Corporate Finance And Financial Strategy Optimising Corporate And Shareholder Value 1st Edition Tony Davies - Solutions

Unlock the potential of "Corporate Finance And Financial Strategy: Optimising Corporate And Shareholder Value" with our comprehensive resources. Access the online answers key and solution manual to tackle every challenge this textbook presents. Our solutions PDF includes detailed, step-by-step answers to solved problems, ensuring you master each concept. Whether you're preparing with the test bank or seeking chapter solutions, our instructor manual guides you through with precision. Enhance your understanding with our questions and answers section, all available for free download. Embrace the opportunity to excel in corporate finance with our expertly crafted materials.

‘MBOs generally meet the selfish aspirations of a handful of ambitious managers, whereas MBIs may provide a more professional and experienced approach to taking a business forward.’ Discuss.
Discuss and critically examine the procedure followed in the privatisation of a public company with which you are familiar.
‘The financial restructuring of a company is really only a means of delaying the inevitable death of the business.’ Discuss.
‘The position of shareholders, managers, and employees in M&As is largely disregarded by both predator and target companies.’ Discuss.
‘There is no real defence against a takeover bid from a determined predator company.’Discuss.
‘The ways in which M&As are financed do not have any influence on their subsequent success.’ Discuss.
‘Takeovers merely satisfy the inflated egos of power-hungry company bosses.’ Discuss.
Discuss the possible behaviour of share prices during a merger, the impact of a merger announcement on the share prices of the two companies involved, and how this may be measured.
Discuss the possible benefits to the economy of any country resulting from a high level of M&A activity.
Discuss the likely winners and losers following the possible acquisition of Marks &Spencer plc by someone like Philip Green.
‘Once a company has moved into its decline phase then its inevitable demise is certain to occur very quickly.’ Discuss.
‘The ways in which dividends are paid is irrelevant to the company and its shareholders.’Discuss.
Company chairman: ‘If we continue to pay no dividends for the foreseeable future and reinvest all of the earnings of the business then shareholders will be happy because of the value that will be added to the company.’ Discuss.
‘Shareholders always gain if they exercise their rights in a rights issue, and they always lose if they do not.’ Discuss.
‘An IPO is inevitable if a company expects to grow indefinitely.’ Discuss.
‘The returns of 30% to 40% per annum expected by VCs are too high and restrict the growth potential of a business.’ Discuss.
‘A shareholder is indifferent as to whether a dividend is paid or not.’ Discuss.
‘Earnings per share (eps) tell shareholders everything they need to know about a company.’ Discuss.
‘Every business should aim to maximise its number of BCG “cash cows”.’ Discuss.
‘An interest rate swap agreement cannot really be a win–win situation for the two companies involved and the bank arranging the swap – someone must lose.’ Discuss.
‘ Derivatives are not a new invention, but an unnecessary evil that have been with us for a very long time.’ Discuss.
‘Continuing economic instability worldwide has been inevitable ever since the USA suspended the convertibility of US$ into gold in the early 1970s.’ Discuss.
Chairman of a UK plc: ‘The calculation of WACC is a straightforward matter and I don’t see why it should be any more complicated if we are using it to evaluate an investment in an overseas subsidiary.’ Discuss.
‘The cost of setting up an overseas subsidiary far outweighs any benefits.’ Discuss.
‘Internationalisation is the only way that medium-sized and large companies can survive and prosper in the 21st century.’ Discuss.
‘A manufacturing company that adopts a policy of minimising its operating cycle may achieve short-term gains in profitability and cash flow but may suffer longer-term losses resulting from the impact on its customer base and its ability to avoid disruption to its production processes.’ Discuss.
‘Management of working capital is simply a question of forcing suppliers to hold as much inventory as we require for order and delivery at short notice, and extending payment as far as possible to the point just before they refuse to supply, and putting as much pressure as possible on customers
If working capital is the ‘lubricant’, a company’s investment in its operations, that enables ‘the engine’, its investment in non-current assets, to be most effectively exploited, how does the company choose the best method of lubrication and how often should this oil be changed?
‘It is impossible to make accurate predictions about a company’s activities even over a short-term period of say six months, therefore strategic financial plans of five and 10 years have no value at all.’ Discuss.
‘ The area of financial planning is a minefield of potential problems and conflicts.’ How should these problems and conflicts be approached to ensure that the performance of the business is aligned with its primary objective of shareholder wealth maximisation?
‘Financial plans are not accurate because in general they do not differentiate between the behaviour of variable and fixed costs.’ Discuss.
‘Economic value added (EVA™) is nothing more than just flavour of the month.’ Discuss.
‘Lies, damned lies, and statistics.’ In which of these categories do you think ratio analysis sits, if at all?
In what ways may the performance review process be used to anticipate and react to change?
‘The cause of the 2008 global financial crisis was the USA housing market.’ Discuss.
‘The cause of the 2008 global financial crisis was excessive borrowing’. Discuss.
‘The cause of the 2008 global financial crisis was unethical banking.’ Discuss.
‘All banks operate using the same rules and regulations.’ Discuss.
Discuss the factors that an international company should consider in the raising of international debt capital and in determining its debt policy.
‘The only gain I can see from the use of leasing for our company is that it is a method of off balance sheet financing.’ Discuss.
‘ The growth in the use of various forms of hybrid finance has complicated the financing process, and has provided no real benefit to companies or investors.’ Discuss.
The ex-owner/manager of a private limited company recently acquired by a large plc, of which he is now a board member, said: ‘This company has grown very quickly over the past few years so that our sales revenue is now over £20m per annum. Even though we expect our revenue to grow further and
‘If you don’t take a risk you will not make any money.’ Discuss.
‘This discounted cash flow business seems like just a bit more work for the accountants to me. Cash is cash whenever it’s received or paid. I say let’s keep capital investment appraisal simple.’ Discuss.
‘I know that cash and profit are not always the same thing but surely eventually they end up being equal. Therefore, surely we should look at the likely ultimate profit from a capital investment before deciding whether or not to invest?’ Discuss.
In the long run does it really matter whether a company is financed predominantly by ordinary shares or predominantly by loans? What’s the difference?
The marketing manager of a large UK subsidiary of a multinational plc said, ‘Surely the interest rate that we should use to discount cash flows in our appraisal of new capital investment projects should be our bank overdraft interest rate. I don’t really see the relevance of the weighted
‘In the real world the CAPM does not appear to be valid, therefore it is not a useful tool for dealing with required returns and systematic risk.’ Discuss.
‘Inappropriate management of financial risk may result in a company going out of business.’Discuss.
‘It is not practical for individual investors to apply Markowitz’s portfolio theory to their stock market investments.’ Discuss the validity of this statement and whether or not and how Markowitz’s portfolio theory may be applied by individual investors.
In an age of increasingly sophisticated computer systems, is the traditional role of the auditor coming to an end?
‘Everyone who embarks on a career in industry or commerce aspires to becoming a director of their organisation, because then all their troubles are over! Directors just make a few decisions, swan around in their company cars, and pick up a fat cheque at the end of each month for doing virtually
‘I pay my auditors a fortune in audit fees. I look upon this almost as another insurance premium to make sure that I’m protected against every kind of financial risk.’ Discuss.
Discuss, and illustrate with some examples, how far you think the UK Corporate Governance Code goes to preventing the kind of corporate excesses we have seen in the recent past.
Why do you think there may have been such a proliferation of financial scandals in the USA, UK, and Europe during the 1990s and 2000s?
Discuss the increasing popularity of share option schemes as an important element of executive remuneration.
In recent years, large financial institutions such as mutual funds and pension funds have increasingly become the owners of shares in the United States, and these institutions are becoming more active in corporate affairs. Discuss what the implications of this trend may be with regard to agency
Company ownership varies around the world. Historically, individuals have owned the majority of shares in public companies in the United States. In Germany and Japan, however, banks, other large financial institutions, and other companies own most of the shares in public companies. Discuss whether
Can the goal of maximisation of the value of the company conflict with other goals, such as avoiding unethical or illegal behaviour? Do the goals of, for example, customer and employee safety, the environment, and the general good of society fit within this framework, or are they essentially
The CEO of a diversified multinational company said: ‘So long as I continue to report an increase in eps for the business each year then I am doing my job and the shareholders should be pleased.’ Discuss.
‘ So long that, as a company, we continue to report profits each year then the shareholders will have no reason to complain.’ Discuss.
The managing director of a large public limited company stated: ‘I’ve built up my business over the past 15 years from a one-man band to a large plc. As we grew we seemed to spend more and more money on accountants, financial managers, and auditors.During the next few months we are
Why may an MBO be popular with the managers of a business?
What are the advantages and disadvantages of the various ways in which an MBO may be financed?
Explain why a plc may wish to return to private ownership and become a Ltd company.
Explain the goals of a typical management buy-out (MBO), and describe the business and financial strategies that may be used to achieve these goals.
Outline the process followed in the privatisation of utilities in the UK.
Explain the differences between a spin-off and a demerger, and why a large group of companies may prefer one strategy to the other.
How may debt restructuring be used as a financial strategy in response to an internal issue faced by a company?
Outline the reasons why a company may consider reorganisation or restructuring.
Outline the types of problem faced by employees and managers after their company has been taken over.
Describe and explain the range of defence strategies used by companies facing a hostile takeover bid.
How may profit announcements, and changes in dividend policy, be used by target companies to provide defences after a takeover bid has been made?
Describe the various forms of equity restructuring that may be used by a target company to avoid its being taken over.
How may eps be enhanced from a takeover?
In what ways does a cash purchase of a business differ from a vendor placing?
Why is the method of financing important in M&As?
Critically compare the use of net asset valuations and earnings valuations of companies.
Outline the reasons why shareholders may require valuations of their businesses.
Describe the motivation for takeovers and analyse why target companies often employ defence strategies in response to a hostile takeover.
Consider why a growth in eps may not necessarily be reflected in a growth in share price, and support this with examples.
Which Acts of Parliament and financial institutions monitor and control merger and acquisition activities in the UK?
Differentiate between the financial motives and managerial motives for M&As, and illustrate both with some examples.
Describe six justifications for M&As.
Outline the business and financial reasons for company mergers.
In what ways may market imperfections be exploited by takeover activity?
Explain the fundamental principles underlying M&As.
How and why do mergers and acquisitions take place?
Outline the ways in which a merger differs from a takeover.
Describe the financial strategies that a company may adopt in order to delay its decline.
Explain how a conflict of interest between the shareholders and directors of a company may manifest itself during the decline stage of its life cycle.
Why do mature companies so often become the targets for hostile takeovers?
Explain the dividend information content effect and the ways in which this impacts on shareholders.
Explain three of the reasons why companies pay dividends to shareholders.
Explain the tax and cash flow planning implications with regard to a company’s dividend policy.
Outline the ways in which debt financing may benefit a mature company.
How does a company’s risk profile change after it has moved into its mature phase?
Describe the period of turbulence that occurs between a company’s growth phase and its mature phase.
In what ways may a growth company finance its investments in new projects and how are these linked to the way in which such investments may be evaluated?
Outline the difficulties that may be faced by a company that is involved in an IPO.

Showing 1 - 100 of 4714

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Corporate Finance And Financial Strategy Optimising Corporate And Shareholder Value 1st Edition Tony Davies - Solutions

Step by Step Answers