cooperate finance Essay - 914 Words

GSBS6130- Corporate Finance 1. Introduction Even though the operating performance of Innovative Chemical Corporation (ICC) has been outstanding, there are some problems in respect of the share price appreciation. Firstly, P/E ratio will be used to evaluate the company’s stock and factors which affect company’s P/E ratio will be listed. Furthermore, discounted dividend valuation model will be demonstrated and fundamental factors which impact the share pricing will be analysed. Finally, the value of ICC at 30 June 2010 will be calculated using P/E ratio and DDM model. Meantime, the weakness of those two models will be illustrated, and alternative methodology will be applied to calculate the intrinsic valuation of ICC and then compare†¦show more content†¦CAPM).According to this table, we find that the net income increase from 24.442 to 70.221 in 2005 and 2010, the share price increase from 5.81 to 58.80 in 2005 and 2010 as well. According to the calculation of P/E ratios for ICC in these years are higher t han the average annual P/E ratio, which means that the company overpricing his share price. Obviously, the dividend payout ratio at the same time appear in city is filled with the molecular formula with the denominator. At the molecular, dividends payout ratio, the bigger the current dividend level higher, the greater the P/E ratio; But in the denominator, dividends payout ratio, the bigger the dividend growth rate is lower, the smaller the P/E ratio. So, with P/E and the relationship between the dividends payout ratio is uncertain. 4. Intrinsic value of ICC 4a calculation P/E RATIO The intrinsic value for ICC at 30 June 2010 using P/E ratio is $50.93492181, which is lower than the share price at the same time. Again this shows the company overpricing the share price. DDM MODEL According to the calculations from the table, we can find out the intrinsic value for ICC at 30 June in 2010 is $ 6.2. 4bweakness of P/E ratio and DDM method P/E ratio weakness P/E ratio is a very rough index, considering the comparability, the same index of different stages of the P/E ratio is meaningful comparison, and to different market is transverse comparison should be especially careful. DDMShow MoreRelatedBusiness Models Of Internet Finance1699 Words   |  7 PagesAbstract The internet finance industry is newly developed in China, with only a very brief history. However, the industry is growing at a rapid pace and is becoming a significant part of the overall financial industry in China. In terms of financial functions, internet finance is mainly comprised of payment and settlement services, sales of asset management productsï ¼Å'and financing. 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Ucla Econ 101 Final Spring 2011 Free Essays

1 Final Exam (VERSION 1): Econ 101 †¢ Please write your name at the top of every page of this mideterm †¢ Please write your name, TA’s name, and the time of your discussion section here Your Name: TA’s Name: Discussion Time: †¢ The exam has one parts: Written Questions. †¢ There should be 16 total pages (front and back). Quickly read through the exam before beginning. We will write a custom essay sample on Ucla Econ 101 Final Spring 2011 or any similar topic only for you Order Now †¢ There are 100 total points available. Point values are listed next to each problem part. Please allocate your time accordingly 1 2 Written Questions 1. Consider the following payo? matrix Player L M T 2, 0 3, 1 Player 1 C 3, 4 1, 2 B 1, 3 0, 2 2 R 4,2 2,3 3,0 . (5pnts) Find the pure strategy Nash equilibria of the simultaneous game b. (5pnts) Now suppose the game is played sequentially. Find the subgame perfect equilibrium if player 1 goes ? rst and if player 2 goes ? rst. c. (5pnts) Discuss whether each of the players would want to go ? rst or second. d. (5pnts) Write down a system of equations such that the solution to the system would give a completely mixed strategy equilibrium of this game (please clearly de? ne all of your notation). Can this system of equations be solved? (Hint: think about the condition requiring player 1 to play B with positive probability). Explain what the answer means. 2 WORK SPACE 3 WORK SPACE 4 2. Suppose Player 1 and Player 2 are playing a simultaneous move game with the following payo? matrix: Player 2 L R T 0, 4 ? , 3 Player 1 B 3, 3 4, 6 where ? ? 0 a. (5pnts) De? ne a dominant strategy equilibrium. Is there any value of ? for which there is a dominant strategy equilibrium. If so, ? nd the values of ?. If not, show why. b. (5pnts) Describe all the pure and mixed strategy equilibria of the game as a function of ? c. (5pnts) Suppose ? = 5. What would the outcome be if the players could cooperate? 5 WORK SPACE 6 WORK SPACE 7 3. Billy has just inherited a horse ranch from his uncle. The ranch is located in Oshkosh, WI and rents horses. A unique feature of the stable is the nearby riding trails that overlook Lake Winnebago. Billy has two types of potential customers: novice riders (N) and serious riders (S). The (per customer) demand for horse rides on the ranch is qS = 75 ? 1. 25PS , where qS is the number of hourlong rides a serious rider makes per year. The demand for novice riders is qN = 57 ? 1. 25PN . Assume there are 75 riders of each type in the town. Billy’s cost function is T C = 12q, where q is the total number of hours the horses are ridden per year. . (5pnts) Suppose Billy does not price discriminate. Find prices, quantities, and Billy’s pro? t. b. (5pnts) Suppose Billy can tell who’s a serious rider because of the types of hat they ware. Find the 3rd degree price discriminating prices, quantities and pro? ts. c. (5pnts) Suppose Billy is not able to tell the di? erence betwee n the two types of rider. He decides to start charging a yearly membership fee, T , as well as an hourly price, p. Find the optimal choices of T and p d. (5pnts) Suppose Billy IS able to tell the di? erence between the two types of but still thinks the 2-part tari? is a good idea. Find the annual fee and per hour price that Billy would charge to each group 8 WORK SPACE 9 WORK SPACE 10 4. (16pnts) Boeing and Airbus are the 2 ? rms that produce commercial aircraft. The demand for airplanes is given by: Q = 10 ? P . Boeing’s costs are given by T CB = cB qB and Airbus’ costs are given by: T CA = cA qA where cA , cB are constants. a. (5pnts) Find the Cournot quantities, prices and pro? ts. Find Stackelberg quantities, prices, and pro? ts assuming Boeing chooses output ? rst b. (5pnts) Suppose that right now cB = cA = 5. Boeing has access to a process innovation that will lower marginal costs from 5 to 0. How much would Boeing be willing to invest to implement the innovation. (Assume Cournot Competition from here on) c. (5pnts) Suppose that the innovation is such that Airbus can (imperfectly) copy it, so if Boeing makes the investment Airbus’ costs fall to 2. How much is Boeing willing to pay now? d. (5pnts) If Airbus can perfectly copy the innovation, how much would Boeing be willing to pay? Why is Boeing willing to pay a positive amount? 11 WORK SPACE 12 WORK SPACE 13 5. There are two types of people in the world Sky Divers and Cat People. Both types have wealth W = 100 and utility functions U (W ) = ln(W ). Both types of people can have an accident that leads them to lose $50 of wealth. Sky Divers are riskier and have accidents 75% of the time, while Cat People have accidents only 25% of the time. The proportion of Sky Divers in the economy is pS and the proportion of Cat People is pC = 1 ? pS a. (5pnts) How much would each type be willing to pay for an insurance policy that fully reimbursed them in the event of an accident? b. (5pnts) Write down the equations that, if you solved them, would give the amount each type would be willing to pay for insurance that covered half their losses? . (5pnts) What is the fair price of (full) insurance for each type (i. e. if an insurer knows which type he is dealing with)? What is the fair price if the insurer cannot distinguish the two types? d. (5pnts) Assume insurers cannot distinguish the two types and that insurance markets are competitive so prices are the fair prices. Describe prices and who is insured in equilibrium as a function of pS e. (5p nts) Discuss the meaning of adverse selection in the context of this example 14 WORK SPACE 15 WORK SPACE 16 How to cite Ucla Econ 101 Final Spring 2011, Essay examples

Fahrenheit 451 Theme Essay free essay sample

â€Å"Censorship is the tool of those who have the need to hide actualities from themselves and others. Their fear is only their inability to face what is real. Somewhere in their upbringing they were shielded against the total facts of our experience. They were only taught to look one way when many ways exist.† Charles Bukowski, an American author, unintentionally explains perfectly the customs of the people, influenced by the government, in relation to Fahrenheit 451 by Ray Bradbury; he does this by explaining the habits of people who are naive and intellectually vacuous. Bradbury elucidates to readers the idea of what might come about if citizens slowly stop expanding their knowledge and begin letting the government have all authority. Through Fahrenheit 451s dynamic character change, the significance of imagination and the intellectual confidence of knowledge rather than a blithe attitude and love for entertainment becomes apparent. Montag’s interaction with social outcasts and insouciant conformists implies that Fahrenheit 451 is anticensorship. We will write a custom essay sample on Fahrenheit 451 Theme Essay or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Individuality, it separates the creative thinkers from the simple-minded society. Clarisse is a very audacious person; Montag hasn’t ever met someone so jovial. â€Å"I like to smell things and look at things, and sometimes stay up all night, walking, and watch the sunrise.†(Bradbury 7) no one in this society takes the time to observe the surroundings anymore, but unlike them Clarisse sees the beauty in life. She reveals Mother Nature to Montag, who actually takes the time to see it and how it blooms into so much more than just admiring the scenery. â€Å"When I said something about the moon, you looked at the moon, last night. The others would never do that. The others would walk off and leave me talking.†(23) Clarisse points out to Montag that maybe he is different, that he actually sees the wonder and pulchritude in living. She clarifies to him that he takes the time to listen, look, and acknowledge what she speaks to him. Clarisse’s creative thoughts help Montag to in fact change his perception of the society in Fahrenheit 451. Futuristic fast cars, television, and radio all occupy the general public, but what about real conversations, thinking for yourself, emotions, and how about history? Leisure activity has taken up the entire population’s time â€Å"Yet somehow we think we can grow feeding on flowers and fireworks, without completing the cycle back to reality.†(83) Faber, by comparing flowers to the society,  states that the society’s foundation is unstable because the people are not facing the veracity of existence. His philosophy of books â€Å"Number one, as I said: quality of information. Number two: leisure to digest it. And number three: the right to carry out actions based on what we learn from interaction of the first two.† (84, 85) gave Faber the comprehension to absorb the information in it. From learning this, Montag discovers that the information in the books portray humanity in such a manner that the government doesn’t want anyone to distinguish. â€Å"Doesn’t everyone look nice! / Everyone looks swell. / Isn’t this show wonderful?†(93) Mildred and her friend continually compliment each other on appearance not once going into detail on their faà §ade; they all live carefree with no worries. The ladies came in with â€Å"martinis in their hands†(93) and they watched shows in the ‘parlor’. Even under a vicious stare from Montag, the women still were â€Å"lighting cigarettes, blowing smoke, touching their sun-fired hair and examining their blazing fingernails†(95). The general public lives in a lighthearted, untroubled society were ‘convivial’ and relaxation is essential. The meaning of life, no one knows precisely what it is. If there was anything that did discern it, it would be books. Fahrenheit 451 reveals the value of books to readers by showing that unintelligence and excitement is not always exceptional. This novel remains today one of the best-known warnings against the danger of censorship and the more subtle loss of minds eye and originality that occurs when cultural treasures are obscured by the often mindless entertainments and uneducated enough population.