Principles of Corporate Finance
International Risk Taiwan 3.80 .120 .47 Kazakhstan 2.36 .147 .35 Brazil 3.80 .160 .62 Argentina 3.52 .416 1.46 σ Ratio coefficie ...
Unbiased Forecast w Given three outcomes and their related probabilities and cash flows we can determine an unbiased forecast of ...
Asset Betas Cash flow = revenue - fixed cost - variable cost PV(asset) = PV(revenue) - PV(fixed cost) - PV(variable cost) or PV( ...
Asset Betas PV(revenue) B PV(asset) PV(revenue) B PV(variable^ cost) PV(revenue) B B PV(fixed^ cost) variable cost asset revenue ...
Asset Betas = − = PV(asset) B 1 PV(fixed^ cost) PV(asset) B B PV(revenue) - PV(variable^ cost) revenue asset revenue ...
Risk,DCF and CEQ Example Project A is expected to produce CF = $100 mil for each of three years. Given a risk free rate of 6%, a ...
Risk,DCF and CEQ Example Project A is expected to produce CF = $100 mil for each of three years. Given a risk free rate of 6%, a ...
Risk,DCF and CEQ Example Project A is expected to produce CF = $100 mil for each of three years. Given a risk free rate of 6%, a ...
Risk,DCF and CEQ Example Project A is expected to produce CF = $100 mil for each of three years. Given a risk free rate of 6%, a ...
Risk,DCF and CEQ Example Project A is expected to produce CF = $100 mil for each of three years. Given a risk free rate of 6%, a ...
Risk,DCF and CEQ Example Project A is expected to produce CF = $100 mil for each of three years. Given a risk free rate of 6%, a ...
Risk,DCF and CEQ Example Project A is expected to produce CF = $100 mil for each of three years. Given a risk free rate of 6%, a ...
Risk,DCF and CEQ Example Project A is expected to produce CF = $100 mil for each of three years. Given a risk free rate of 6%, a ...
Risk,DCF and CEQ w The prior example leads to a generic certainty equivalent formula. t f t t t r CEQ r C PV ( 1 ) ( 1 + ) = + = ...
u A Project Is Not a Black Box Principles of Corporate Finance Brealey and Myers Sixth Edition Chapter 10 ...
Topics Covered w Sensitivity Analysis w Break Even Analysis w Monte Carlo Simulation w Decision Trees ...
How To Handle Uncertainty Sensitivity Analysis - Analysis of the effects of changes in sales, costs, etc. on a project. Scenario ...
Sensitivity Analysis Example Given the expected cash flow forecasts for Otoban Company’s Motor Scooter project, listed on the ne ...
Sensitivity Analysis Net Cash Flow - 15 3 Operating cash flow 3.0 Profit after tax 1.5 .Taxes @ 50% 1.5 Pretax profit 3 Deprecia ...
Sensitivity Analysis Example - continued Possible Outcomes Fixed Cost 4 bil 3 bil 2 bil Unit Var Cost 360,000 300,000 275,000 Un ...
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