Finance & Financial Management

Managing Financial Resources

Dossier / Travail , 2003 , 28 Pages , Note: 1.2

Economie politique - Finances

Managing Financial Resources

Q1: Capital Expenditure Decisions – Dichem PLC
Q2: Valuing Shares – Norbut Plc
Q3: Rights Issues – Novelty Paints Plc
Q4: Capital Structure Decisions – Gearless Plc

Inhaltsverzeichnis (Table of Contents)

• Q1: Capital Expenditure Decisions - Dichem PLC.
  • Net Present Value (NPV) & key assumptions
  • Working Capital, Tax Implications & View of Finance Director..
    • Treatment of Working Capital
    • Tax Implications of the Investment in Equipment........
    • Views of the Finance Director.
• Q2: Valuing Shares - Norbut Plc
  • Valuing Shares
    • Earnings, Dividends and Investment based on McDougall's Expectations.
    • Value of Norbut Plc
    • Value of Norbut Plc attributable to Future Investment.
    • Norbut Plc's Price Earning Ratio at Zero Growth...
  • Definition of the Price-Earnings Ratio (P/E) & Primary Determinant of a company's P/E .......
• Q3: Rights Issues - Novelty Paints Plc..
  • Rights Issue
    • Terms of Issue, Ex-Rights Price & Value of a Right.
    • Exercise of Rights vs. Selling of Rights....
    • Timing of new Issues.
    • Fall in Share Price Anticipated...........
  • Rights Issue - Protects Shareholder's Interest.
• Q4: Capital Structure Decisions - Gearless Plc
  • Debt & Equity Financing.
    • Calculate Earnings per Share (EPS)......
    • Break-even Point - same EPS for Two Options ........
    • EPS as a Function of Earnings..\li>
  • Primary Advantages & Disadvantages of using Long-term Debt for Funding.
• References.

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

The assignment aims to analyze and evaluate various financial management concepts and their applications in real-world business scenarios. The focus is on understanding the decision-making process within a business context, considering various aspects like capital expenditure, share valuation, rights issues, and capital structure.

• Capital Expenditure Decisions
• Share Valuation
• Rights Issues
• Capital Structure Decisions
• Financial Analysis and Evaluation

Zusammenfassung der Kapitel (Chapter Summaries)

• Q1: Capital Expenditure Decisions - Dichem PLC. This chapter focuses on the analysis of a capital expenditure decision for Dichem PLC, exploring the net present value (NPV) method and the key assumptions involved in the calculation. It further examines the treatment of working capital, tax implications, and the Finance Director's perspective on the investment proposal.
• Q2: Valuing Shares - Norbut Plc. This chapter deals with the valuation of shares for Norbut Plc. It analyzes earnings, dividends, and investment expectations based on McDougall's model, determining the value of the company and the portion attributable to future investment. Additionally, it explores the price-earnings ratio (P/E) and its significance in valuing shares.
• Q3: Rights Issues - Novelty Paints Plc. This chapter examines the rights issue process for Novelty Paints Plc, analyzing the terms of issue, the ex-rights price, and the value of a right. It further discusses the options for shareholders regarding exercising or selling their rights and the implications for share price. The chapter also delves into the benefits of rights issues in protecting shareholder interests.
• Q4: Capital Structure Decisions - Gearless Plc. This chapter addresses the capital structure decisions of Gearless Plc, examining the financing options of debt and equity. It involves calculating earnings per share (EPS) under different scenarios and identifying the break-even point where EPS remains the same. The chapter explores the advantages and disadvantages of using long-term debt for funding.

Schlüsselwörter (Keywords)

This assignment revolves around key concepts like Net Present Value (NPV), working capital, tax implications, share valuation, price-earnings ratio (P/E), rights issues, capital structure decisions, earnings per share (EPS), and debt and equity financing. The analysis employs financial modeling techniques, considering real-world business scenarios to demonstrate the practical application of these concepts in corporate finance.

• Université: University of Strathclyde
• Note: 1.2
• Auteur: MBA Andreas Keller (Auteur)
• Année de publication: 2003
• Pages: 28
• N° de catalogue: V178459
• ISBN (ebook): 9783656004509
• ISBN (Livre): 9783656005056
• Langue: anglais
• mots-clé: finance, financial, management, managing, financial, resources