How do you reconcile the empirical findings with the CAPM theory? 3. Discuss DF A ’ s trading strategy. How does it work, and what are the costs and benefits? Can DF A keep the competitive advantage in the future?
30 Be sure to provide a comparative analysis of ratios and EVA 6. How is EVA calculated? What does the stock-price performance tell you? Describe how EVA is estimated, and its strengths and weaknesses as a measure of performance. What does it reveal?
Quantifying the impact of those projections enables management, the board of directors, and current and prospective shareholders and lenders to: 1. Assess whether the strategic and operational plans reflected in the projected sales and costs will achieve the desired financial results in terms of profitability, liquidity, and solvency. This assessment is aided by performing a ratio analysis based on the pro forma statements. 2. Determine whether equity and/or debt financing will be required to purchase capital assets and/or to fund larger scale operating requirements, and to determine whether the entity will be able to make the associated dividend payments and loan repayments.
Cash transactions from op, fin and inv o Were any stock options exercised? In which financial statement did you find this information? What are the components of this financial statement? Using the Statement of Cash Flow we can see that proceeds from the exercise of stock options totaled $1,826,816. The components of the statement of cash flow shows how changes in balance sheet and income accounts affect cash and cash equivalents, and breaks the analysis down into operating, investing, and financing activities.
C. What information about securities must companies disclose? Discuss how Merliss should report the proposed preferred stock issue. a. Dividend and liquidation preferences b. Participation rights c. Call prices and dates d. Conversion rates and dates e. Exercise prices and dates f. Sinking-fund requirements g. Unusual voting rights h. Contracts to issue additional shares i.
When a corporation sells treasury stock below its cost, it usually debits the difference between cost and selling price to Paid-in Capital from Treasury Stock. F11. Participating preferred stock requires that if a company fails to pay a dividend in any year, it must make it up in a later year before paying any common dividends. T12. Callable preferred stock permits the corporation at its option to redeem the outstanding preferred shares at stipulated prices.
1. Purchasers of stock options A) own a financial asset with benefits of firm ownership. B) have a claim on the profits of the firm issuing the underlying securities. C) have the obligation to buy or sell a predetermined amount of shares at the strike price. D) have the right to buy or sell a certain number of underlying shares.
Income statement, or profit-and-loss statement, measures flows of costs, revenue, and profits over a defined period of time. It allows you to judge whether the company is spending too much on particular expenses, and to see whether they are turning a profit for a specific time of period. To complete the general view of financial state of the company, it is better to accompany the study of income statement with balance sheet. The balance sheet provides a snapshot of business investment and financing at a particular point of time. Both statements combine to provide a rich picture of a business’ financial performance.
The article refers to the various sovereign rating changes that have recently occurred. Pick any of these countries and explain the reasoning behind it. Were the rating changes justified and do they impact on the financial markets? Syndicate 2 1. What special role do CRAs play in financial markets and how successful have they been?
Why would a company issue stock? 33. Why is issuing stocks a popular way for companies to earn money? 34. What is the rule of thumb in regards to return and risk?