Essays on Stock Market

The capital is the lifeblood of any company and the major constraint for the entrepreneurs because of the limitation of the sources through which they can raise capital. Raising equity and debt is believed to be the life of the economy. Raising money from the local citizens is a remarkable act but it seems to be miracle to raise money from the foreigners and this is what the globalization aims at. During the recent decades, the cross-border financial flows have been steadily increasing around the world. With the tight integration of the world’s economy, there has been an ...

The concept of cross listing entails the purchase and dealings in stocks listed in foreign markets. With the onset of globalization, countries were compelled into eliminating legal hurdles so as to open their markets for purposes of cross listing. However, the idea is still nascent in most of parts of the world. The leading international stock markets for cross listing are New York, Tokyo and London markets. This paper would tackle two central issues. The first limb seeks to examine advantages and disadvantages of listing companies in different foreign stock markets while the second limb examines issues involved in ...

Introduction:

NASDAQ index is made up of industrial, healthcare, media, technology, telecommunication and service companies. The biggest companies in US which had listed in the stock exchange when it was incorporated are the main composers of this index. It consists of both local and multi-national companies.

1. Suppose the NASDAQ index increase by 7 percent annually over the next decade while the S&P 500 increases 6 percent annually, on average you are better off holding the NASDAQ stocks than the S&P 500 stocks. On average are you better off holding the NASDAQ stocks than the S&P 500 stocks because ...

Abstract

Financial statements suffice for purposes of communication of financial and non-financial information to end consumers. These consumers in one way or another use the information in the decision making situations they are confronted with. Some of the basic financial statements include; the statement of income, the statement of financial position, the statement of cashflow and the statement of changes in equity and reserves. On the other hand, consumers of financial statements can be divided into two broad groups; internal consumers and external consumers. Internal consumers include managers and employees while external consumers are creditors, investors and government regulatory bodies. ...

Financial planning is a very crucial aspect of a business enterprise. It plays a core obligation in the success and efficiency of an enterprise in matters related to performance and profitability. A business enterprise needs to establish its goals and objectives when investing in various projects. In practice, an enterprise sets financial goals and objectives in order to avoid chances of financial constraints and the possibility of failure to meet its set financial obligation within given time frames. Therefore, the creation of budget will always be necessary for an enterprise so as to enable the company focus on achieving ...

Techniques for analyzing capital budgeting have changed a lot in due course. With different techniques, many analysts believe that techniques that consider the time value of money are more useful. Methods, like payback period, which is old, have a disadvantage of not using the time valuably and which at the end will fall. The older methods will be replaced by the newer and better methods. There are different capital budgeting techniques that investors use and there is no specific technique that every investor would be using. So it is the choice of the investors to select which method he ...

Bonds are known as debts, which the government or certain companies assume by loaning money from the public. This is in the form of U.S. Government bonds, corporate bonds, or municipal bonds, among others, and are used and invested in company expansions or government initiatives such as street lighting, infrastructure, and maintenance of government buildings. In exchange, investors receive a fixed interest rate within a specified period. Therefore, people invest in bonds because bonds provide stability in investments, consistent source of income, and security of investment. Stability is the first thing that investors consider when investing money on bonds. ...

Financial planning is important for businesses today. By preparing the financial plan, an organization is able to determine what kind of objectives the firm would like to achieve. There are different aspects that are covered in a financial plan and some of the important aspects of financial planning include; estimating the profits that the firm would like to generate, the types of resources that would be required to accomplish these objectives, identify the changes in the business environment, analyzing the risk and return of investment, calculating the budget and costs that would be incurred, estimating sales from different departments ...

Introduction

The sole aim of injecting capital into a stock market it to generate a favorable return on the investment. Many investors not only try gain profitable returns but also try to beat or outperform the market. However, one of the major stock market states that the prices of a particular share or security at a given time fully reflect the available information and data about a specific market or stock. Thus according to this hypothesis, shares and securities prices exclusively respond to the available information in the stock market and since all the participants in the market have equal ...

Discussion 5

ISSUE: Whether or not the civil court is in the best legal remedy that will enable the court to help the investors to recover the compensation for the investors

RULE: In order to recover compensation for investor for corporate misconduct performed by the officers, the SEC can file civil cases before civil courts to force settlements that bring financial punishment together with corrective action (Briggs, 2011, p. 103).

ANALYSIS: It will be easier to recover compensation for investors if the case is filed before the civil court because the plaintiffs shall only be required to prove preponderance ...

There is a high risk of investing in stocks compared to bonds this is because the return from bonds can come either from dividends which depends on the performance of a company such that if the a company reports negative profits it will translate to zero dividends. The second form of income in regards to stocks is capital gain from the sale of stocks which means that you can only sale stock when price go up in order to earn a capital gain the unfortunate bit is that this price of stock is determined by market forces of demand ...

`When the reported that the Adelphia Corporation was facing imminent collapse, shock waves ran through the business world. The reveal of Adelphia scandal made the world rethink their business practices. The story of Adelphia presents how one of the largest companies in the United States could also cause on of the largest cases of fraud in business history. By taking a closer look into the Adelphia scandal we are better able to determine what went wrong and what can be done in the future to prevent these types of instances.

This hidden information led to questions about ...

John Maynard Keynes (5th June 1883-21st April 1946) was one of the founders of modern macroeconomics. He was a British Economist, and he was in the Keynesian economics school of thought. His main contribution towards macro economics was the formulation of the Theory of Employment. His theory of employment opposed what the Classical Economists proposed.

In the theory of Employment, Keynes argues that the main cause for unemployment was insufficient expenditure in investment. Keynes argues that unemployment is as a result of rigidity in wages. The low demand for output and workers to perform a job causes involuntary unemployment. ...

The mention of Brazil brings an image of a beautiful country full of beautiful people. A country with breathtaking beaches, carnival atmosphere, rich in the beautiful soccer they play, and by thinking of vacations the country that hits ones’ mind is Brazil. Media through magazines and advertisements on televisions have created all these images. It is a country full of different cultures appealing to people worldwide. Brazil is also the country of Samba, their national team that plays beautiful football, and full of supermodels. Basically, a country with all these attractions and lovely people would be an ideal business ...

1. Reason for the Agency Securities and Exchange Commission Agency plays an important role in providing regulations which govern securities market functioning as well as protecting investors’ welfare in these markets. Nevertheless, this agency monitors the corporate takeovers in the United States. In general, Securities and Exchange Commission is the U.S overall agency whose main agenda is to enforce laws and regulations related to federal securities, stock and options exchanges. This agency was established by the congress in 1934 following the crash of the stock market crash which saw the American economy decline in 1929 ( ...

INTRODUCTION

Small businesses face many issues in comparison to the well established organizations. However, among several issues one of the major issues that small businesses face is to raise capital. Many small businesses and entrepreneurs may have the ability to make their organization a big organization however because of lack of investment they are not able to do so. With the increased risk in the market, banks and venture capitals have also become very much risk averse instead of accepting the risk and growing their investment. This has also lead to such situation where small businesses face different issues in ...

1. Reason for the Agency Securities and Exchange Commission Agency plays an important role in providing regulations which govern securities market functioning as well as protecting investors’ welfare in these markets. Nevertheless, this agency monitors the corporate takeovers in the United States. In general, Securities and Exchange Commission is the U.S overall agency whose main agenda is to enforce laws and regulations related to federal securities, stock and options exchanges. This agency was established by the congress in 1934 following the crash of the stock market crash which saw the American economy decline in 1929 ( ...

Executive summary

Royal Dutch Shell PLC commonly known as the shell is second largest energy company in the world whose registered office is in London. It is oil and Gas Company operating in various parts of the world; to stay relevant to climatic and environmental changes it engages in both renewable and non renewable energy. In addition, it is a vertically integrated oil company which engages in all oil activities from exploration to refining and marketing. Apart from its core activities, it has entered into partnership with various international organizations to preserve the environment. The company shares are listed in London ...

1. Investing in the securities market has several advantages and disadvantages. The major advantage of investing in securities is the high returns that one can expect from the investment. Compared to other assets, securities offer the highest returns. Its major drawback however is the high risk related to it. Prices of securities are very volatile. Right timing, research and knowledge about the stock are very important. By investing in securities, one is able to diversify his portfolio through the purchase of stocks in different industries. With diversification, the risks are spread out. On the other hand, this ...

Associated British Foods was founded in 1935 initially known as Food Investments Limited. It changed its name in 1960. During this period, the company had grown incredibly and has not stopped ever since. It has continually expanded its business by primarily acquisition. Associated British foods has embarked on opening store worldwide and until now it has ventured into Europe, Africa, America, and even Asia. In total, it is presently operating in 47 countries (Ruddick, 2012). The company specializes in foods, spices and of late, clothes retail. Its varied brands such as Primark, Twinings, and Pataks have charmed investors and ...

Given the harsh economic time, state of the economy and the rise in basic commodity prices such as food, fuel and cost of housing, personal finances has become a hot topic for a while. Many people live a debt-ridden life mainly on unsecured credit instruments like credit cards. In the financial market, so many other credit instruments are available to provide money to borrowers for many different reasons.

Modern financial systems are extremely complex with markets being made up of many forms of investment instruments and different kinds of investors. This has made the financial market extremely difficult to ...

Question 1

Investment is an undertaking with an expected return in a given period of time. Investors focus on the value of return before making an investment decision. The investment value is subject to some elements which investors are concerned with their investments. These variables are as follows:

The expected cash flow of investment.

The investment cash flow can be used to evaluate the investment viability through use discounting techniques such as Net Present Value, Internal Rate of Return and Profitability Index. When the initial project outlay is less than the present value of the investment cash flows, then the project is viable using NPV technique. The ...

The compound C12H10Cl3N3O8Ru2 is made up of various elements. These elements include carbon, hydrogen, chlorine, nitrogen, oxygen and ruthenium. One of the features of the compound is that it has a formula weight of 632.72grams/ mole. This is the weight obtained by summing the atomic masses of the elements that make up the compound. This mass means that from every one mole of the compound, the total weight is about 632.72 grams. It can be observed that the mineral is heavy as compared to other compounds of the same nature.

The compound is joined together by covalent ...

1. Role a sample plays in making statistical inferences about the population

The sample plays an essential role in the process of making statistical inferences about the population. Ordinarily, the entire population is usually too large to be fully studied. The limitations that limit study of an entire population include costs, time and convenience in the application of the study modes. A sample from the entire population is selected. It is assumed that the sample would be representative of the entire population and contains minimum bias towards any aspect of the population. The sample, therefore, forms the basis on which ...

Abnormal returns refers to the excess returns that are generated by an investment over and above the expected return. Abnormal returns are positive if the actual returns are higher than the expected and negative if the actual returns are lower than the expected returns. This section seeks to compare the pre merger and post merger abnormal returns of the Access Bank of Nigeria. It also seeks to analyze how abnormal returns relate to mergers and acquisition.

In July 2004, the Central Bank of Nigeria (CBN) announced a new bank policy on the minimum paid-up capital requirement of banks in ...

Question 1

In business terms, risk can be explained as the inability to make correct anticipations or predictions about the incomes a business expects to realize in the future. A business faces risk due to the fact that it cannot accurately predict whether it will earn enough money to sustain its existence in future periods. Diversification, on the other hand, refers to the process of making several different investments that are not related so as to reduce the level of risk an investor faces.

Businesses may measure the amount of risk they face by analyzing the level of standard deviation they ...

Foreign Direct Investment in India is a debatable topic. Though there are many success stories of FDI in sunrise sectors but there were some debacle with investment that has smeared black on the Government’s face. Above all, India is now been called as emerging market and thus attracting a lot of FDI in almost all the sectors.

Introduction:

Foreign Direct Investment (FDI) refers to the net inflow of investment to acquire management interest in any organization which is operating in the economy other than that of Investor’s. FDI is the key ingredient for development of the economy and ...

Question one. List at list two main goal(s) of this publication

1).The purpose of the publication is to broaden the information available for the organizations involved in the fight against counterfeit organizations with vibration spectroscopy. 2.) The Second purpose of this publication is providing a model for identifying counterfeit products with genuine products.

Question two. Identify two analytical technique used in this publication and provide the basic theory of this technique.

The first analytical technique used in the journal is Raman spectroscopy. This technique is used in the study of rotational and vibration models in a system. The spectroscopic technique relies on the effect of inelastic scattering and Raman scattering of single wavelength light emitted from a laser in the near infrared, visible and near ultraviolet regions ...

Introduction

Security is any effort taken to ensure protection of persons or property from harm or any form of destruction. The concept of security evolved as the society evolved over time. In the old ages, security was only an issue of personal safety, but as societies became more complex so did the introduction of property and ownership. Property has evolved be anything from digital property to money, valuables, corporations and intangible property. This complex ownership structures present new security concerns. While in early ages the society relied on unwritten behavior and rules to exert security, this has since changed to ...

1. In your OWN words, define the following concepts of deterrence theory--general deterrence; specific deterrence; celerity; severity; certainty; AND explain utility principle for rational choice.

Specific deterrence is when an individual is punished for a crime; general deterrence is others decide not to commit crimes because they saw someone else get punished. Rational choice weighs the benefits and repercussions of a particular action, and takes into account: celerity, how the quickly punishment follows the crime; severity, (pg18) how harsh the punishment is and how well it suits the crime; and, certainty, how likely someone is to be punished for ...

Introduction

The IFRS are accounting standards, rules and principles that were introduced by an independent organization in the United Kingdom, known as the International Accountants Standards Board. The institution puts forward that the standards would better serve public companies worldwide than the local standards in the country due to the aspect of comparability, transparency and economic growth. There are several countries that have adopted the IFRS over the recent years. The transition to IFRS for the companies in these countries has considerable costs. There are technical and training costs that are incurred that may cause several companies to be cautious ...

The mission statement is a very important element of an organization. The Mission statement informs about the company, its basic purpose and it elucidates why does the company exists. Mission statement defines a path that company need to follow. In this paper, we would look at several aspects of the mission statement and its relevance. A good mission statement should deliver complete information about the company and it should communicate that how the company is distinctive from the other companies. A mission statement impacts the existing clients of a company and the reason behind it is that they may ...

How is the Texas Constitution Changed?

What Proposed Amendments did Texas legislators agree to place before voters this year? The 10 amendments the legislators agreed to put before voters this year most often have to do with raising money by using bonds to take care of problems ranging from water management to student loans. The general reason is to update the Constitution by adding the amendments (Brown, 2011).

Below are listed the ten joint resolutions approved in the 2011 Regular session which propose the 10 amendments be added to the Constitution by the 82nd Texas Legislature. The voters now have a chance to support or ...

Question 1

Stock flipping refers to buying stocks during an initial public offer with the intention of reselling them immediately at a profit. It is a short term investment strategy that takes advantage of existence of liquid markets. Institutional investors engage more in stock flipping than individual investors since they have more shares availed to them at the offer price .

Investment banks encourage stock flipping for various reasons. If an IPO is allocated only to long term investors, there will be no trade in the secondary market. The stocks will be in the public but they ...

Annuities and perpetuities are types of financial instrument, which make payments at regular intervals (parrino & kidwell, 2009). Although both perpetuities and annuities make regular payments, there is a difference in the life span of the financial instruments. Annuities have a finite lifespan while perpetuities have an infinite life span (Grinblatt & Titman, 2002). Examples of annuities are; loan repayment and lottery winning. For loan repayment, the principal and interest are repaid in regular intervals while in lottery winning the winner receives a fixed amount of the winning for fixed period. Example of ...

Currency exchange rate is a country’s currency expressed in foreign currency’s terms. This is affected by the forces of demand and supply in the currency market. Currency exchange rates are essential whenever making investment decisions. Investors tend to invest in countries where the exchange rate is high as in so doing their returns will be maximized. The investors also use the exchange rate for speculative purposes when carrying out foreign exchange market transactions. For instance in instances where the exchange rate has been increasing the investor will be able to speculate a future increase in the rate. ...

Principles of finance

Undiversifiable risk is also known as known as systematic risk. This is a risk, which is common to all securities, for example the market risk. However, diversifiable risk is also known as unsystematic or idiosyncratic risk. This is the risk associated with individual assets or certain sector of economy or a specific company. A major lawsuit against one large corporation is a diversifiable risk because its effects will be felt in that corporation only and not the entire economy or market (French, 2003). A substantial rise in oil prices is an undiversifiable risk because ...

Introduction

Financial markets in the economy have a role of linking the demanders and also the suppliers of funds. They enable firms and individuals to access capital and invest any surpluses. These are the markets that allow the financial sectors of the economy to run smoothly. However, many individuals do not understand these markets despite their crucial role in the economy. They have varied reasons for their failure to comprehend these markets and these reasons limit their understanding of the markets. This serves as the foundation for the thesis of this paper that is – accountants have a role to play ...

Answer 1)

Dividing the period of analysis in three periods i.e 1981-1991, 1992-1997, 1998-2011 we could easily interpret the actual trend in the bond ratings by Standard and Poors. 1981-1991: This was the period of slow economic growth and as a result, once could witness that till 1991, number of bonds downgraded had exceeded the number of bonds upgraded. 1992-1997: This was the time of blue chip stocks and when US economy was introduced to the boom of technology. As a result, with the rejuniveation of US economy, the number of bonds upgraded exceeded the number of bonds being downgraded. 1998-2011: ...

The Dow Jones Industrial Average Yearly Return I have obtained from the following table:

http://www.1stock1.com/1stock1_139.htm

We use the last column.

The U.S. GDP growth rate is below:

We use third column.

- Compute the average, standard deviation and the coefficient of variation of each of the variables. In addition, graph the values of the DJIA on the percentage grow rate of the GDP. I use Minitab 16 statistical software to complete this question:

Descriptive Statistics: GDP per capita growth, %; Dow Jones Rate

Variable Mean StDev CoefVar GDP per capita growth, % 1,755 1,994 113,65 Dow Jones Rate 9,67 15,24 157,63 - Compute a 95% confidence interval for the population mean of each variable.

One-Sample T: GDP per capita growth, %; Dow Jones Rate

Variable N Mean StDev SE Mean 95% CI GDP per capita growth, % 31 ...

After completing the “Play a Virtual Market” simulation, my knowledge regarding how the stock market works was greatly enhanced. My basic strategy was to invest in oil, banks and energy stocks. I also picked a few stocks whose name I recognized. Fundamentally, my strategy was to buy low and sell high. I was estimating that the price of these stocks will go up because of the increase in oil prices, which then increases the energy prices. I realize that Investing in the stock market is a risky investment. However, that riskiness can be decreased by investing in options. An ...

Abstract

The Nelson – Siegel – Svensson model is one of the preferred methods by which investors determine the value of bonds in the long run and thus make informed guesses as to the viability of each investment option. It is an accurate method of prediction when an investment portfolio needs to be set up. In this paper, by using the Nelson – Siegel – Svensson process, an attempt will be made to inform investors like to the best option for a fixed income portfolio. The paper would demonstrate how the process is to be used and applied to the data related to treasury ...

In the study of stock market prices, percentage change of interest and, the percentage change of market indices are key determinants in predicting the future performance of the stock market. When buying shares in the stock market, an investor usually compares the current price and, the future expected increase in price, which will result in profits. The future expected profit is usually calculated at the existing interest rates. Any future change in the interest will automatically have an impact on the future expected earnings. For instance, a rise in interest rate may result from inflation. As a result, future ...

I believe that economic globalization brings both benefits and shortcomings to international portfolio investments, but is overall beneficial. On the one hand, economic globalization leads to expanded markets for companies who are now able to address the need of more customers than before. Because of this, companies can use economies of scale to their own benefits and generate better returns on capital. The globalization allows for a more efficient allocation of resources, for instance by manufacturing products in the area where the prices are the most competitive (e.g. European textile brands manufacturing clothes in Bangladesh). These are all benefits ...

(Candidate’s Full Name)

Movie Review:

Plot “Get rich or die trying!” This is the motto for the 2013 American movie titled The Wolf of Wall Street. Directed by Martin Scorsese, the film is an on-screen adaptation of a memoir of the same name written by Jordan Belfort, a former stock broker convicted of stock market manipulation and running a penny stock boiler room in USA. Starring Leonardo DiCaprio as Jordan Belfort, the film narrates his career as a certified stockbroker with L.F. Rothschild, before losing his job due to the 1987 stock market crash. Using his brilliant salesman skills, he ...

Wolf of Wall Street is an American black comedy movie based on Jordan Belfort. It is directed by Martin Scorsese, and the screenplay is written by Terence Winter. It was released on 25th December 2013 a film based on the true story of Jordan Belfort. Jordan is portrayed as wealthy stock-broker who lives large, spends a lot of money, and lives an exceedingly high life, until he falls due to involvement in corruption, crime, and federal government. It is a very funny and entertaining movie that features other characters including; Margot Robbie, Jonah Hill, Matthew Mc Conaughey, Rob Reiner, ...

Cross-listing is a process to access other stock exchange markets to collect the investments. The main advantage of cross-listing for the share-issuing companies is that due to the different business time zones, the companies have the opportunity to trade for more than the normal trading hours available. Therefore, more trading hours allow the companies to complete their ‘right issue campaigns’ in a short time. Another main advantage of cross-listing is that the companies which are listed in different countries are in a position to collect funds in different currencies that reduce their translation and currency risk. Moreover, the list ...

Introduction to finance and quantitative methods

Question one - Ways of classifying financial markets Financial markets refer to markets where exchanges of financial instruments take place. Financial markets can be categorized in the following ways: - Nature of the products: Financial markets can be classified based on products ownership, the duration it takes to mature, how it is traded, size and how it can be transferred. Examples of such financial markets are equity and derivatives. - Market participants: Market participants may be made up of professionals, non-professionals or officials of an institution. Under this criterion, financial markets can be classified as commercial banks, Central banks ...

Russia is vulnerable to disruptive terms of trade because of its dependency on oil. Because of fluctuating oil prices, sluggish domestic demands, weak external environment and high rate of inflation, Russia’s economic growth declined in the year 2012 to 3.4 percent, and it is projected to be constant in 2013. Capital outflows in the Russia are expected to increase while debt ratios are expected to be favorable. Russia is a large size economy and its Gross Domestic Product (GDP) growth rate is 3.4 percent. The adjusted dollar terms of the GDP, purchasing power and income per capita is $ ...

Aggressive Equity investors

Aggressive equity investors play their equity game both actively and vigorously. They spend most of their time and effort in managing their portfolio better than their conservative counterparts. The aggressive equity investors are inclined towards taking greater risks, although in a calculated manner, in order for them to earn superior rates of return. They seem to enjoy the pleasure and adventure of playing the equity game (Chandra, 2008). The following guidelines are relevant to for aggressive equity investors for investment decisions. If equity investors wish to manage their investment well they should know that they should have knowledge of ...

Lehman Brothers Holdings Inc. was ranked as the fourth largest bank in the US before it declared bankruptcy in 2008. The company was dealing in investment banking, equity and fixed income-income sales and trading, research, investment management, private equity, and private banking. A significant number of clients withdrew their accounts from Lehman Brothers and the share price of the stocks fell at an exponential rate. Consequently, on September 15, 2008 the company filed for bankruptcy under Chapter 11. Lehman Brothers played a major role in the recession of the late 2000’s which drastically affected the entire country. The ...

Investment Policy

This investment policy has been drafted after consideration of a number of policies on the part of the client. It also describes all the prudent investment factors that the investor deems appropriate. In this investment policy, the investor is offered asset classes that are managed under specified management styles for achieving the set objectives (Craig, 2012). The main return objective for this investment policy is maintaining the returns for the investor at a minimum of 7.5% while maintaining a moderate risk level in comparison to other market investments. It also aims at capital preservation and long term growth for ...

Summary

The global economic crisis that happened between the year 2000 and 2010 was largely due to the issue of mortgage securitization. Mortgage securitization emanated from firms developing new securities from the mortgage obtained by buyers and developing business with investors from these new securities. The development of mortgage securities begins with the buyer of a homeowner paying cash to secure ownership of the house. To obtain the cash, the buyer secures a mortgage using a mortgage broker who secures the mortgage from a securitizing firm. The securitizing firm then creates new securities, which it sells to potential investors. The ...

- Introduction The report describes the process of the analysis of two stocks which has been done using the Single Index Model. It includes collecting and sorting the data, analysis this data using the SIM and regression analysis and the explanation and the evaluation of the results. The findings are useful for decision making in the financial planning. - Stocks Analyzed The table above contains the information about two analyzed stocks: the company name, stock code, relevant sector, the average return and the standard deviation of the return. Last two points have been computed using the monthly price data spanning ...

i) Calculating cost of equity using CAPM Model: Capital Asset Pricing Model, often abbreviated as ‘CAPM’, is the most fundamental concept in the investment theory of present time. This is an equilibrium model that predicts the expected return on a stock, given the expected return on the market, the stock’s beta-coefficient and the risk free rate. Considered from the borrower point of view, this model is used to calculate the cost of equity for the company using the following formula: Cost of Equity= RFR+ Beta(Equity Risk Premium)

Below is the detailed explanation of cost of equity calculated for Tim Hortons Inc:

Risk Free Rate: This refers to rates being offered by ...

Introduction

The Journal of Banking and Finance (JBF) essentially undertakes the mandate of publishing both the empirical and theoretical research, it doesn’t publish any other research but rather those within the span of finance and banking. Its main objective as stated within the scope of their mission is fundamentally to ascertain a flow and availability of research that pertains to capital, money, and operations of the financial institutions. Ensuing the fact that this journal accomplishes the mandate of assuring a continued flow of research materials about banking and finance, recent articles from this journal will be analyzed to deduce ...

Answer a)

Market is said to be efficient when the same amount of information is available to all investors at the same amount of time. In other words, an ‘Informational Efficient Market’ is said to be efficient Nobel Laureate, Eugene Fama was the strong proposer that the market is efficient, i.e. , since similar amount of information Is available to all the investors at same amount of time, all the stocks in the market are perfectly priced and no investor can beat the market returns. However, whether the stock markets are efficient or not, the topic is still in debate despite of ...

Article Summaries

Article Summaries

Weibo has been performing well in China the same way in which Twitter is doing across the world. It is perhaps due to this reason that the owners have decided to initiate an IPO in the US. As is expected of any company planning an IPO, Weibo has to provide the IPO filing to prospective investors (read the general public). The author clearly highlights the major details embedded within the filling in a bid to inform his readers on what each of them means. Specifically, the author emphasizes on the risk factors directly affecting the company. This ...

In the article, ‘Trying to See Apple from a Different Angle’, Jeff Somer on February 1, 2014, has explained about the Apple Incorporation, which has started its business in 1970, and then worked hard and retained its identity. Now Apple Incorporation is the biggest company of the world and is enjoying favorable investments from the investors. The author further tells that, in the year 2010, the company has generated 52% revenue, which has risen to 66% in 2011 and then fell to 45% in the year 2012. Recently in 2014, the company has introduced iPhone, which has gained remarkable ...

Currency Hedging

Introduction Currency risk is an intrinsic aspect in the foreign market. The enterprises that operate in this environment have a variety of derivative instruments that can be used in connection with these risks. Managing these risks requires enterprise wide coordination otherwise; these international exposures will affect the value of the currency. Therefore, global equity portfolio managers have resulted in a variety of methods to currency hedging to manage the uncertainties in the foreign market. This is so because currency hedging reduces the financial risk, which occurs in the foreign market. Therefore, the paper will evaluate the currency hedging and ...