Impacts of an Increasing Interest Rates Interest rates have a strong influence in the economy. his influence is one reason many central banks utilize interest rates as a…

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2 Pages
Multiple Chapters

Economics

Corporate Finance 3a This Depends on the

Words: 519
Length: 2 Pages
Type: Multiple Chapters

Corporate Finance 3a) This depends on the project. b) Better than the company or industry average, whichever is higher. C) Higher than the cost of capital. d) e) over 0. The…

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2 Pages
Term Paper

Economics

Corporate Finance Jaedan Industries

Words: 547
Length: 2 Pages
Type: Term Paper

Corporate Finance atio Liquidity atios Current ratio Activity atios Inventory turnover Total asset turnover Debt ratios Debt ratio Debt-to-equity ratio Profitability ratios eturn on common equity eturn on total assets DuPont Analysis The DuPont equation, according to Besley and Brigham (), can be…

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11 Pages
Research Paper

Military

Corporate Finance Over the Last

Words: 3740
Length: 11 Pages
Type: Research Paper

To include: Rangers, Special Forces, Delta Force, Special Air Service, Special oat Service and Navy SEALs. (Dunnigan, 2010) As a result, many people within the U.S. military and…

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1 Pages
Essay

Business

Corporate Finance Elen's Financial Plan the Firm

Words: 321
Length: 1 Pages
Type: Essay

Corporate Finance LN's Financial Plan The firm, which was conceptualized in 1944 as MPRSA changed to ndesa, in the year 1997. In 2006-2007, both by nel in Italy and Gas natural…

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5 Pages
Term Paper

Economics

Corporate Finance Issues in Order

Words: 1430
Length: 5 Pages
Type: Term Paper

At first, it would seem that debt has more advantages than new equity. However, that is not always the case. The fact is that certain equilibrium between issuing debt…

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3 Pages
Essay

Economics

Corporate Finance Risk Has a

Words: 849
Length: 3 Pages
Type: Essay

Additionally, alternative 2 provides the lowest coefficient of variation as well as the lowest standard deviation. The level of risk given the expected return is high and offers…

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2 Pages
Case Study

Economics

Corporate Finance Analysts' Independence Refers to the

Words: 580
Length: 2 Pages
Type: Case Study

orporate Finance Analysts' independence refers to the ability of the analyst to publish opinions about the stocks they cover, free from corporate interference or oversight. In this pre-SOX example, analysts…

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3 Pages
Case Study

Economics

Corporate Finance Sunrise Industries How

Words: 951
Length: 3 Pages
Type: Case Study

Moran's retirement annuity would be in perpetuity, with all other terms as equal (Ceteris Paribus), this is to mean that there is not a 20-year period till maturity.…

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7 Pages
Term Paper

Economics

Corporate Finance Investment Assessment Questions

Words: 2676
Length: 7 Pages
Type: Term Paper

28% This gives project B. An I of -0.028% Part C Using the above assessments each may indicate which investment may be preferred. Using the payback period project a has a payback…

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8 Pages
Term Paper

Economics

Corporate Finance in Its Very

Words: 2316
Length: 8 Pages
Type: Term Paper

The curve describing this relationship between risk and return is a hyperbole connecting one and the other. Logically and economically, this also makes sense: if the investor is…

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2 Pages
Term Paper

Economics

Corporate Finance it Is Important to Note

Words: 578
Length: 2 Pages
Type: Term Paper

Corporate Finance It is important to note, from the onset, that for some projects, NPV may be more effective than I as far as discounting cash flows is concerned. This…

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14 Pages
Essay

Business

Corporate Finance Corporate Governance and

Words: 4499
Length: 14 Pages
Type: Essay

Or that he is to make expenses on dropping pollution outside the quantity that is in the best welfare of the business or that is mandatory by law…

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