Thư viện tài liệu, ebook tham khảo dành cho học sinh, sinh viên

More risky; company not required to pay preferred dividend. However, firms want to pay preferred dividend. Otherwise, (1) cannot pay common dividend, (2) difficult to raise additional funds, and (3) preferred stockholders may gain control of firm.

55 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 695 | Lượt tải: 0

A*/S0: assets required to support sales; called capital intensity ratio. ∆S: increase in sales. L*/S0: spontaneous liabilities ratio M: profit margin (Net income/sales) RR: retention ratio; percent of net income not paid as dividend.

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Inventory turnover is below industry average. Firm might have old inventory, or its control might be poor. No improvement is currently forecasted.

51 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 779 | Lượt tải: 0

No. The ROIC of 0.5% is less than the WACC of 10%. Investors did not get the return they require. Note: High growth usually causes negative FCF (due to investment in capital), but that’s ok if ROIC > WACC. For example, Home Depot had high growth, negative FCF, but a high ROIC.

42 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 724 | Lượt tải: 0

During nonconstant growth, dividend yield and capital gains yield are not constant. If current growth is greater than g, current capital gains yield is greater than g. After t = 3, g = constant = 6%, so the t = 4 capital gains gains yield = 6%. Because rs = 13%, the t = 4 dividend yield = 13% - 6% = 7%.

51 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 718 | Lượt tải: 0

At maturity, the value of any bond must equal its par value. The value of a premium bond would decrease to $1,000. The value of a discount bond would increase to $1,000. A par bond stays at $1,000 if rd remains constant.

54 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 794 | Lượt tải: 0

Indifference curves reflect an investor’s attitude toward risk as reflected in his or her risk/return tradeoff function. They differ among investors because of differences in risk aversion. An investor’s optimal portfolio is defined by the tangency point between the efficient set and the investor’s indifference curve.

45 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 752 | Lượt tải: 0

Portfolio expected return (9.6%) is between Alta (17.4%) and Repo (1.7%) Portfolio standard deviation is much lower than: either stock (20% and 13.4%). average of Alta and Repo (16.7%). The reason is due to negative correlation (r) between Alta and Repo.

51 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 750 | Lượt tải: 0

Commission: fee paid to broker for making the transaction Spread: cost of trading with dealer Bid: price dealer will buy from you Ask: price dealer will sell to you Spread: ask - bid “Price Impact”– Large sales or purchase might cause prices to change. “Payment for Order Flow”– Exchange will pay brokers to direct orders to them.

20 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 794 | Lượt tải: 0

Similar to forwards, except: Marking-to-market Many more assets- agriculture, livestock, metals, indexes, currencies, interest rates, energy Standardized contracts that trade on exchanges, such as CBOT

8 trang | Chia sẻ: huyhoang44 | Ngày: 26/03/2020 | Lượt xem: 717 | Lượt tải: 0