Excerpt
Contents
1. Q1: Capital Expenditure Decisions - Dichem PLC
1.a Net Present Value (NPV) & key assumptions
1.b Working Capital, Tax Implications & View of Finance Director
1.b.i Treatment of Working Capital
1.b.ii Tax Implications of the Investment in Equipment
1.b.iii Views of the Finance Director
2. Q2: Valuing Shares - Norbut Plc
2.a Valuing Shares
2.a.i Earnings, Dividends and Investment based on McDougall’s Expectations
2.a.ii Value of Norbut Plc
2.a.iii Value of Norbut Plc attributable to Future Investment
2.a.iv Norbut Plc’s Price Earning Ratio at Zero Growth
2.b Definition of the Price-Earnings Ratio (P/E) & Primary Determinant of a company’s P/E
3. Q3: Rights Issues - Novelty Paints Plc
3.a Rights Issue
3.a.i Terms of Issue, Ex-Rights Price & Value of a Right
3.a.ii Exercise of Rights vs. Selling of Rights
3.a.iii Timing of new Issues
3.a.iv Fall in Share Price Anticipated
3.b Rights Issue - Protects Shareholder’s Interest
4. Q4: Capital Structure Decisions - Gearless Plc
4.a Debt & Equity Financing
4.a.i Calculate Earnings per Share (EPS)
4.a.ii Break-even Point - same EPS for Two Options
4.a.iii EPS as a Function of Earnings
4.b Primary Advantages & Disadvantages of using Long-term Debt for Funding
5. References
- Quote paper
- MBA Andreas Keller (Author), 2003, Finance & Financial Management, Munich, GRIN Verlag, https://www.grin.com/document/178459
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