To: BKI Board of Directors From: John Smith Date: March 4th, 2011 Re: Optimal Capital Structure Recommendation Based on the financial analysis, the firm should borrow at least $50 million to repurchase 14 million shares of stock. According to a Harvard business review, it would not be rational for a public company to be funded only by equity. It's too inefficient. Debt is a lower cost source of funds and allows a higher return to the equity investors by leveraging their money. In addition
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• A field in economics, which studies the many issues arising from the separation of ownership and control. The corporate governance structure specifies the rules and procedures for making decisions on corporate affairs. It also provides the structure through which the company objectives are set, as well as the means of attaining and monitoring the performance of those objectives. Corporate
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amount of financing. 3. Based on your answers in Part 2 and the company’s financing requirements, identify and explain the company’s main source of financing. Evaluate the importance of the financing source and the effects on the company’s capital structure. Answer: PROFILE The history of the PROTASCO BHD can be traced back to the early 1990s when its founders, Dato’ Hasnur Rabiain bin Ismail and Dato’ Chong Ket Pen started in the road construction business by setting up of HCM in 1991. In
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------------------------------------------------- Portfolio management Financial Investment Danang university of economics 37k16-clc D.I.D Group Contents I. Introduction 2 II. Macro environment 3 II.1 The world macroeconomic: 3 II.2 Vietnam macroeconomic 6 III. Industrial sectors analysis 10 III.1 Tire Industry 10 III.2 Steel industry 12 IV. Company analysis 14 IV.1 Danang rubber JSC (DRC) 14 IV.2 Hoa Phat group (HPG) 19 V. Calculation 24 V.1. Rates of
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determinants of capital structure which influence the leverage ratio and the study is also proposed to find out relationship of different explanatory variables with each other whether positive or negative influence exists. The variables taken in this study are Leverage, earnings before interest and tax, business size, fixed asset, depreciation and market to book value. This study also includes expression of different economic and financial analyst about the determinants of capital structure and this study
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Unit 1 Concepts of Managerial Economics Learning Outcome After going through this unit, you will be able to: • • • • Explain succinctly the meaning and definition of managerial economics Elucidate on the characteristics and scope of managerial economics Describe the techniques of managerial economics Explain the application of managerial economics in various aspects of decision making • Explicate the application of managerial economics in marginal analysis and optimisation Time Required
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the Cost of Capital The Cost of Capital The purpose of this case is to present evidence on how some of the most financially sophisticated companies and financial advisers estimate capital costs. This evidence is valuable in several respects. First, it identifies the most important ambiguities in the application of cost-of-capital theory, setting the stage for productive debate and research on their resolution. Second, it helps interested companies benchmark their cost-of-capital estimation practices
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Financial Crises: Theory and Evidence Franklin Allen University of Pennsylvania Ana Babus Cambridge University Elena Carletti European University Institute June 8, 2009 1. Introduction Financial crises have been pervasive phenomena throughout history. Bordo et al. (2001) find that their frequency in recent decades has been double that of the Bretton Woods Period (1945-1971) and the Gold Standard Era (1880-1993), comparable only to the Great Depression. Nevertheless, the financial
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expenses, efficient allocation and use of firm assets as well as sound (positive NPV) investment decisions. • Financial market strategies involve prudent management of liabilities and optimal mix of debt and equity in funding firm operations and investments. • Finally financial market strategies require optimal distribution decisions that would balance firm’s reinvestment needs and shareholder wealth. © Dr. C. Bulent Aybar Creating Value Through Growth and Profitability Growth and Profitability
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quality of factors of production like land, labor, and capital * Companies can * lower their overall cost structure * improve the quality or functionality of their product offering * Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, and capital * Companies can * lower their overall cost structure * improve the quality or functionality of their
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