...Francisco Acevedo PRG/211 July 21, 2014 Instructor Forest Sun Programming Fundamentals Paper There have been dramatic changes to information technology systems over the past couple of decades. For example, the hardware and the software that is installed for mobile phones have advanced tremendously. In earlier times, you would have to push physical buttons on the phone then press the send button to make a call, later you had to type in a number and hit send and it would begin the phone call, but now you need to open a specific application on the phone to place the call. The differences between these methods of completing a call can be described as Procedural Programming, which is the older model phones, and Object-Oriented Programming, which is the application based dialing used on phone today. Each method of programming has its own set of uses, strengths, and weakness, the programmer needs to establish what is needed before selecting the method of programming he wishes to apply. Procedural Programming is a method of writing software that is centered on the procedures or actions that take place in a program. It is a way of programming by identifying the set of steps to solve a certain problem and the exact order that they should be executed to reach the desired outcome or state. For example, if you want to calculate the month-end closing balance for a bank account, then the required steps would be as follows. First, you acquire the starting balance of the account...
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...Programming Fundamentals Paper Programs are very important part in the information Technology ever changing world. For programmers to designing and coding a procedure, module, or object programming can be very complex and time consuming. Once these elements of a computer program are working correctly, it makes sense to use the code as often as practical. Reusability of codes has become a valuable part of adding efficiency to computer programming. Programs are instructions in sequence, which are made up with modules, which helps the computer hardware on performing data. The two types of programming languages that will compares in this paper are Procedural and Object-Oriented programming. Programmers can use flowcharts diagram that can represents, and visual the program processes. Key difference between Procedural and Object-oriented programming for the object-oriented program break down programming task into objects, which encapsulate methods and data; and for the procedural programming, which break task in to subroutines and variables of collections. The object-oriented program designing technique that used the top-down aspects to abstract data types with the combined modules and structure design. Object-oriented program design composes of system based on concept of an object. Object-oriented programming supports several characteristics directly. Message, method, object, and class are the attributes or entities in the object-oriented programming. Some benefits are include...
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...effort to keep the code simplified and save time. When you spend days. Months and even years writing a program reusing code is a life saver and can cut years or months off coding. Something times in coding simpler is better and allows others the chance to improve or fix the code at a later time. Once a programmer gets the code right they don't want to have to write it again since the possibility of an error is higher each time you attempt it and the programmer would have to spend a great deal of time rewriting that code which makes the software’s lifecycle dramatically increased which can be costly which is what everyone wants to avoid. In order to compare and contrast procedural programming modules and objects we need to know a little about each beforehand such as a procedural programming module is known as a procedure which performs specific tasks and some of the tasks that are preformed are calculations, readings or writing files, and also output displaying and on the other hand the procedures...
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...AGI shareholders. * AGI board unanimously approved to market off the business, but it subject to three conditions; * Retirement of current debt in full; * Payment of a reasonable dividend to AGI shareholders; and * The courier business had to be left with sufficient capital to stay in business. * Proposal To address the above situation, we propose the following valuation: * TEV/EBITDA multiple for both ICS and Amtelecom Communications * METHOD #1 - Using the Stock Price / Dividend Yield. * METHOD #2 -Average EBITDA Industry Trading Multiples * METHOD #3 - Using Average EBITDA Transaction Multiples (M&A Comparable Method) * METHOD #4 - Discount Cash Flow Valuation Analysis. * Fundamental Analysis using g @5% and WACC @6% If the market value of a stock is lower than its intrinsic value, this stock is defined as “trades at a discount. To figure out whether AGI is...
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...1 EFFICIENT MARKETS HYPOTHESIS Andrew W. Lo To appear in L. Blume and S. Durlauf, The New Palgrave: A Dictionary of Economics, Second Edition, 2007. New York: Palgrave McMillan. The efficient markets hypothesis (EMH) maintains that market prices fully reflect all available information. Developed independently by Paul A. Samuelson and Eugene F. Fama in the 1960s, this idea has been applied extensively to theoretical models and empirical studies of financial securities prices, generating considerable controversy as well as fundamental insights into the price-discovery process. The most enduring critique comes from psychologists and behavioural economists who argue that the EMH is based on counterfactual assumptions regarding human behaviour, that is, rationality. Recent advances in evolutionary psychology and the cognitive neurosciences may be able to reconcile the EMH with behavioural anomalies. There is an old joke, widely told among economists, about an economist strolling down the street with a companion. They come upon a $100 bill lying on the ground, and as the companion reaches down to pick it up, the economist says, ‘Don’t bother – if it were a genuine $100 bill, someone would have already picked it up’. This humorous example of economic logic gone awry is a fairly accurate rendition of the efficient markets hypothesis (EMH), one of the most hotly contested propositions in all the social sciences. It is disarmingly simple to state, has far-reaching consequences...
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...INVESTMENT VALUATION: SECOND EDITION Chapter 1: Introduction to Valuation Chapter 2: Approaches to Valuation Chapter 3: Understanding Financial Statements Chapter 4: The Basics of Risk Chapter 5: Option Pricing Theory and Models Chapter 6: Market Efficiency: Theory and Models Chapter 7: Riskless Rates and Risk Premiums Chapter 8: Estimating Risk Parameters and Costs of Financing Chapter 9: Measuring Earnings Chapter 10: From Earnings to Cash Flows Chapter 11: Estimating Growth Chapter 12: Closure in Valuation: Estimating Terminal Value Chapter 13: Dividend Discount Models Chapter 14: Free Cashflow to Equity Models Chapter 15: Firm Valuation: Cost of Capital and APV Approaches Chapter 16: Estimating Equity Value Per Share Chapter 17: Fundamental Principles of Relative Valuation Chapter 18: Earnings Multiples Chapter 19: Book Value Multiples Chapter 20: Revenue and Sector-Specific Multiples 3 16 37 81 121 152 211 246 311 341 373 425 450 487 533 593 637 659 718 760 Chapter 21: Valuing Financial Service Firms Chapter 22: Valuing Firms with Negative Earnings Chapter 23: Valuing Young and Start-up Firms Chapter 24: Valuing Private Firms Chapter 25: Acquisitions and Takeovers Chapter 26: Valuing Real Estate Chapter 27: Valuing Other Assets Chapter 28: The Option to Delay and Valuation Implications Chapter 29: The Option to Expand and Abandon: Valuation Implications Chapter 30: Valuing Equity in Distressed Firms Chapter 31: Value Enhancement: A Discounted Cashflow Framework Chapter...
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...Human Behavior and the Efficiency of the Financial System by Robert J. Shiller* Abstract Recent literature in empirical finance is surveyed in its relation to underlying behavioral principles, principles which come primarily from psychology, sociology and anthropology. The behavioral principles discussed are: prospect theory, regret and cognitive dissonance, anchoring, mental compartments, overconfidence, over- and underreaction, representativeness heuristic, the disjunction effect, gambling behavior and speculation, perceived irrelevance of history, magical thinking, quasimagical thinking, attention anomalies, the availability heuristic, culture and social contagion, and global culture. Theories of human behavior from psychology, sociology, and anthropology have helped motivate much recent empirical research on the behavior of financial markets. In this paper I will survey both some of the most significant theories (for empirical finance) in these other social sciences and the empirical finance literature itself. Particular attention will be paid to the implications of these theories for the efficient markets hypothesis in finance. This is the hypothesis that financial prices efficiently incorporate all public information and that prices can be regarded as optimal estimates of true investment value at all times. The efficient markets hypothesis in turn is based on more primitive notions that people behave rationally, or accurately maximize expected utility, and are able...
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...Is Skype worth $8.5 billion? An exercise in valuing young, growth companies Posted by Aswath Damodaran Wednesday, May 18, 2011 Last week, Microsoft announced that it would buy Skype for $8.5 billion. The reaction was fast, furious and very predictable. First, there was the search for reasons for the deal and technology mavens listed a few. Second, there was the reaction from investors and analysts, which was generally not very positive. Third, it was noted that Bill Gates, the face of Microsoft for so long, was strongly in favor of the deal (thus providing cover for Steve Ballmer). Ultimately, though, the discussion of the deal was lacking in one key respect: Is Skype worth $8.5 billion to Microsoft? A few of the analysts noted that the price paid was roughly ten times Skype's revenues in 2010, an undoubtedly rich price, but by itself proving nothing. After all, if you had been able to buy into Google at ten times revenues in 2003, you would be rich now. A great deal of attention was paid to whether Skype was the right company for Microsoft to buy and the strategic/synergistic fit of the two companies. It has always been my contention with acquisitions that it is not the strategic fit or synergistic stories that make the difference between a good deal and a bad one, but whether you buy a company at the right price. Put in more direct terms, buying a company that is a poor strategic fit at a low price is vastly preferable to buying a company that fits like a glove at the wrong...
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...comparable (or comp) same-store-sales in Q1 2013. This is the first such decline in 6 quarters of Walmart reporting comp increases. Based on a recent report published by Bloomberg, it appears Wal-Mart is struggling to keep its stores stocked with items that consumers are seeking. As seen in the below chart, Walmart’s tock, WMT, has been lagging behind its main competitors, Costco (COST) and Target (TGT). Given the weakness in global economies, and cautious consumer spending in the U.S. (WMT's biggest market), investors might be wondering whether Walmart stock is a good buy, sell or hold. Does WMT stock still make sense as a good investment or should investors seek better opportunities somewhere else? Let's analyze some of the valuation, fundamental and technical variables to better determine whether Walmart stock is a good buy, sell...
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...The company I pick from S&P 500 is Google Inc., which is a multinational corporation specializing in internet-related service and products. Google has been estimated to be a rapidly growing global technology leader focused on improving the way people connect with information, and its trading stock price is remained really high and still on the rise. The expected sales are given by Capital IQ from year 2014 to year 2018, and their values are listed below in the table. By calculating the average growth rate of sales over next five years, which is 12.8%, and have it compared with the one from the previous three years, which is 25.8%, it can be concluded that the projected sales value given by Capital IQ are reasonable. The average growth rate for the next five years represents a stable rate for a longer term, which should be lower than the short-term one when seeing the future performance of the company in a long-run view (Appendix A). Table1. Expected Cash Flows (in millions) | 2014 | 2015 | 2016 | 2017 | 2018 | Sales | 68,176 | 78,377 | 88,614 | 98,769 | 109,330 | The estimated EBITDA to Sales ratio is gained by calculating the average value of EBITDA margins from year 2011 to year 2013, which is 33.3%. Because the sales margins are acquired by Capital IQ from the market data as reliable source, we can use the average of the previous three years’ EBITDA margins as a constant multiple to project the future five years’ EBITDA. By assuming a constant EBITDA/Sales...
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...Memorandum TO: FROM: DATE: September, 27 2013 RE: One-Page Memo on JetBlue Case Study The purpose of this memorandum is to discuss the JetBlue case study, and review my answers to the specified questions. I will elaborate as to which price I believe JetBlue should choose for their initial public offering (IPO), and why JetBlue should choose that price. The first step in determining JetBlue’s IPO price is analyzing specific ratios of publicly traded competitors in JetBlue’s industry. I analyzed the Price-to-Earnings multiples, Cash Flow multiples, Total Assets multiples, and the Revenue multiples of the direct competitors of JetBlue. JetBlue’s direct competitors include; AirTran, Alaska Air, American West, MidWest, and Southwest. JetBlue’s relative stock prices are as follows: |JetBlue's Stock Prices Implied By Different Multiples | |Airline |P/E Multiple |CF Multiple |TA Multiple |Revenue Multiple | |AirTran |$36.41 |$23.71 |$45.20 |$9.24 | |Alaska Air |$47.23 |$27.64 |$30.69 |$8.92 | |American West |$29.04 |$30.82 |$26.24 |$8.39 | |MidWest |-$15.60 |-$11.42 |$39...
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...Warren Buffett Case Warren Buffett is the role model to all investors; therefore, I believe what he believed in is right (at least to him). However,we need to understand that not all of his rules work for everyone. Buffett's first rules is not to lose. The second rule is not to forget the first rule. He is absolutely right about this because risk management is always the key to success in investing. I think that valuing a share based on its relative performance to similar shares is a good strategy to make sure the return on your investment. The comparison of an investment against other returns available in the market was an important benchmark of performance is a good point. Moreover, Buffett also said that we should invest based on sound research and a detached emotional state and not to become an emotional slave to day to day price fluctuation. Buffett also has his points when he said that we should not believe in Efficient Market Theory because the market does have efficient sometimes doesn't mean the market always have its efficient. The intrinsic value is another point that inspired me because I agreed with him about we should focus on the firm's future output but not the historical input. However, I slightly disagree that accounting reality is useless. It is because we can't tell a firm's financial health by just looking at the economic reality. I also think that his heavy focus on economic reality relies too heavily on subjective evaluation of intangible assets and sometimes...
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...FINC 554 Investment Banking Names: Ali Geramian & Dinh Ton Assignment: Date : Google, Inc. February 11, 2013 Section (circle) ____30______31______32____ This assignment exclusively represents our own work. We have not discussed this case or this assignment with anyone and have done no outside research unless specifically authorized to do so. We have not discussed this work with any other students past or current nor have we reviewed any related work product prepared by such students. We have complied with the requirements of the Georgetown Honor System. Signed__________________________________________________________________ 1. Our review of the 4 analyst reports yields the following common themes: A) All reports are bullish on Google’s 2009 stock forecast; B) All use P/E ratio as part of their valuation method; and C) All EPS estimates, which exclude stock compensation, are in the range of $18.90 to $22.20. (Please refer to Exhibit 1 for more details). We will explore each report in more detail: Credit Suisse: Of the 4 reports, Credit Suisse achieves the most conservative price target at $400 per share based on a 5-year DCF analysis. Adverse macroeconomic factors are reflected in a comparatively high WACC of 13%. Terminal growth rate is responsibly estimated at 3%. Credit Suisse follows up with comparable P/E ratio analysis, which yields a price target of $339/share based on 17.9x ‘09 EPS of $18.9 and a 7.7x EV/EBITDA multiple. These estimates place...
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...Jorge Porres August 18, 2013 Investments Keiser University Week 3 Essays 1. Industry Life Cycle: Discuss the industry life cycle, how this concept can be used by security analysts, and the limitations of this concept for security analysis. The industry life cycle is made up of five stages: 1. Pioneer phase: This face is characterized by the high cost of production and the low demand of the product by the market. Mostly made up of start-ups. 2. Growth phase: When sales start to grow thanks to little competition. 3. Mature Growth phase: Companies begin to be affected by competition and as a result profit margins begin to diminish. 4. Stabilization /Maturity phase: this is typically the longest phase an industry will go thru, it is still affected by competition and starts growing by an average of the now fully created industry. 5. Deceleration / Decline phase: the falls in demand do to innovation in other products from other companies or industries. This life cycle can be effective to security analysis or to investors because they know when it is wise to invest, knowing that a company will grow, so will its market cap. It is not always 100% effective do that it is difficult to know when innovation will strike and one may not be prepared for the deceleration or decline phase. 2. P/E Ratio: The price/earnings ratio, or multiplier approach, may be used for stock valuation. Explain this process and describe how the "multiplier" varies from the one available...
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..."Which Valuation Metrics Work Best for Stock-Picking Within the Sector?" FIN630 Section 9044 Professor John Halstead October 30, 2011 Overview The article entitled “Which Valuation Metrics Work Best for Stock-Picking Within the Sector?” studies the effectiveness of several market valuation multiples in predicting outperformance of regulated utility stocks relative to the industry as well as the S&P 500 index from 1972 to 2010. The study that was conducted utilizes a database of financial information on publicly traded regulated utility stocks. “The initial source for the universe of firms was from FactSet, and consisted of all publicly traded stocks, that were classified as "Electric Utilities" under the Fact Set industry classification scheme.” FactSet is a company that provides computer-based financial data and analysis for financial professionals on global markets, public and private companies. The study started in 1972 with 80 publicly traded regulated utilities and ends in 2010 with 41 active regulated utilities. “This drop in the number of publicly traded regulated utilities over the last 40 years largely reflects the consolidation wave of the late 1990s and early 2000s, as well as the impact of deregulation during this period.” Black Book (2011). Methodology At the end of each month during the period of 1972-2010, we ranked the universe of regulated utility stocks were ranked on the basis of the following eight valuation metrics, and then sorted the...
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