CHAPTER 11 Corporations: Organization, Share Transactions, Dividends, and Retained Earnings ASSIGNMENT CLASSIFICATION TABLE Brief Exercises Do It! Exercises 1, 2, 3, 4, 5, 6 1 1, 2 1, 2 Record the issuance of ordinary shares. 7, 8, 9, 10, 11 2, 3, 4 3 *3. Explain the accounting for treasury shares. 12, 13, 14 5 4 *4. Differentiate preference shares from ordinary shares. 15 6 *5. Prepare the entries for cash dividends and
Words: 13817 - Pages: 56
Corporate Finance Lecture Note Packet 2 Capital Structure, Dividend Policy and Valuation B40.2302 Aswath Damodaran Aswath Damodaran! 1! Capital Structure: The Choices and the Trade off Neither a borrower nor a lender be Someone who obviously hated this part of corporate finance Aswath Damodaran! 2! First Principles Aswath Damodaran! 3! The Choices in Financing There are only two ways in which a business can make money.
Words: 18877 - Pages: 76
VALUATION Outline Page Valuation overview 1 DCF valuation 7 47 Comparable transactions analysis 59 LBO analysis 68 Appendix VALUATI O N Comparable companies analysis 74 VAIDYA NATHAN 1 Overview “Price is what you pay. Value is what you get” VALUATI O N O V E R VI EW Value ! Price Do not confuse Price and Value. They are not the same If the Price paid is less than the Value derived, it’s a good investment VAIDYA NATHAN
Words: 11608 - Pages: 47
Aswath Damodaran 1 VALUATION Cynic: A person who knows the price of everything but the value of nothing.. Oscar Wilde First Principles 2 Maximize the value of the business (firm) The Investment Decision Invest in assets that earn a return greater than the minimum acceptable hurdle rate The Financing Decision Find the right kind of debt for your firm and the right mix of debt and equity to
Words: 7160 - Pages: 29
Jamie Lyons Finance W2 4-1 Questions Annuity-A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years. Lump-sum payment- A one-time payment for the total or partial value of an asset. Cash flow- A revenue or expense
Words: 733 - Pages: 3
Chapter 12 Leverage and Capital Structure Solution to Problems P12-1. LG 1: Breakeven Point–Algebraic Basic FC (P − VC) $12, 350 Q= = 1, 300 ($24.95 − $15.45) Q= P12-2. LG 1: Breakeven Comparisons–Algebraic Basic (a) Q = FC (P − VC) Q= Q= Q= $45, 000 = 4, 000 units ( $18.00 − $6.75) $30, 000 = 4, 000 units ( $21.00 − $13.50 ) $90, 000 = 5, 000 units $30.00 − $12.00 ) ( Firm F: Firm G: Firm H: (b) From least risky to most risky: F and G are of equal risk, then H. It is important to
Words: 5363 - Pages: 22
Financial Audit Liquidity: Ben & Jerry’s seem to have low risk compared to the industry standards; they have no trouble meeting short-term obligations. The CR (B&J = 3.59; I =2.3) and QR (B&J = 2.66. I =1.1) show that they are currently at a lower risk than the overall industry. However, this difference is explained when looking at accounts receivable. It seems as though the A/R collection days are much higher than the industry (B&J =29.2, I =16.4). This may be a result of Ben & Jerry’s having
Words: 895 - Pages: 4
Lesson # 1 Financial Management: Introductory Notes and Words Concepts of Finance and Financial Management Financial Management refers to the proper management of finance functions of an enterprise or organization. In other words, financial management is concerned with the financial decision-making and other financial aspects. Thus, financial management involves financial planning, financial organization, financial coordination and control, financial reporting, financial mergers, combinations
Words: 2347 - Pages: 10
percent return plus its share of the remaining equity while the common stock gets little or nothing, the directors may be sued personally for breach of fiduciary duty.(website: http://apps.americanbar.org/buslaw/blt/2003-05-06/blomberg.html) In this case, capitalization consist of multiple series of preferred stock while founders held the common stock, therefore it will be hard to secure financing. At first, two engineers invest $60000 to found the Alantec Company. However, within six months, they
Words: 278 - Pages: 2
Arceneaux Determining Financial Viability When it comes to finance and accounting they are both part of the financial form of a business. These two departments deal with finances in different ways. Accounting mainly deals with examining and preparing financial records and making sure their accurate, that their taxes are paid properly and in a timely manner, and to ensure that all financial operations are ran efficiently. Then again, finance handles primarily with making important financial decisions
Words: 377 - Pages: 2
