$20 Bonus + 25% OFF
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!
Add File

Error goes here

BUS704 Corporate Finance

tag 0 Download4 Pages / 904 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT


“One of the most important aspects to project evaluation is to make a correct estimate of the discount rate.”Explain how the “discount rate” is derived and assess its significance in relation to other factors that are also important to project evaluation.Mustang Ltd. Is evaluating an i) extra dividend, and ii) a share repurchase.In either case, $13,325 would be spent.Current earnings are $4.25 per share, and the share sells for $116. There are 5125 shares outstanding.
Ignore taxes and other transaction fees and charges in answering the following questions.

a. Evaluate the two alternatives [i) and ii)] in terms of the effect on the price per share and on shareholder wealth.
b. What will be the effect on Mustang’s earnings per share EPS and the price-earnings ratio under the two different scenarios [i) and ii)]
c. In the real world, which of these two actions [i) or ii)] would you not recommend
d. “A company’s dividend policy is not as important as its capital structure policy.” Discuss.

Helena’s Health Foods
Earnings before interest ($) 20,000
Market value of debt ($) 58,000
(%) 5.5%
(%) 13%
Market value of equity ($) 143,818
Actual Total market value ($) 201,818
Equilibrium value 181,818

A second company, La Salle Health Foods, has the same financial information as Helena’s Health Foods, except that La Salle Health Foods has no debt and has an equilibrium value of $166,667 and a Cost of equity of 12%.According to Modigliani and Miller, the total market value of the two companies should be the same irrespective of the methods used to finance their investments.

a. Suppose you hold 2% of the shares Helena’s Health Foods. Show the process and the amount by which you could increase your income without increasing your risk.
b. What are the potential advantages and disadvantages to a company’s owners if the company increases the proportion of debt in its capital structure

a. On 30 September 20XX, the quoted price on the December 20XX 90-day bank bill futures contract was 93.67. Connor believed that interest rates would rise over the next month. Suppose that he committed to five contracts on 30 September 20XX and closed out his position on 31 October 20XX at a price of 92.46.Ignoring transaction costs, how much has Connor made or lost Assume a Face Value of $1 million Australian.

b. On 10 October 20XX, the December 20XX 10-year bond futures contract was priced at 94.685. Milly believed that interest rates would fall. Suppose she took possession of two contracts on 10 October and closed out her position on 12 October at a price of 96.020.Ignoring transaction costs, how much has Milly made or lost in total Assume a Face Value of $100,000 (Australian) and $3,000 interest per half year.

c. On 30 September 20XX, the December 20XX SPI 200 futures contract was priced at 5350.0. Michelle believed the share market was likely to rise over the next month. Suppose she committed to five contracts on 30 September and closed out her position on 31 October at a price of 5480.0.Ignoring transaction costs, how much has Michelle made or lost Please refer to the textbook for the pricing formula.

d. Explain the key determinants of futures prices and explain the factors that may cause the futures market price at maturity, to be different from the spot market price at that same date.

Norton Ltd. shares are trading at $24 each. Its directors have announced a 1-for-4 rights issue with a subscription price of $21.10 per share.
a. Calculate the theoretical value of a right to one new share
b. Calculate the ex-rights price and the amount of right per share.
c. In theory, what would happen if the subscription price were $26.00
d. In theory, what is the minimum possible subscription price
e. “If a company undertakes a rights issue it will always cause the value of the investor’s shareholding in that company to reduce.” Discuss.

Describe and evaluate the range of agency relationships that exist for an incorporated entity. To what extent do these relationships add value to the incorporated entity.
Download Sample Now

Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.

Unique Document

Under Evaluation

Get Money
into Your Wallet

Total 4 pages, 1 USD Per Page

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2021). Corporate Finance. Retrieved from https://myassignmenthelp.com/free-samples/bus704-corporate-finance/subscription-price.html.

My Assignment Help (2021) Corporate Finance [Online]. Available from: https://myassignmenthelp.com/free-samples/bus704-corporate-finance/subscription-price.html
[Accessed 23 September 2021].

My Assignment Help. 'Corporate Finance' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/bus704-corporate-finance/subscription-price.html> accessed 23 September 2021.

My Assignment Help. Corporate Finance [Internet]. My Assignment Help. 2021 [cited 23 September 2021]. Available from: https://myassignmenthelp.com/free-samples/bus704-corporate-finance/subscription-price.html.

With time, MyAssignmenthelp.com has become one of the best college essay writing services. Our all rounded services give students the confidence to overcome assignment related issues. Our services are fast enough to meet most urgent deadlines. We are capable of delivering fast essay writing services with the help of our specially designed provisions and writers' teams. Our urgent essay help services guarantee most rapid delivery of assignment solutions. Some of our most popular essay services are application essay help, exploratory essay help, literary review essay help and argumentative essay help.

Latest Finance Samples

FNSACC503 Manage Budgets And Forecasts

Download : 0 | Page : 1

Answer: In the books of Capricorn Ltd. Cash Flow Statement for the period ended on 30/06/2015 Particulars Amount Cash Sales $4,763  Cash Receipt from Customers $17,649  Payment to Suppliers ($9,635) Rent Paid ($520) Wages ($364) Long Service Leave Paid ($25) GST Received $262  GST Paid ($184) Payment of Operating Expenses ($371) Income Tax Paid (...

Read More arrow

FIN30013 International Trade And Finance

Download : 0 | Pages : 21

Answer: Introduction Globalization provides opportunities to countries to grow and compete in an international platform. It creates a broader opportunity for less developed and emerging countries to grab the benefits of a wider market and stimulated world demand. Developing countries often suffer from a lack of capital flows in several industries and this prevents them from fully explored their capacities. With globalization industries operat...

Read More arrow Tags: Australia Raby 6 Economics Assignment Swinburne University of Techology 

FNCE100 Corporate Finance

Download : 0 | Pages : 6

Answer: Wal-Mart is a business organization working in service industry. Walmart has stores all over the country providing services 2 millions of customers. It is a largest retailer in the world having millions of customer every week. In the present case cash flow statement of the company for the year 2016 and 2017 is given. From the year and it cash flow statement of the company the inflow and outflow of cash is provided. Indirect method has ...

Read More arrow Tags: Saudi Arabia Alhambra Economics Cash Flows Resource Alhambra University MBA 

FNCE100 Corporate Finance

Download : 0 | Pages : 3

Answer Financial Analysis of Harley Davidson: This company is the manufacturer of the motor cycle. The company is having very advanced manufacturing plants across the world but the company’s performance as far as financials are concerned is not bright. First, let’s discuss the profitability ratios of the company of last three years: Profitability Ratios:  means the percentage at which the company is earning a profit. Higher ...

Read More arrow Tags: Australia Amityville Management Case Project Management University of Sydney MBA 

HS 300 Financial Planning

Download : 0 | Pages : 4

Answer Memo  From: Victor O.B Abejide Subject: High Net worth Planning Dear Jane I intend to make use of this medium to discuss on the issues of High Net worth planning and provide you with some useful tips as it deems fit. Considering your situation on the premise that you are the resident of Texas the issues are discussed below; Section 1: Issues What is that tax implication of withdrawing out from the qualified retirement plan ...

Read More arrow Tags: Australia Plano Management University of New South Wales Masters in Business Administration 

5% Cashback

On APP - grab it while it lasts!

Download app now

*Offer eligible for first 3 orders ordered through app!

callback request mobile
Have any Query?