Actually, I think I got it, from a formula in the book, P(post)= [V(OpNew)-D(Old)]/N(prior). And if you think about it différently, you have 48 million of debt implying that you can buy 1 million of the shares as repurchase for the recapitalization thus the company would be left with 1.5 m shares -> S=72 thus P(post)=S(post)\N(post) or 72/1,5= 48
Has anyone an idea how to interpret this "10 1/4%" number? It's from the article: CONVERTIBLE BONDS: MATCHING FINANCIAL AND REAL OPTIONS. "August of 1981, the company issued 20-year- convertible subordinated debentures with a 10 1/4% coupon rate"
Hi, so you exclude project M bc of the mentioned reason and only need 10 million for investments. SInce you have 50% equity target cap structure the needed money for investments are 5 million. So you have excess net income of 7287500-5000000= 2287500 and the payout ratio is simply the excess net income divided by the net income which should be sth around 30%.
1 year ago
Does anyone have the solutions for the learning goals?
because (111.91/56.02) would be the 3-year return, and you want the annual (so 1-year) return so you do to the power of (1/3). Its like de-compounding if you want. same applies to example above. There its two years and you want annual so its ^(1/2)
I need your help people! Do we only need to prepare the slides for tomorrow with today's topics or also actually present it? (Coursebook unclear but everybody presenting seems unfeasible to me)
Moreover, IF we need indeed to present it, how long can our presentation take?
Thanks for any answers. :)