Shareholder Value

Week 7 Chapter 6: Investors in the Share Market True/False QUESTIONS 1. Investing in shares of publicly listed corporations should, on average, over time provide a higher return than investing in fixed-interest securities. a. True b. False 2. Investments through a stock exchange are limited to ordinary shares issued by listed corporations. a. True b. False 3. Portfolio theory contends that a diversified share portfolio enables an investor to significantly reduce the portfolio’s exposure to systematic risk. a. True b. False 4. A share that has a beta of one is twice as risky as an average share listed on a stock market. a. True b. False 5. Shares that typically demonstrate a negative price correlation will usually move in the same direction

Which classification system is available with EQS as a criteria for your screen of equities?

According to my analysis of the Accessline’s proposed term sheet, I do not believe that Apex would serve its own interests, or those of its investing partners, by investing in Accessline according to the terms proposed. By investing at the proposed valuation, according to the proposed control and incentive structure, Apex would be shouldering a disproportionate share of the risk should Accessline fail to meet its performance targets, or require fresh inflows of capital from future investment rounds. Nor can Accessline take the sort of steps necessary to protect its investment in the case of management failure.

“Let me keep my distance, always, from those who think they have the answers. Let me keep company always with those who say “Look” and laugh in astonishment and bow their heads” (Oliver, 2009, p. 62). The words of Mary Oliver surface the value of ambiguity in the face of certitude. They reflect the stance of humility integral to the role of a truth seeker. It is anticipated that in proving a theory or belief, one seeks evidence in pursuit of truth to provide clarity around unanswered questions. For some, evidence is understood as a “collection of facts believed to be true” (Melnyk, 2015, p. 4). For others, evidence is “something that yields relative confidence in the truth of some proposition that can’t be either logically proven or directly

If the number of outstanding shares is reduced by a buyback of shares then the EPS will increase if the EAT remains unchanged. However the EAT is reduced since there is interest expense. If the dividend payout remains the same then the dividend paid per share will increase as well. The debt interest would be 13% of $3 billion which is $390 million. EBIT in 2001 was $527,366,000. So the EBIT is $137,366,000. Then this is taxed at 40% so the EAT is $82,420,000. So by taking on more debt the EAT diminishes so the earnings per share will drop dramatically. Dividends affect next years earnings as they are taken out of the EAT.

It is hard to value private company stock. A stock certificate is a piece of paper that entitles you to something of highly uncertain value, and could well be worthless in the future, or highly valuable, depending on the fate of the company.

Conversely, looking at the income statement for PMWL, operating income shows healthy gains of $45,862, which means the operating expenses are significantly lower in comparison to AWBL’s. However, PMWL’s cost of goods sold appear abnormally high, which makes an investor question whether this company is at it’s maturity phase in the product life cycle, and how much additional capital is necessary to bring this figure down to a number that leverages economies of scale and allows for profit maximization.

is one of Canada’s top hoteliers in the mid-market, owning interests in 16 hotels in Canada and the United States. Furthermore NGI is in ownership of 2,200 rooms in 17 hotels across Canada and the United States. The Company is expert in all facets of the hotel business, from marketing to building to management. Focused on creating the best return and value for all stakeholders, Northampton’s market-sensitive strategy is to acquire or build hotels that provide great value and superior accommodation. Gratefully, NGI excels in this sector by offering services that exceed expectations while still posting industry-leading margins. Besides acquiring and developing undervalued and underutilized hotel assets, NGI also provides superior overnight accommodations at mid-market prices. This has been done through aggressive marketing, re-branding and ongoing hotel upgrades.

The Valuation Implications of Enterprise Risk Management Maturity by Mark Farrell and Ronan Gallagher seeks to prove that firms who integrate the Enterprise Risk Management (ERM) process tend to enhance their value by recognizing risk. This article states that enterprises will be subject to many risks and that the goal of ERM is to “model, measure, analyze, and respond to these risks in a holistic manner” (p. 625). As defined by the Casualty Actuarial Society (2003) ERM is “the discipline by which an organization in any industry assesses, controls, exploits, finances and monitors risks from all sources for the purpose of increasing the organization’s short and long-term value to its stakeholders”. The value of a firm was found by analyzing the ERM maturity assessment score by using the Risk and Insurance Management Society Risk Maturity Model (RIMS RMM), which is commonly known and esteemed. This was done to provide evidence that companies who incorporate the ERM process tend to add value to their company. This is important because as the article states, the premise of ERM has only been in existence for just over 10 years, and therefore research is extremely limited in regards to how to measure the full effect of ERM on a firm. This article seeks to discuss the value of ERM and how it has evolved, the data and model used to confirm the value of ERM, and then it concludes with the observed results.

Shareholder Value or Financial Perspective: Holy Grounds will find its niche and be competitive in that it is a different kind of coffee house to the norm appealing to a uniquely religious market. It is a coffee house that offers uplifting Christian-based music along with thought provoking lectures that strengthen the mind and spirit of the typical Christian college student. Holy Grounds will also offer organic healthy food choices and by doing so will support local farm growers as well as support the local economy. This will provide further value to the shareholder. In the United States with a population of over 290 million people, only 21,400 coffee houses exist. These numbers leaves opportunity for Holy Grounds within the competitive marketplace of coffee houses. Customer Value Perspective: The customer will gain both nutritious and religious value. He/ she will have quality organic treats whilst being treated to Christian music and motivational speaking opportunities that will be interesting to a diversified Christian denominational population. Events such as lectures and concerts will be presented by regional pastors and top-selling authors as well as regional church ministries and national recording artist on the Christian radio networks. There will be room too for small meetings for various Christian events. Its appliances and technology will be up to-date with the cafe, for instance offering new coffee machines that make mocha iced coffees as thick as a milkshake.

I. Introduction of company valuation methods and process........................................................3 1. Abstract................................................................................................................................3 2. Valuation methods...............................................................................................................3 2.1 Balance sheets – Based methods

Q7: Consolidated financial statements are prepared because they can be used in the determination of the financial position of a company, the results due to the operations and factors that could be affecting its operations.

Potential to leverage or gear up the investment in which way increases both his potential profits and losses.

As a team, we analyzed two individual securities, a fund, and the S&P 500 based on historical data. We found closing prices on a monthly basis for a total of 5 years for each security, fund, and index. As individual securities, we analyzed Lululemon Athletica (LULU) and Molina Healthcare (MOH). For our choice of fund, we analyzed USA Mutuals Vice Investor (VICEX). Finally, for the index, we analyzed the S&P 500. We took the historical data from yahoo finance and used Excel to find the Standard Deviations, Sharpe Ratios, HPR's, and regression analysis for each of the securities listed above.

Analysis of Shareholdings as at 31 March 2010 | | Authorised Share Capital | : RM100,000,000.00 | Issued and Paid-up Share Capital | : RM69,739,750.00 | Class of Shares | : Ordinary Shares of RM0.50 each | Voting Rights | : One vote per ordinary share | |   | Shareholdings Distribution Size of Holdings | No. of Shareholders/ Depositors |