...CULTURE: Performance-drive: Many PE associates feel like they are directly contributing to the fund’s performance. That feeling is almost completely absent from banking. PE associates know that a large part of their compensation is a function of how well these investments do and have a vested interest in focusing on how to extract the maximum value of all portfolio companies. When there is an active deal it can be a high pressure environment. Comparable to banking when there is an active deal, but otherwise much more relaxed: Usually get into the office around 9am and may leave between 7pm-9pm depending on what you’re working on. Possibility of working weekends when there is an active deal, but usually the weekends are yours. WORK ENVIRONMENT: Size: Private equity firms tend to be smaller in nature so your entire fund may be only 15 people. As an Associate, you will have interaction with everyone including the most senior partners. Unlike at many of the bulge bracket investment banks, senior management will know your name and what you are working on. Traditional vs Google: Certain PE shops that have taken a “Google” approach and offer free food, toys in the office, televisions in offices, and sometimes even beer in the fridge or a keg in the office. Other PE firms are run more like traditional, conservative corporations where you are in a cube environment. QUALITIES SOUGHT FOR BY FIRMS Smart: You have to be able to see the opportunities to make an investment...
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...Chapter 1 A Brief History of Risk and Return 6. Cherry: RA = 8.60% Var = 1/4[(.17 – .086)2 + (.11 – .086)2 + (–.02 – .086)2 + (.03 – .086)2 + (.14 – .086)2] = 0.00623 Standard deviation = (0.00623)1/2 = 0.0789 or 7.89% Straw: RB = 10.20% Var = 1/4[(.16 – .102)2 + (.18 – .102)2 + (–.06 – .102)2 + (.01 – .102)2 + (.22 – .102)2] = 0.01452 Standard deviation = (0.01452)1/2 = 0.1205 or 12.05% 7. The capital gains yield is ($49 – 56)/$56 = –.1250 or –12.5% (notice the negative sign). With a dividend yield of 1.3 percent, the total return is –11.20%. 8. Geometric return = [(1 + .17)(1 + .11)(1 - .02)(1 + .03)(1 + .14)](1/5) – 1 = .0837 or 8.37% 9. Arithmetic return = (.21 + .12 + .07 –.13 – .04 + .26) / 6 = .0817 or 8.17% Geometric return = [(1 + .21)(1 + .12)(1 + .07)(1 – .13)(1 – .04)(1 + .26)](1/6) – 1 = .0730 or 7.30% 20. Stock A: RA = (0.08 + 0.08 + 0.08 + 0.08 + 0.08)/5 = .0800 or 8.00% Var = 1/4[(.08 – .08)2 + (.08 – .08)2 + (.08 – .08)2 + (.08 – .08)2 + (.08 – .08)2] = 0.000000 Standard deviation = (0.000)1/2 = 0.000 or 0.00% RG = [(1 + .08)(1 + .08)(1 + .08)(1 +.08)(1 + .08)]1/5 – 1 = .0800 or 8.00% Stock B: RA = (0.03 + 0.13 + 0.07 + 0.05 + 0.12)/5 = .0800 or 8.00% Var = 1/4[(.03 – .08)2 + (.13 – .08)2 + (.07 – .08)2 + (.05 – .08)2 + (.12 – .08)2] = 0.001900 Standard deviation = (0.001900)1/2 = 0.0436 or 4.36% RG = [(1 + .03)(1 + .13)(1 + .07)(1 + .05)(1 + .12)]1/5 – 1...
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...track ahead of an oncoming train. At the time Tripp had joked, “Now you owe me.” Referring to the opportunity to purchase a piece of commercial property before the sale became public knowledge, he continued, “How about showing me a great off-market deal some day?” Now, in September 2009, it seemed that O’Brien had indeed returned the favor. The opportunity O’Brien had just briefly outlined on the phone sounded perfect for Wildcat. Financial Commons was a 90,000-square-foot office property located in the Chicago suburb of Skokie. The building was 90 percent occupied and was being offered for what seemed like an incredible price of $10.4 million. Given the bleak commercial market environment at the time, such opportunities were few and far between. But Tripp knew there were many factors that could spoil this deal. As they did with several properties each week, Tripp and Wildcat’s MBA-student intern, Jessica Zaski, would have to dig deeper into the numbers. What were the economic fundamentals in the market? Who were the tenants of Financial Commons? Would Wildcat be able to profitably exit this deal in three to five years? Could it get the returns its investors...
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...Problem 3-23 Sales Mix; Break-Even Analysis; Margin of Safety (1). (a) Contribution Income Statement Alvaro | | Bazan | | Amount | Percent | | | Amount | Percent | Selling price per unit | € 4.00 | | | Selling price per unit | € 6.00 | | Variable expenses per unit | € 2.40 | | | Variable expenses per unit | € 1.20 | | Fixed Expenses | € 660 | | | Fixed Expenses | € 660 | | Number of units sold monthly | 200 | | | Number of units sold monthly | 80 | | Break Even Point in units | 41 | | | Break Even Point in units | 14 | | Sales at 200 units | € 800.00 | | | Sales at 80 units | € 480.00 | | Margin of Safety in dollars | € 636.00 | | | Margin of Safety in dollars | € 396.00 | | | Percent of sales | 80% | | | Percent of sales | 83% | Alvaro | | Bazan | | Amount | Percent | | | Amount | Percent | Sales | € 800.00 | 100% | | Sales | € 480.00 | 100% | Variable Expenses | € 480.00 | 60% | | Variable Expenses | € 96.00 | 20% | Contribution Margin | € 320.00 | 40% | | Contribution Margin | € 384.00 | 80% | (b). Total without Cano | | Amount | Percent | Sales...
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...In topic 1 we looked at the goal of a financial manager, ie to maximize the value of the firm. This is an extension to the previous goal of maximizing shareholders’ wealth which is a narrower viewpoint then that of maximizing the value of the firm. Since the firm is made up of assets, liabilities and equity, then the value of the firm should be the sum of the parts. Since there are many different types of assets we will concentrate on the value of the liabilities and equity. The number of items within these two categories is usually smaller than the amount of assets. For the liabilities the main item is bonds and for equity it is ordinary (common stock) shares. In this topic we will look at valuing debt, equity and then look at some of the different ways The Corporate Bonds and risk of default Reading Brealey et al. 2011, 3-6 Corporate Bonds and risk of default, pp.65-8 The risk of default is real for corporate bonds. That risk attaches an interest rate premium. The amount of the risk premium originates from the rating assigned to the bond by a variety of firms. This section of the chapter focuses on the concepts related to risk and bond ratings. Problem 2.5 Complete Problem Set question 29 page 72 of Brealey et al. 2011 The value of Common stock Reading Brealey et al. 2011, 4-1 How common stocks are traded, 4-2 How common stocks are valued , pp.75-81 Very briefly introduces the concepts of primary and secondary markets, organized exchanges, and the over-the-counter...
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...We are delighted to announce the formation of our new venture capital firm, BD Venture Limited, and our first fund — BDT 50 crore in size — aimed purely at investing in the best growth companies and enterprises in Bangladesh, focusing mainly on Information Technology, Agriculture and Agro based industries. The 1st board meeting of the company was held on the 15th April, 2012 at the company’s office at Banani, Dhaka. The meeting was presided over by Mr. M. Aftabul Islam FCA, Chairman of the company. It was also attended by Mr. Mamun Rashid, Mr. M Ehsanul Huque, Mr. Anis A Khan, Mr. Shafiqueul Azam, Mr. Noor Alam Chowdhury and other sponsors/ directors of the company. 80% share of BD Venture limited is owned by corporate and the rest 20% by renowned professionals, bankers and businessmen like Mr. Aftabul Islam FCA, Mr. Mamunur Rashid, Mr. Abdul Hafiz Chowdhury FCA, Mr. M Ehsanul Haque, Mr. MoshiurRahman, Mr. Wahidul Haq Siddiqui etc. Mutual Trust Bank Ltd, National Bank Ltd, BGIC, Green Delta Insurance Company, Asia Pacific Insurance Company, Lanka Bangla Finance Ltd, MIDAS Financing Ltd, and Data Edge Ltd are the institutional share holders of BD Venture Ltd. The company will start its operation soon. The vision of the company will be to promote entrepreneurs, and to create a base of SME organizations to help expand and grow their business through equity financing in Bangladesh. The need for Venture capital companies was felt for entrepreneurship development in the country...
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...INVESTMENT RECOMMENDATION Swedish Tower Company RCFA M&A Case Competition Prepared for:CPP Investment Board Prepared by: SiLu Liu Michael Shang Wenda Yang Yixun(James) Zhang Executive Summary After in-depth financial analyses and qualitative considerations, we recommend CPPIB-Private Board proceed with the competitive auction of Swedish Tower Company (STC), a Swedish owner of television and mobile telecommunication towers. In particular, we identified a leveraged buyout capital structure to be suitable given STC’s proven earning growth and strong market position, along with significant opportunity for cost reduction. We conducted financial valuation using market comparison method. The purchase price is between 2,653 million and 3,243 million. The IRR of the project is 28% when exiting by the end of 5th year. Overall this project will generate steady growth with great upside potential and low company-wide or industry-wide risks. We will dive into the details of analyses in the sections followed. Method and Valuation Drivers Primarily, we used transaction multiple method of valuation. Given the very nature of LBO, these additional drivers need to be carefully considered when valuing equity return: 1. Purchase Price and exit price will directly affect the return generated. Exit price is calculated using exit multiple. A higher exit multiple will increase estimation for selling price and thus the underlying equity value. 2. Leverage Ratio: A higher leverage...
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...Chapter 4 answers Exercise 4-13 (20 minutes) | | Total | Per Unit | 1. | Sales (20,000 units × 1.15 = 23,000 units) | $345,000 | $ 15.00 | | Variable expenses | 207,000 | 9.00 | | Contribution margin | 138,000 | $ 6.00 | | Fixed expenses | 70,000 | | | Net operating income | $ 68,000 | | | | | | 2. | Sales (20,000 units × 1.25 = 25,000 units) | $337,500 | $13.50 | | Variable expenses | 225,000 | 9.00 | | Contribution margin | 112,500 | $ 4.50 | | Fixed expenses | 70,000 | | | Net operating income | $ 42,500 | | | | | | 3. | Sales (20,000 units × 0.95 = 19,000 units) | $313,500 | $16.50 | | Variable expenses | 171,000 | 9.00 | | Contribution margin | 142,500 | $ 7.50 | | Fixed expenses | 90,000 | | | Net operating income | $ 52,500 | | | | | | 4. | Sales (20,000 units × 0.90 = 18,000 units) | $302,400 | $16.80 | | Variable expenses | 172,800 | 9.60 | | Contribution margin | 129,600 | $ 7.20 | | Fixed expenses | 70,000 | | | Net operating income | $ 59,600 | | Exercise 4-18 (30 minutes) 1. | Profit | = Unit CM × Q − Fixed expenses | | $0 | = ($30 − $12) × Q − $216,000 | | $0 | = ($18) × Q − $216,000 | | $18Q | = $216,000 | | Q | = $216,000 ÷ $18 | | Q | = 12,000 units, or at $30 per unit, $360,000 | Alternative solution: 2. The contribution margin is $216...
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...One of the main challenges for freelance translators is to find suitable clients, and once they have found them, one of their main concerns is how to retain them. As a freelancer you may well find that working for translation agencies rather than for private clients offers both peace of mind and a more reliable flow of orders. As a professional freelancer you are doubtlessly well aware of the many benefits of freelance work. Most of these will be associated with themes such as independence, freedom and - if you are lucky - considerable revenues. However, you may also have discovered a number of serious downsides to this kind of work. The one cited perhaps the most frequently is the ongoing pressure to attract clients. Although we know of no research to verify it, there is a law in the translation business which states that a freelance translator who has no work, is not a good translator. The opposite is also true: a good translator will never be at a loss for work. Even so, your order portfolio as a freelancer will also depend, at least in part, on your commercial skills in attracting clients, offering your services to potential clients, and building up networks. Once you have found enough clients for a sustainable business, moreover, you may find it difficult to balance your capacity with their needs. In view of these considerations, it might be a good idea to offer your services to translation agencies as well. The rates they offer may not be as high as those of private...
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...of an anaesthetic machine prior to use. On the morning of this particular learning experience I had already pre-informed the student of the event so we could start promptly. The student arrived on time as I did. We went straight to the operating theatre where we were going to be working for the day. On arriving in that theatre I discovered it had been used prior and was left in an untidy state so I had to tidy it up before we could proceed. Had I have thought before hand I could have checked the day before to ensure this was not the case. I started by showing the student the anaesthetic machine we were going to use, explained the different parts and how they function. The student looked a bit perplexed at the terminology I used so I tried more simple terminology and explanations and that seemed to help. After the brief explanation of how the anaesthetic machine worked I described The checks we were going to carry out. I showed the student the 2012 guide to checking the machine produced by the College of Anaesthetists which is the one we currently use. We started to check the machine going through the guide step by step as described. It took quiet a while to complete the check. Afterwards I asked the student if they followed what we had done, the student commented it was a bit too much to go through in one session. I think looking back that I should have broken down the process into perhaps two or more sessions allowing the student time to take in and question the...
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...The economics profession’s jargon serves a variety of purposes. For example, their common terminology serves to make for more precise communication. It allows ideas to be communicated clearly and exactly. This exactness and clarity of terminology serves society by allowing economists to discuss economics with each other and with society with clarity so that other economists have a better understanding of what an economist is saying. A common terminology also serves to divide insiders from outsiders. For outsiders, for example economic students, who do not have a clue what these terms mean, economists’ terminology is exclusionary. It makes economists the gatekeepers of economic ideas. Economists’ terminology serves as a barrier to entry, restricting the supply of economists, and increasing the value of the services provided by existing economists. Which of these two reasons is the strongest? To answer that question let us consider two examples given by Amanda Bennett, the author of The Wall Street Journal article, “Economists + Meeting = A Zillion Causes and Effects” [The Wall Street Journal, January 10, 1995]. The two examples are the concepts of externality and utility, Why do economists use these terms? Based on her article, and on my classroom experience, I would judge that, of the two reasons, the self-serving reason is the stronger. Essentially, economists create their terminology primarily to make life difficult for students. Consider the first example: externality. Why...
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...How Does Medical Terminology Work? ________________________________________ Most medical terms can be broken down into one or more word parts. For simplicity in explanation, we will say that there are four possible word parts, and any given medical term may contain one, some, or all of these parts. We will classify these word parts as (1) roots, (2) prefixes, (3) suffixes, and (4) linking or combining vowels. An example of a word with three of the above parts is the medical term "pericarditis", which means "inflammation of the outer layer of the heart". Pericarditis can be divided into three parts: peri - card - itis. Once divided into its essential parts, pericarditis can be translated: the prefix "peri" translates to "surrounding", the root "card" translates to "heart", and the suffix "itis" translates to "inflammation". Hence, pericarditis is an inflammation of the area surrounding the heart, or an inflammation of the outer layer of the heart, anatomically known as the pericardium. Medical terms always consist of at least one "root", although they may contain more. The root of a word is that part which contains the essential meaning of the word. An example of this was seen above in the term "pericarditis". The root of the word - card - refers to the heart, so any prefix or suffix added to the root (card) will only function to add to the specificity of that word. An example of this would be the prefix "brady", which means "slow". If "brady" is added to the root "card"...
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...Joanna Nowicka-Jakubczyk EMBA XVII edition Whirlpool Corporation’s Global Strategy - Case Report As many American based companies, Whirlpool Corporation after building strong position and success in North America, decided to “go international” and start its global expansion. The main Whirlpool’s objective was becoming the world market leader in home appliances, in what CEO of Whirlpool – David Whitwam strongly believed. Whitwam’s “go global” strategy plan was based on: * entering different markets, European, Asian, South American in parallel; * acquisitions of competitive appliance companies, i.e Philips, Indian companies; * creating joint ventures in targeted markets, like China; * new investments, mainly in South America. Despite great initial enthusiasm and proofs, that their strategy was successful, in the mid-1990s, serious problems had occurred in Whirlpool’s international operations, for instance significantly decreased profitability, also on home market, reported losses in Europe and Asia, failures in joint ventures, and last but not least in general lack of truly integrated strategy and company. To respond to a question, what happened, why Whirlpool faced so many problems on its way to be an international leader, we need at first give answer to a question, was their strategy assumptions correct? In formulating and development of global strategy, in my opinion Whirlpool made some general assumptions for industry development, which might...
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...Module Study Guide Information and Communication Technology The Claude Littner Business School The Claude Littner Business School Information and Communication Technology Module Study Guide |Module Code |BA40019E | |Level |4 | |Credits |20 | AY2014-2015 Version No 1 © UWL 2014 Location/Paragon Information and Communication Technology Module Study Guide |Contents |Page No. | |Module Leader and Teaching Team Details…………………… 4 | | | | | |Facts and figures | | | | | |Section A Overview and Content | | |1 Welcome and Introduction to the Module………6 ...
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...their course materials in. Required and suggested materials can be purchased at the Macomb Community College Bookstore. Course Description Prerequisite: ENGL-1180 or ENGL-1210 No credit after ENGL-1190. The focus of this course is the writing of critical essays based upon readings in literature, and the further development of writing skills learned in ENGL-1180 or ENGL-1210. The course places extensive emphasis upon research. Students who have completed ENGL-1190 successfully should not take ENGL-1220. Students will not receive credit for both. (3 credit hours) Course Outcomes Outcome 1: Upon completion of this course the student will be able to discuss the significance of imaginative writing in essays that employ concepts and terminology appropriate to literature and its conventional genres. Objectives: * Provide at least a rudimentary explanation of the nature of imaginative literature as a vital, creative human activity. * Define a given genre and distinguish it from the other(s). * Identify and explain the...
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