Difference between capitalization and their book value
Is the difference for the value creation in a company among the market value of the shares (capitalization) and their book value a good measure since its foundation?
Expert
No. Value creation in an era is the difference between the return to shareholders and the needed return multiplied by the capitalization at the starting of the period.
Why can we not compute the required return (Ke) by the Gordon-Shapiro model [P0 = Div0 (1+g) / (Ke – g)] in place of using the CAPM? As we identify the current dividend (Div0) and the current share price (P0), we can acquire the growth rate of the dividend by th
Which currency has to be utilized in an international acquisition in order to compute the flows?
Assume that you have $50,000 which you want to invest in two companies, XYZ Books and ABC Audio. XYZ has a return of 10% and standard deviation 15%, while ABC has return of 15% with a standard deviation of 20%. The correlation coefficient between them is .5. Your port
Does the book value of the debt all the time coincide with its market value?
Capital formation: It is an increase in the stock of capital in particular period is termed as capital formation.
The part of the net income which is not distributed to shareholders goes to reserves (to shareholders’ equity). As dividends shows real money, reserves are real money as well. Is it true?
When valuing the shares of my company, I calculate the present value of the expected cash flows to shareholders moreover I add to the result obtained cash holdings and liquid investment. Is that correct?
ABC Company plans to buy back 1 million shares of its own stock from its cash reserves at $50 a share. This will raise the bankruptcy costs by $10 million, and the debt/assets ratio from 35% to 40%. The income tax rate of the company is 30%. Determine the value of the
What is a 3 x 1 Split?
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