Moving average

have an increasing growth for several periods and will drop to the stable growth afterwards. Hence, the first stage of this model would be the increasing phase for 5 years and then followed by the stable growth phase. 5.2. Valuation Input Weighted Average Cost of Capital (WACC) would serve as one of the valuation input for this two-stage DCF model. WACC itself explain…

Donald Trump What if one normal man was able to go from a small time businessman, to a large scale Entrepreneur and reality TV star, to finally becoming the President? This is a brief summary of the life of Donald Trump, the current President of the United States. Donald Trump has benefitted the United States by reducing regulations and allowing jobs to prosper, winning the Presidency while running against a politically elite figure, and succeeding as a businessman and helping to inform his…

common valuation approach is the discounted cash flow model(DCF). It considers perspectives of all claimholders in the company. Economists define the corporate value as the present value of expected free cash flow of company discounted by its weighted average cost of capital. It is closely related to the financial decision making of the company and reflects time value, risk and sustainable development capacity of corporate. Therefore, approaches to achieving maximization…

The Birth of Bull and Bear Markets as Financial Terms The terms, "Bull," and "Bear" for the state of the market are inspired by the typical way in which these two animals attack in real life scenarios. The bull is generalized to attack by forcing its horns up into the air, symbolizing the upward trend of a bull market. In contrast, the bear is generalized to swing its paws down upon its prey; thus serving as a symbol for downward trends. Stock market conditions are defined commonly either by…

At the end of the 1920s there was a huge imbalance between the rich and the poor: 0.1 percent of society earned the same total income as the bottom 42 percent.6 This imbalance, combined with production of more and more goods and rising personal debt, would soon doom our country. When giving his state of the union address in 1928, President Calvin Coolidge remarked that "America had never been met with a more pleasing prospect than that which appears at the present time.”7 The next year,…

1) Calculate all of the ratios listed in the industry ratios table for East Coast Yachts. Industry Ratios Ratio Formula Values Answer Lower quartile Median Upper quartile Current ratio current assets/Current liabilities 51,123,050/50,584,750 1.01 0.86 1.51 1.97 Quick ratio current assets-Inventory/Current liabilities (51,123,050-20,149,650)/50,584,750 0.61 0.43 0.75 1.01 Total asset turnover sales/total assets 611,582,000/401,558,750 1.52 1.10 1.27 1.46 Inventory turnover cost of goods…

attained through DCF analysis is higher than the current cost of the investment, that’s an indication of a good opportunity investment. The Weighted Average Cost of Capital is the company’s cost of capital which all of the company’s assets are respectively weighted; bonds, common and preferred stocks, and long-term debts are involved in the Weighted Average Cost of Capital calculation. The Equivalent Annual Annuity is a calculation of the annual cash flow of an annuity investment over its…

measure these averages, especially given the high returns and volatility of the bond markets shown in Exhibits 4 and 5. He was concerned also about which measure of expected returns should be used. Exhibits 4 and 5 present two different measures of average annual return, the arithmetic and the geometric. The arithmetic average return is the sum of the annual returns over the time period divided by the number of years in the time interval. The geometric average return is the compound average…

Case Study: The Impact of Information Technology (IT) on Market Efficiency in the North American Security Markets As discussed in the previous sections, security markets around the world are using information technology in a verity of applications, and they are computerized to different degrees. Prior to Freund and Pagano (2000), there has been little done in terms of studying the impact of using information technology on the efficiency of exchange markets. Also, there were not enough empirical…

The weighted average cost of capital, commonly referred to as WACC, is an important and widely accepted tool for companies to use. WACC allows the company to value future projects and the company as a whole by proportionately weighing each category of capital; because of this a firm’s WACC is dependent on the capital structure of the firm. Investors also use this tool to confirm whether or not companies are worth the investment risk. The higher the WACC, the higher the investment risk of a…