Category: Finance

The company is somewhat unsure about the assumption of a 5.1 percent growth rate in its cash flows. At what constant growth rate would the company just break even if it still required a return of 12 percent on its investment?

Discussion Question:

NPV Valuation. The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is “looking up.” As a result, the cemetery project will provide a net cash inflow of $109,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 5.1 percent per year forever. The project requires an initial investment of $1,425,000.

a. If Yurdone requires a return of 12 percent on such undertakings, should the cemetery business be started?

b. The company is somewhat unsure about the assumption of a 5.1 percent growth rate in its cash flows. At what constant growth rate would the company just break even if it still required a return of 12 percent on its investment?

List of three services provided by your town/city and three provided by your state that directly benefit you. After thinking about how you directly pay for these do you believe you get your money’s worth?

Assignment #1
Stabilize, Distribute & Allocate
List of three services provided by your town/city and three provided by your state that directly benefit you. After thinking about how you directly pay for these do you believe you get your money’s worth?

How long would this coronavirus pandemic last? Would the general public be eager to resume traveling once the shutdowns were eased, or would consumer demand for commercial travel return slowly?

WK 1

https://sk-sagepub-com.ezproxy.umgc.edu/cases/the-oracle-of-omaha-liftoff-or-crash-landing

First, read the case The Oracle of Omaha: Liftoff or Crash Landing?

Second, answer the questions below. In your initial response to the topic you have to answer all questions:

How long would this coronavirus pandemic last? Would the general public be eager to resume traveling once the shutdowns were eased, or would consumer demand for commercial travel return slowly?

Have Southwest’s management team done a good enough job navigating the crisis so far, or have they led investors astray?

What is the long-term outlook for the airline industry, and how will its financial metrics look post-shutdown? Some metrics to focus on include total passengers, total revenue, and stock price.

In April 2020, should Buffett sell his shares in Southwest Airlines or buy further stock at the new reduced price?

How much does your company have in bonds issued? What types of bonds do have they issued? When are some of the amounts due to reach maturity?

Discussion

Discussion questions for NIKE INC.

How much does your company have in bonds issued? What types of bonds do have they issued? When are some of the amounts due to reach maturity?

What is the rating of their most recent bonds?

If interest rates are rising, how does this impact the yield of the current bond holders

 Display investment opportunity set graphically and explain implications and potential investment strategies to consider

Two Asset Portfolio

Calculate the overall portfolio standard deviation or “risk of the portfolio”
Use 10% increments for the weights of the assets

Calculate variance and standard deviation of each stock and the correlation coefficient. Your expected return in #3 is in years, and your standard deviation is in days. Convert daily standard deviation to yearly standard deviation by considering the number of days in the year

Display investment opportunity set graphically and explain implications and potential investment strategies to consider

Create an Appendix for the novice investor. Clearly explain the meaning and implication of the following key variables or equations:
• CAPM equation
• Risk-Free Rate
• Risk Premium
• Beta
• Required Rate of Return

Evaluate the efficiency of a company’s operations and the effectiveness of its pricing strategy.

7-2 Final Project Milestone Three: Investment Analysis (Section II) and Conclusion (Section VI)

Determine how much a firm made from each dollar that was converted into profits.

Evaluate the efficiency of a company’s operations and the effectiveness of its pricing strategy.

Regress the forward exchange rate on the spot exchange rate. Use the Engle-Granger approach to test for the cointegration between the spot exchange rate and the one-month forward exchange rate. What can you conclude about these two series?

Econometrics

Employ the Box-Jenkins approach, identify the ARMA form of the assigned inflation rates following the steps below:
a. Plot the correlogram of the time series.
(2 marks)

From the correlogram, propose three models AR, MA or ARMA that could potentially be suitable for this time series. Provide justification for the choices.
(10 marks)

Estimate all of the proposed models and compare their Akaike Information Criteria to identify the most suitable model for the assigned inflation rate.
(15 marks)

Apply the Fama-French 3-factor model on the log return your assigned US company. The Fama-French 3-factor model has the following form:
(1)
(10 marks)

Is Fama-French a good model for the particular stock? Explain your answer with evidence from your computation.
(5 marks)

Conduct the ARCH-LM test on the residuals of the estimation of model (1) in question 2. Report and comment on the result of the test.
(5 marks)

Estimate the Fama-French 3-factor model with GARCH(1,1) on the company stock return. Comment on the estimated result regarding the magnitude and significance of the model.
(10 marks)

Discuss if introducing GARCH(1,1) for this model is appropriate.
(5 marks)

Apply a bivariate VAR model to the monthly log return on S&P500 and the monthly log return on your given index.

Report the optimal lag-length table. What are the optimal lag lengths according to different criteria?
(3 marks)

Estimate the VAR model with [the number of lags assigned to you] to the log monthly return on S&P500 and the log monthly return on your given index. Report the estimation results. Perform a test to examine if the return on your given index Granger-causes the return on your given index. Report and comment on the test results.
(10 marks)

Regress the forward exchange rate on the spot exchange rate. Use the Engle-Granger approach to test for the cointegration between the spot exchange rate and the one-month forward exchange rate. What can you conclude about these two series?
(15 marks)

After completing the above tasks, critically reflect on the experience you had by doing this task, addressing the challenges that you have faced, how would you overcome them I the future, how the above exercises can be applied to real life problems and how it will enhance your personal skills developing you as one of the potential tomorrow global leaders.
(10 marks)

What are the main sources of such capital, and how evolving are these sources?How does the issue of debt (if any) /bank loan affect the firm’s coverage ratio?

Corporate Finance

What are the main sources of such capital, and how evolving are these sources?

How does the issue of debt (if any) /bank loan affect the firm’s coverage ratio?

How company’s investments in tangible vs. intangible assets are changing?

The efficiency of investment – contribution to the cash flow stream, profitability, and market performance and announcement effect (if any) of such investment decision.Does current practices help the firm in solving
agency problem?