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What is a mixed enterprise?
Mixed enterprise is a corporate entity combining public and private equity.
What corporate characteristic causes the rate of return and rate of equity percentage to be different?
The total liabilities because Assets = Liabilities + Owner's Equity. Corporations can borrow money to finance their company, therefore however much you borrow affects assets and owner's equity.
What factors can managers actually influence that affect stock price?
Managers can influence several items which directly effect stock price. The number of shares which the company decides to float will effect the price of the common stock. In addition, since valuation is determined by the present value of future cash flows, managers may influence the magnitude and timing of those cash flows. Any decision which increases the magnitude of those future cash flows would likely increase the common stock price. Similarly, decisions which delay costs and/or move forward expected cash flows would also likely have a positive effect on the valuation of common equity.
How can one determine the Weighted Average Cost of Capital (WACC) for a company"?
To determine the Weighted Average Cost of Capital (WACC) for a company, you need to calculate the weighted average of the cost of debt and the cost of equity. This involves multiplying the proportion of debt and equity in the company's capital structure by their respective costs, and then adding them together. The formula is: WACC (E/V) x Re (D/V) x Rd x (1 - Tc), where E is equity, V is total value of the company, Re is cost of equity, D is debt, Rd is cost of debt, and Tc is the corporate tax rate.
What is the significance of the Modigliani Miller formula in corporate finance and how does it impact capital structure decisions?
The Modigliani-Miller formula is important in corporate finance because it shows that, under certain assumptions, the value of a firm is not affected by its capital structure. This means that the way a company finances its operations (through debt or equity) does not impact its overall value. This can influence capital structure decisions by suggesting that the mix of debt and equity used to finance a company may not significantly impact its value, leading to considerations of factors such as risk, cost of capital, and tax implications when making financing decisions.
In a corporate balance sheet is common stock considered an asset liability or equity?
Equity.
Equity sources of corporate fund raising?
equity sources of corporate fund raising
What is the forula for valuation from income basis?
Equity Charge = Equity Capital x Cost of Equity is the formula.
What is the Purpose of equity valuation?
The purpose of equity valuation is to take several financial indicators into account. The equity valuation includes both real and intangible assets, and offer prospective investors, creditors and shareholders with a correct view of the true value of a society at any applied time.
What does the term common stock mean?
The term common stock is a type of stock that allows shareholders dividends that vary dependent on the performance of a business. It is a type of corporate equity ownership.
State and explain ten maxims of equity?
Equality is equity
What are the different methods of valuation?
There are three primary methodologies of valuation utilised by professionals in the market when valuing a company as a going concern: (1) DCF analysis, (2) similar company analysis, and (3) precedent transactions. These are the most popular techniques for valuing assets that are used in investment banking, equity research, private equity, corporate development, mergers and acquisitions (M&A), leveraged buyouts (LBO), and the majority of financial fields.
What is The equity section of corporate financial statements called?
It's usually called Shareholders Funds but can have other descriptions such as Equity, Equity funding, Long term equity.
Explain the difference between share of customer and customer equity.?
Explain the difference between share of customer and customer equity
What would increase the need for external equity?
a reduction in corporate profits
What are the major subdivisions of the stockholder's equity section of the balance sheet?
major subdivisions of the stockholders' equity section of a corporate balance sheet
Explain why equity is a tricky concept?
Cause it is
