StudentShare
Search
Free

# Global Finance - Essay Example

Summary
Q1) Thomas brothers is expected to pay a \$0.50 per share dividend at the end of year (i.e.D1 = \$0.50). the dividend is expected to grow at a constant rate of 7 percent a year. The required rate of return on the stock Ks, is 15 percent. What is the value per share of the company's stock

## Extract of sample "Global Finance"

Topic: Global Finance Q1) Thomas brothers is expected to pay a \$0.50 per share dividend at the end of year (i.e.D1 = \$0.50). the dividend is expected to grow at a constant rate of 7 percent a year. The required rate of return on the stock Ks, is 15 percent. What is the value per share of the company's stock
PV = D0 (1+g)/(ks - g)
PV = \$0.50 (1+.07)/(15-.07)
PV = \$0.50 (1.07)/(14.93)
PV = \$0.50 (.072)
PV = \$0.036
The value per share of the company's stock is \$0.036
Q2) You are considering an investment in the common stock of Kellers Corp. the stock is expected to pay dividend of \$2 a share at the end of the year (D1= \$2.00). The stock has a beta equal to 0.9. The risk free rate is 5.6 percent. And the market risk premium is 6 percent. The stock dividend is expected to grow at a constant rate g. the stock currently sells for \$25 a share. Assuming the market is in equilibrium. What does the market believe will be the stock price at the end of 3 years ( That is , what is P3)
Expected Return = (Beta x Market Risk Premium) + Risk Free Rate
Expected Return = (.09*.06) + 5.6
Expected Return = (.0054) + 5.6
Expected Return = 5.6054
The stock price at the end of 3 years will be (5.6054 + \$25) x 3 = (\$30.6054) x 3 = 91.82.
The stock price at the end of 3 years will be \$91.82
Q3) Martell Mining Company's ore reserves are being depleted. So its sales are falling. Also, its pit is getting deeper each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 5 percent per year. If D0=\$5 and Ks=15%, what is the value of Martell Mining's
PV = D0 (1+g)/(ks - g)
PV = \$5.00 (1+.05)/(.15-.05)
PV = \$5.00 (1.05)/(.1)
PV = \$5.00 (10.5)
PV = \$52.50
The value of Martell Mining's is \$52.50. Read More
Cite this document
• APA
• MLA
• CHICAGO
(“Global Finance Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Global Finance Essay Example | Topics and Well Written Essays - 500 words. Retrieved from https://studentshare.org/miscellaneous/1532533-global-finance
(Global Finance Essay Example | Topics and Well Written Essays - 500 Words)
Global Finance Essay Example | Topics and Well Written Essays - 500 Words. https://studentshare.org/miscellaneous/1532533-global-finance.
“Global Finance Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/miscellaneous/1532533-global-finance.
Click to create a comment or rate a document

## CHECK THESE SAMPLES OF Global Finance

### The Development of a Single Global Culture Will Benefit Humankind

Social relations show spatial transformation across the world, encompassing both the hazardous and beneficial effects of globalization (Held,2000) and are marked by the intensification of communication flows (Cochrane and Paine, 2004). Such flows as an increase in broadcast activities, satellite channels, Internet, telephony, people to people contact, migration, and proliferation of transnational companies are playing an important role in the development of a single global culture. There is an emergence of diasporic and shared cultural forms across the world that are aided by increasingly porous national boundaries.

According to Cochrane and Paine (2004), the lives of people in one part of the world are affected by even...
6 Pages(1500 words)Coursework

### Global Environment Change

A number of fields are involved in the study of environmental change, such as chemistry, physics, biology, oceanography, etc. In this paper, some of the major global environmental changes will be studied and explored and implications will be provided for the sustainability of the global environment.

Responses to the global environmental challenges have become one of the heated debatable matters around the world, as a number of organizations, researchers, and nations are endeavoring to sustain the continuity of the global environment, where is harmed by different natural and manmade causes. In order to come up with an effective solution, it is very important to understand and go into the core of the global problem. In th...
7 Pages(1750 words)Coursework

### Global Culture on Fast Track

Lifestyles are changing fast to invite international practices. Youths in large numbers are instrumental to change to live in a free environment. They are resisting ‘no change’ attitude and fighting for the new environment where they can express freely what think right to make a modern culture. The change is undergoing automatically and being accepted by most of the resistant quarters.

Globalization does not create a common culture, values, attitude or beliefs as mentioned above. It gives way to a single arena in which people of different cultures interact and present their values for comparisons, analysis, acceptance or rejection on certain standard yardsticks. This is the internationalist version of global...
6 Pages(1500 words)Essay

### Contemporary Managerial Issues in Accounts and Finance

Political theorists like Veblen argued that the separation of corporate ownership from control generates a transfer of power from a minority of stockholders to a group of decisive owners who have the control over the way of access to credit and finance (Roe, 1994, p. 5).
However, contemporary analysts of corporate power contested that dominance and ownership in modern corporations have shifted to a property-less group of managers. Consequently, this current shift of power and control in large modern corporations could usher in ultimate preoccupation over profit rather than non-financial motives. Furthermore, the separation of power and ownership will lead to the destruction of the traditional legal theory of property which en...
23 Pages(5750 words)Literature review

### Fundamentals of Finance

It is the size of the company that decides the role of financial management in a firm. In small firms, financial management is handled normally by the accounting department but in large entities, a separate department under the leadership of its CFO takes care of its financial management. Broadly “the financial manager of a firm plays an important role in a company’s goals, policies and financial success. The financial manager’s responsibility includes financial analysis and planning- determining the proper amount of funds to employ in the firm, i.e. designating the size of a firm and its growth; investment decisions- the efficient allocation of funds to specific assets; financing and capital structure decisions-...
11 Pages(2750 words)Assignment

### Global Warming and Food Production

The carbon fertilization effect of increased carbon dioxide concentration in the atmosphere has an impact on plant growth, which benefits plant growth by facilitating photosynthesis, cannot balance the complex impact of increased temperatures around the world. Thus, although some regions will benefit from global warming, a total reduction in global agricultural production will result. This essay presents a discussion about the impact of global warming on agriculture and food production around the world.
Although the history of the planet earth suggests that for the last million years ice ages have been interspersed with warmer periods, evidence suggests that the average rate of global warming within the recent past has accele...
14 Pages(3500 words)Assignment

### The Importance of Employee Empowerment in the Global World

Empowerment is the authority to make decisions within one’s area of operation without having to get approval; from anyone else. Here the operatives are encouraged to use their initiative to do things the way they like. To this end, the employees are given not just authority but resources as well so that they not only take decisions but implement them quickly. This empowerment means giving the employees the authority to make decisions and providing them with financial resources to implement these decisions (Koch & Godden, 1997 11).
Employee participation and empowerment participation means sharing the decision making power with the lower ranks of an organization in an appropriate manner (Lashley & McGoldrick, 199...
9 Pages(2250 words)Assignment

This section aims at understanding the challenges faced by the United Nations due to political conflicts. In the summer of 2007, an issue in the Politically Speaking, the DPA had highlighted the increased focus on the conflict meditation. This report had also highlighted the interview with the Under-Secretary-General for political affairs. In the interview, he defended the UN against all the criticism and he also highlighted the need for finding political solutions for issues around the world. The interview also highlighted the importance of results to show the effective working of the UN. This interview also highlighted and urged critics to look at the positive along with the negatives of the UN. “The UN has knowledgeable a...
7 Pages(1750 words)Research Proposal

### Global Employee Information and Consultation: Replicating the European Model

A significant step to enhancing the employees’ right to information and consultation is the establishment of the European Works Council (EWC). The EWC Directive (94/45/EC) aims to improve cooperation in transnational companies and to allow trade unions to influence, at least indirectly, the decision-making of corporations (Lockwood and Williams). It requires community-scale undertakings and community-scale groups of undertaking to create this mechanism for regular consultation of the workforce. A ‘community-scale undertaking’ is one with at least 1,000 employees within the Member States and at least 150 employees in each of at least two Member States (Lewis and Sargeant).

An EWC is a forum that would a...
9 Pages(2250 words)Coursework

### Introductory Economics and Finance: Why Governments Regulate Firms and Markets

By government regulation, it is meant by the rules administered by a government or government agency to influence any economic activity which determines the price, types, and standards of products, and most importantly the conditions under which the entry and exit of the firms are possible.

Like death, it is impossible to keep away from regulation in about every aspect of daily life. The business regulation may be classified into two- economic and social (Litan). The economic regulation deals with price controls and the entry limits of the firms into markets. The second type regulation mostly deals with externalities (the outside influences of the company or firm which may or may not be decided by them)

Examp...
6 Pages(1500 words)Assignment