Capital market

pay as dividends is one of the crucial financial decisions the company has to take. Apart from that, the right understanding of this policy is also significant for other sectors in the financial industry like Mergers and Takeovers, the Capital Structure, the Capital Asset Pricing Model since these all depend on how and why…

1. State the Miller Modigliani (MM) dividend irrelevance proposition Modigliani and Miller (MM) proposed that in an ideally simple and perfect capital market, shareholders are indifferent between dividend and capital gains, and the value of a company is determined solely by the earning power of its assets and investments. Focuses more on firm value but not on firm risk. MM argued that if a company with investment opportunities decides to pay dividend, so that retained earnings are insufficient…

increasing the debt to equity level, it can help company to reduce the cost of capital. The reason is because when debt to equity level increases, the source of finance is more expensive, this can lead…

research The financial market plays an integral role in the world economy. This market includes foreign exchange markets, stock markets and capital markets. Of these, the stock market, which comprises various stock exchanges, plays a leading role in the function of the financial market (Dziawgo, 2012). Since there is a great number of issues such as financial crisis and recent global economic downturn, Vietnam still has heaps…

cash flow to the firm (FCFF), which is the after-tax cash flow that accrues from the firm's operations, net of investments in capital and net working capital, or we can use the free cash flow to equity (FCFE) that is the cash remaining after a firm meets all of its debt obligations and provides for necessary capital expenditure. Discounting the FCFF at the cost of capital we will obtain the firm value while discounting the FCFE at the cost of equity we will have the equity value. If we make…

shareholdings through mutual funds and investment banks. All of these were features of the corporate landscape in the last two decades of the twenties century (Davis, 2009 cited in Willman, 2004). Theoretical point relates to the efficient markets hypothesis. Markets know better than managers and they do so because the price of a stock contains all necessary information about future cash flows. In his article “The Eclipse of the Public Corporation” (1989), Jensen consider LBO (Leveraged Buy-Out)…

to the owners of the firm in the form of dividends. Once the company decides on whether to pay dividends they may establish a somewhat permanent dividend policy, which may in turn impact on investors and perceptions of the company in the financial markets. What they decide depends…

Market Capitalization: It is the number of outstanding share multiplied by the share price of one share. It is used by the investment community to understand the firms size viz Large –cap, small-cap or mid-cap. Larger the Market Capitalization lesser the risk associated with the stock. The market Cap of Etisalat is increasing trend YoY shows the increase in price per share and the high valuation the investment community places on Etisalat share price. Common Size Income Statement Analysis…

The flexibility of Farmer Mac on right to choose what capital measurements to apply should be forgone imposition of capital measurement are required in order to reduce and eliminate risk arise from capital arbitrage. This method was believed to reflect all business risks, quality and also leverage degree. The capital adequacy of Farmer Mac was very important and ideal level of capital allocation is hard to achieve as the risk degree of each agricultural mortgage was not…

INTRODUCTION The stock market is crucial in determining the country’s economy while stock market return plays the important roles in Malaysia’s stock market. The concerns on stock market returns tended to increase at times as it can determine the economic activity of a country. Nevertheless, the relationship between stock price and macroeconomic variables such as interest rate, exchange rate and inflation rate is also crucial in determining the performance of stock market. Besides that, there…