...This study material is copyright and is sold for the exclusive use of the purchaser. You may not hire out, lend, give out, sell, store or transmit electronically or photocopy any part of it. You must take care of your material to ensure that it is not used or copied by anybody else. By opening this pack you agree to these conditions. The Actuarial Education Company © IFE: 2011 Examinations All study material produced by ActEd is copyright and is sold for the exclusive use of the purchaser. The copyright is owned by Institute and Faculty Education Limited, a subsidiary of the Faculty and Institute of Actuaries. You may not hire out, lend, give out, sell, store or transmit electronically or photocopy any part of the study material. You must take care of your study material to ensure that it is not used or copied by anybody else. Legal action will be taken if these terms are infringed. In addition, we may seek to take disciplinary action through the profession or through your employer. These conditions remain in force after you have finished using the course. © IFE: 2011 Examinations The Actuarial Education Company CT2: Assignment X1 Solutions Page 1 Assignment X1 Solutions Answers to multiple-choice questions The following table gives a summary of the answers to the multiple-choice questions. The answers are repeated below with explanations. 1 2 3 4 5 B B C B B 6 7 8 9 10 D C B C D...
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...Approaches to Equity in Policy for Lifelong Learning Ben Levin1 A paper commissioned by the Education and Training Policy Division, OECD, for the Equity in Education Thematic Review August 2003 EQUITY IN EDUCATION The opinions expressed in this paper are the sole responsibility of the author and do not necessarily reflect those of the OECD or of the governments of its Member countries. 1 . Ben Levin, Ph D, The University of Manitoba, Winnipeg, Canada. TABLE OF CONTENTS TABLE OF CONTENTS................................................................................................................................ 2 APPROACHES TO EQUITY IN POLICY FOR LIFELONG LEARNING ................................................. 3 Origins of this report ................................................................................................................................... 3 Summary of the report................................................................................................................................. 3 PART 1 – THINKING ABOUT EQUITY IN LIFELONG LEARNING ...................................................... 5 A definition of equity? ................................................................................................................................ 5 The importance of equity ............................................................................................................................ 5 Current status of equity ......
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...in the same line of business is likely to have risk equal to the average risk of the business. The theme park will likely be sensitive to the growth of the Chinese economy. Its market risk may be very different from GE’s other division, and from the company as a whole. It would not be appropriate to assume this investment as risk equal to the average risk of the firm. d. GE decides to open a new Universal Studios theme park in China. a. b. c. d. 18-2. Suppose Caterpillar, Inc., has 665 million shares outstanding with a share price of $74.77, and $25 billion in debt. If in three years, Caterpillar has 700 million shares outstanding trading for $83 per share, how much debt will Caterpillar have if it maintains a constant debt-equity ratio? E = 665 million × $74.77 = $49.7 billion, D = $25 billion, D/E = 25/49.722 = 0.503. E = 700 million × $83.00 = $58.1 billion. Constant D/E implies D = 58.1...
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...system * Command system TEN PRINCIPLES: GROUPS A. How households (people) make decisions B. How households (people) interact C. How the economy as a whole works A. How households make decisions: 1. People face trade-offs: a. Personal—doing more of one activity and doing little to none of another activity b. Production—producing more of one good and producing less of another good Most money spent towards: * Defense * Social security * medicare c. Efficiency/Equity—society chooses b/w being efficient or equity; more efficiency= less equity ~ more equity= less efficiency * Efficiency—exists when the society gets the most from its resources * Equity—exists when societies output is distributed fairly among its members * Redistribution: among members of society, i.e, social security (OASDI), unemployment, welfare (TANF= food stamps, housing), compensation 2. Opportunity cost: : What you give up to get more of something (can put an actual value or measure on action) What you give up: (if you start your own business) . Income given-up >> $50,000/yr . Interest given-up >> $5,000/yr . Rental income given up>> $12,000/yr $ 67, 000/yr 3. Rational People Think at the...
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...Managing Human Resources Course Code: 4200 Chapter One: The World of Human Resource Management pages 1-28 Human resource management (HRM) The process of managing human talent to achieve an organization’s objectives Human capital: The knowledge, skills, and capabilities of individual that have economic value to an organization. Skills that people bring with them Six Sigma: A set of principles and practices whose core ideas include understanding customer needs, doing things right the first time and striving for continuous improvement Reengineering: rethinking and radical redesign of business processes to achieve dramatic improvement in cost , quality, services and speed Outsourcing: contracting outside work that was formerly done by employees inside the company Change management: bring about and managing change at both the organizational and individual level Proactive Change: Change initiated to take advantage of targeted opportunities Globalization: Opening up foreign markets to international trade and investment Reactive Change: Change that occurs after external forces have already affected performance Corporate Social: The responsibility of the firm to act in the best interests of the people and communities affected by its activities Collaborative Software: Software that allows workers to interface and share information with one another electronically Human Resource Information System:...
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...What is pay equity? The definition of pay equity is really equal pay for equal work or in other words a man and a woman should get the same pay for the same job. This is not always the case for women. Unions have been an asset to the female work force because the wages are set by the union for the job duties performed, not by who performs them. Women often are in administration jobs with a great amount of responsibility, but are often under paid as compared to a man with similar responsibilities. By enforcing pay equity laws, an employer will create a productive workforce among all employees. In the Canadian workplace employees can value equity in different ways. They can compare their job to similar jobs within the same department, or compare their job to different jobs within the same workplace. Therefore, the equity or pay they receive can make the employee satisfied or dissatisfied depending on their view of the job they perform. Also, employees can compare their equity to others in another company who do similar jobs or others who are in the same union or profession. To an employer equity can be compared in four categories: external equity, internal equity, individual equity and personal equity. External equity is when an employer pays wages comparable to similar companies doing the same jobs. There are many factors involved in this type of comparison. The factors can be geographic location, organization size, unions, industry sector, competition in the...
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...Introduction 3. A firm’s current balance sheet is as follows: Assets - $100 Debt $10 Equity $90 Question 3a. What is the firm’s weighted cost of capital at various combinations of debt and equity, given the following information? Debts/Assets After Tax Debt Cost Cost of Equity Cost of Capital (weight)(cost of debt) weight (cost of equity) = k (cost of capital) 0% 8% 12% 10 8 12% 20 8 12% 30 8 13% 40 9 14% 50 10 15% 60 12 16% Answer – Debts/Assets After Tax Debt Cost Cost of Equity Cost of Capital (weight)(cost of debt) weight (cost of equity) = k (cost of capital) 0% (.0)(.08) (1.0)(.12) 12.0 % 10% (.1)(.08) (.9)(.12) 11.6 % 20% (.2)(.08) (.8)(.12) 11.2% 30% (.3)(.08) (.7)(.13) 11.5% 40% (.4)(.09) (.6)(.14) 12.0% 50% (.5)(.10) (.5)(.15) 12.5% 60% (.6)(.12) (.4)(.16) 13.6% Question 3b. Construct a pro forma balance sheet that indicates the firm’s optimal capital structure. Compare this balance sheet with the firm’s current balance sheet. What course of action should the firm take? CURRENT BALANCE SHEET PROFORMA BALANCE SHEET Assets - $100 Assets - $100 Debt $10 Debt $20 Equity $90 Equity $80 The optimal capital structure is “the unique capital structure that minimizes the firm’s composite cost of long-term capital” (Keown, et.al. 2005). The debt is 20% of the capital and the cost of capital is 11.2%, as shown, highlighted, on the Performa balance sheet (#3a) above. In this...
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...HIGHER EDUCATION IN INDIA: ISSUES, CONCERNS AND NEW DIRECTIONS UNIVERSITY GRANTS COMMISSION NEW DELHI December 2003 HIGHER EDUCATION IN INDIA ISSUES, CONCERNS AND NEW DIRECTIONS RECOMMENDATIONS OF UGC GOLDEN JUBILEE SEMINARS- 2003 HELD AT ELEVEN UNIVERSITIES IN INDIA UNIVERSITY GRANTS COMMISSION, NEW DELHI December 2003 (i) © 2003, The University Grants Commission Editorial Committee (Names of members, preferably in alphabetical order to be given) Printed and published by the Secretary, UGC For the University Grants Commission, Bahadur Shah Zafar Marg, New Delhi 110 002, India; Printed at……………………… (ii) Foreword The higher education system in India has grown in a remarkable way, particularly in the post-independence period, to become one of the largest system of its kind in the world. However, the system has many issues of concern at present, like financing and management including access, equity and relevance, reorientation of programmes by laying emphasis on health consciousness, values and ethics and quality of higher education together with the assessment of institutions and their accreditation. These issues are important for the country, as it is now engaged in the use of higher education as a powerful tool to build a knowledge-based information society of the 21st Century. Recognizing the above and the basic fact, that the Universities have to perform multiple roles, like creating new knowledge, acquiring new capabilities and producing an intelligent human resource...
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...TYPES AND SOURCES OF CORPORATE DEBT AND BOND COVENANTS Corporate debts may be short term or long term in nature. Short - term debts are incurred by the company in relation to its supplies of raw materials categorized as accounts payables and are normally paid within the accounting cycle or within one year. In the balance sheet, they fall under the current liabilities. These are supposed to be financed through the company’s current assets. Long term debts are those acquired by the company from banks and through issuance of bonds. For loans from banks, the requirements of the lenders are normally: evidences of the company’s sound financial standing as reflected in its financial statements, effective management, nature of products (quality), and good track record of credit relationship with other fund providers. At times, they must be backed by collaterals. Another option by which a company acquires addition funds is to issue bonds. This is a long term obligation of the company (issuer) to the bondholder to pay fixed interest rates periodically until the maturity date when the company must have to return the par value to the bondholder and terminates or redeem the bond. Hence, the financial obligation of the issuer or the company who opted to issue bonds for additional funds are: periodic fixed interest payments until the maturity date and the payment of the par value of the bond on the maturity date. The income of the bondholder is the periodic interest received (for coupon...
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...bodies and in particular the European Union, Council of Europe and UNESCO. Introduction This term paper aims at providing clear guidance on making higher education a social inclusive activity. The social dimension is important to ESIB as still too many capable students are excluded from the higher education system due to their background, insufficient study support systems or other barriers. Five steps will be proposed to reach one final goal: creating a higher education community that is based on fairness and quality. Definitions Widening access: An umbrella term for the efforts of higher education institutions, governments and others to increase the participation in higher education, especially for underrepresented groups. This includes internal and curricular reform, affirmative action, promoting, the use of qualifications frameworks, etc. Equity of access: The ultimate goal of attempts to widen access or to utilize affirmative action tools. Equity of access represents the idea that all have a right to higher education, and that all barriers (whether formal or informal, visible or invisible, theoretical or practical, legal or local) must be progressively eliminated. Affirmative action: Official policies that attempt to achieve a more equitable representation of underrepresented groups; in the case of higher education, typically through amendments to admissions practices, scholarships, and in relation to employment decisions to counter discrimination against those...
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...Effects of allowance Efficiency considerations While the scheme is efficient in that it does encourage access to tertiary education through breaking barriers concerned with cost of tertiary education, there are some efficiency considerations concerned to the provision of student allowances which need to be addressed. Due to the fact that once the student earns over $195.78, the student allowance payment is abated at one dollar per dollar earned acts as a disincentive for the student to partake in paid work, in order to receive ‘free’ money. As well as this, it may encourage the student to find work which can be paid under-the-table, so as to have access to more money on a weekly basis. Rather than ensuring that the allowance helps those who do not have access to enough income to support themselves while studying, it rather recommends that the student limits their hours of paid work in order to receive the same amount of money as someone who may have to work to receive it. Being that the student allowance is based on the income of the parents for under 25 year olds, efficiency is also compromised as it allows for some students whose parents are self employed to receive the benefit, through the parents ability to ‘hide’ their actual income; which does tend to occur.[9] The result of this is that a proportion of the students receiving the allowance on the premise that they are from a lower income background, are actually made better off than many of those who, not only do not...
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...Valuing Coca-Cola Using The Free Cash Flow To Equity Valuation Model John C. Gardner, University of New Orleans, USA Carl B. McGowan, Jr., Norfolk State University, USA Susan E. Moeller, Eastern Michigan University, USA ABSTRACT In this paper, we provide a detailed example of applying the free cash flow to equity valuation model proposed in Damodaran (2006). Damodaran (2006) argues that the value of a stock is the discounted present value of the future free cash flow to equity discounted at the cost of equity. We combine the free cash flow to equity model with the super-normal growth model to determine the current value of Coca-Cola. At the time of this paper, we determined a value of Coca-Cola at $161 billion using the free cash flow to equity model, and the actual market value of Coca-Cola was $150 billion. Keywords: Coca-Cola; Free Cash Flow to Equity; Equity Valuation; Super-normal Growth Model CORPORATE FINANCIAL MANAGEMENT AND STOCK VALUATION C orporate financial management encompasses the efficient acquisition and allocation of funds. The objective of corporate financial management is to maximize the value of the firm. Solomon (1963, page 22, Chapter II) argues that wealth maximization should be the goal of corporate financial management because this criterion maximizes the wealth of the owners of corporations and maximizes the wealth of a society by maximizing economic output. The value of the firm is measured by the market capitalization of the firm. The...
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...Henderson Company: DeVry Education Group Inc. (DV) Price on report date: $35.73 on March 20, 2015 Forecast Horizon: 1 year Recommendations: BUY Target forecasted price: $42.19 Highlights: * DeVry provides services educational development worldwide. * DeVry Educational Group operates three segments: Medical and Healthcare; International and Professional Educational; and Business, Technology and Management. * DeVry saw strong growth during the worldwide recession. * Company has strategically reduced its operating cost in segments that have seen either small improvement or losses in enrollment. * Company has strategically transitioned to support its Medical and Healthcare segments which has seen strong growth potential. * Risk factors include enrollment and public relations as the company has endured numerous class action lawsuits resulting from student dissatisfaction with curriculum content. Summary of Analysis: * Market Capitalization: $2.2 Billion on March 20, 2015 * Cash: 369.98M * Free Cash: $187.53M based on 4th Quarter of 2014 reported data * Last 12 months revenue: $1.92B * Operating Cash Flow: 266.89M * Dividends: N/A Qualitative Analysis Company Profile: What services and products do they sell and/or manufacture? DeVry Education Group is a corporation based in Downers Grove, Illinois. It was founded in 1931and it presently operates a number of for-profit higher education institutions, worldwide....
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...INVESTMENT STRATEGY AND PORTFOLIO MANAGEMENT Executive Summary Kaplan is a charitable fund established in 2007 to provide an investment vehicle for investors seeking to finance some educational objectives. The aim of the fund is to grow members’ contributions through investment in securities. Investors in Kaplan are yet to start making withdrawals from the fund but are due to begin in June 2012. This report looks at current issues in the investment environment in the UK, Europe, and the rest of the world which have an impact on Kaplan’s operations. It also examines strategic asset allocation and investment strategies that Kaplan should employ to achieve its goals. In addition, the report recommends areas in which the fund’s management should actively manage investments and those areas in which passive management would be the better option. Overview of the Investment Environment In recent years, the global fund sector has continued to register robust growth in many countries with developed financial markets. Collective investment schemes are becoming the most preferred investment vehicles for investors because of their obvious advantages including diversification, professional management of investments, liquidity and investment advice for investors and superior returns (Roll, 2008). Indeed, as by the end of 2011, the global investment fund industry was worth US $11.7 trillion which translates to 17 percent of primary securities holdings around the world. However...
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...Instructor’s Manual Fundamentals of Financial Management twelfth edition James C. Van Horne John M. Wachowicz JR. ISBN 0 273 68514 7 Pearson Education Limited 2005 Lecturers adopting the main text are permitted to photocopy the book as required. © Pearson Education Limited 2005 Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsoned.co.uk Previous editions published under the Prentice-Hall imprint Twelfth edition published under the Financial Times Prentice Hall imprint 2005 © 2001, 1998 by Prentice-Hall, Inc. © Pearson Education Limited 2005 The rights of James C. Van Horne and John M. Wachowicz JR. to be identified as authors of this work have been asserted by them in accordance with the Copyright, Designs and Patent Act 1988. ISBN: 0 273 68514 7 All rights reserved. Permission is hereby given for the material in this publication to be reproduced for OHP transparencies and student handouts, without express permission of the Publishers, for educational purposes only. In all other cases, no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road...
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