Questions tagged [corporate-finance]
The corporate-finance tag has no usage guidance.
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Who are the largest customers of the Vanguard group?
According to Wikipedia, Vanguard is owned by its customers. Is there a list available of the largest customers of the Vanguard group?
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55 views
Connection assets under management and net worth
Could you help me to understand the connection between assets under management and net worth?
In my understanding, if a corporation has $X$ dollars Assets Under Management, and if a shareholder owns $...
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23 views
Probit and DiD - Finance
I have been working on a project for a good long time. I am relatively new to finance and regressions in R, so I would be extremely grateful for every response I get.
My goal with this task is to ...
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16 views
Calculating IT Spend Ratio
I have three columns - Sales(Revenue), Employee Count and Industry of n Companies in my sheet, how do I use them to calculate the IT Spend Ratio of these companies using the above info?
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16 views
Corporate Finance introduction and mentoring for Non-Finance - topics to focus on?
I work for an international engineering company and have been in an engineering position for 10+ years. As part of the career development I have expressed interest to learn more about the finance side ...
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1answer
28 views
Why is having a big corporation keep its money in foreign countries a bad thing in the public's eye?
I have been trying to dig deeper into corporate tax evasion, and how it works, to really determine if they're doing something bad or what. I don't know much about economics or politics, but I hear ...
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12 views
Is the yield on high coupon-bonds more likely to be higher than on low-coupon bonds when the term structure is upward or downward sloping?
Currently I'm learning about the principles of corporate finance. More specifically I'm learning about valuing bonds. I have the follow question:
Is the yield on high coupon-bonds more likely to be ...
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22 views
Dupont Analysis
I'm having quite a bit of confusion regarding the Dupont analysis formula particularly the asset turnover ratio. Should the asset turnover ratio be calculated using total asset or average asset?
My ...
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1answer
82 views
Shouldn't big tech want to split up?
This is a reference request.
Where can I find an analysis that explains why companies like Microsoft and Amazon don't split into two. At a certain point diseconomies of scale would kick in.
I would ...
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133 views
Calculating Tobin's q from the financial statements of publicly listed companies
I'm interested in doing some empirical analysis of firm's investment behavior using financial statements (such as asset, working capital, operating cost, etc). One variable I want to manually ...
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23 views
where can I download financial statements (or financial data) for firms in many industries in one shot?
I'm interested in doing some empirical analysis of firm's financial statements (such as asset, working capital, operating cost, etc) for many firms across industries over the past few years. Where can ...
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25 views
Is there any reference for labour finance?
Is there any recent reference for labour finance, in which labour finance relating to financial statements? And what are the alternative name for "labour finance"?
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238 views
How to justify the treatment and control groups for Difference-In-Difference with staggered implementation of laws?
A. Background:
Dong, 2019 and Dasgupta, 2019 used the same way to generate the treatment and control groups because they all learn about the impact of the same laws on different dependent variables. I ...
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1answer
85 views
Shouldn't corporate tax be calculated based on EBIT instead of EBT?
When I was studying Corporate Finance in university, I was surprised to learn that it is more advantageous for corporations to take more debt (even if they don't need to) because it creates tax shield ...
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1answer
59 views
Bankruptcy Vs default
If a company files for bankruptcy, how come its stock still trades ?
E.g. On June 17, Wirecard was valued at more than $14 billion. Eight days later, it filed for the German equivalent of bankruptcy. ...
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1answer
51 views
Would the market stabilize if companies paid taxes on revenue instead of gross income?
Note: there is a closed question that is similar (https://money.stackexchange.com/questions/126677/paying-taxes-revenue-vs-taxes-profit) but the response offers a perspective that I would like to ...
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23 views
Why might it make sense to buy bonds in a company facing restructuring?
In this video, Sal Khan states, "If you really thought that Lehman Brothers in the long term was going to come back, what you might want to do is somehow try to become one of its bondholders, and ...
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1answer
45 views
Where to learn financial modelling concepts and skills?
I'm looking to learn more about the financial analysis of a business. Things like unit economics calculation, income statement, free cash flow analysis, a valuation calculation, etc.
Can you recommend ...
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1answer
143 views
Does development aid, negatively effect the development of developing countries?
Development aid
Development aid or development cooperation (also development assistance, technical assistance, international aid, overseas aid, official development assistance (ODA), or foreign aid) ...
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63 views
Why is the ECB asking EU banks to hold off on buybacks?
In the wake of the Covid-19 pandemic, the ECB requested EU banks not to pay dividends as well as refraining from buying back their own shares until the end of 2020. And that even if they had already ...
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1answer
22 views
Why is a company allowed to change the number of shares it’s divided into after its IPO?
I read that even after an IPO, a company can change the number of shares that it’s divided into based on a board vote. What’s to prevent them from arbitrarily increasing the number of shares to raise ...
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1answer
52 views
What does Eugene Fama mean "the amount of debt that's financed with equity isn't put aside"?
I transcribed A Symposium with 2013 American Nobel Laureates at Embassy of Sweden, Washington - YouTube starting at 56:00.
The moderator, AAAS CEO Alan Leshner, claims
Locking up that kind of money ...
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1answer
53 views
Why is it relevant for a company to use dividends to incentivize shareholders to maintain ownership of the company's stocks?
I was reading the definition of "Bottom Line" on Investopedia and one of the reasons companies increase their bottom-line is to issue payments (dividends) to stockholders as an incentive to ...
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1answer
98 views
Who holds the Reverse Repo and Repo respectively in a Repurchase Agreement?
According to investopedia.com in this definition
A reverse repurchase agreement, or "reverse repo", is the purchase of
securities with the agreement to sell ...
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1answer
141 views
Risk neutral probability for each of 3 states
I need help to find the risk-neutral probability for states 1,2 and 3
I have two stocks: A and B.
The price of A today is 180 and in a year it will be worth 288 (S1), 180 (S2) or 120 (S3);
The ...
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1answer
264 views
Economic Profit and the Return on Invested Capital
In my finance classes, I always learned that the a firm earning an "economic profit" is one for which its return on invested capital (ROIC) is greater than it's opportunity cost of capital (usually ...
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54 views
Financial Economics and Corporate Finance
In pg 4 of Principles of Corporate finance (Allen et al, 2017), in the context of explaining financing decisions are less important that investment decisions, there is a line that says:
"Financial ...
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50 views
Why was the Glass-Steagall Legislation enacted?
I realize that the part of the reason the Glass-Steagall act was enacted was to ensure that banks do not invest customer's deposits into risky securities, but what was the rationale for separating ...
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25 views
Best way to measure company size relative to world GDP
I'm working o a model where corporate revenue / world GDP is a dependent variable of some stuff (based on the model proposed in this paper: http://www.scielo.br/scielo.php?pid=S1807-76922009000200002&...
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2answers
189 views
Corporate Finance Book Recommendations
Can you share your recommendations for corporate finance if you have any?
A slightly more detailed version would be better:
For example, something like:
Advanced Undergrad: Varian's $\textit{...
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1answer
589 views
How to calculate capital investment?
So i have this question:
After spending 3 million on research, Better Mousetraps has developed a new trap. The project requires an initial investment in plant and equipment of 6 million. This ...
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1answer
436 views
Interpeting equivalent annual cash flows
So i have this question:
RainMan Inc. is in the business of producing rain upon request. They must decide between two investment projects; a new airplane for seeding rain clouds or a new weather ...
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1answer
18 views
Relevance of change in Inventory in calculation of Free Cash Flow
Free cash flow (FCF) can be obtained by
$$
\text{FCF}=(\text{Revenues}-\text{Cost}-\text{Depreciation})(1-\tau)+\text{Depreciation}-\text{Capital Expenditures}-\Delta(\text{Net Working Capital})
$$
...
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2answers
246 views
Does commercial paper usually carry a higher yield than corporate bonds? Why?
In Banking: A Very Short Introduction, Goddard and Wilson write:
[Commercial paper] usually carries a higher yield than corporate bonds.
But aren't corporate bonds longer term than commercial ...
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1answer
48 views
Can corporate tax loss carryforward function like a sort of insurance policy?
I'm a graduate student in mathematics, with a casual knowledge of economics, so please let me know if this question is a non-sequitur or off base.
Here's the intuition I'm trying to capture: Suppose ...
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1answer
54 views
How can a company run out of cash when its stock prices is dropping?
For instance, in 2008, the Royal Bank of Scotland saw its stock price drop by ~30% in a day, and it was apparently impossible for the bank to make it till the end of the day because it would run out ...
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1answer
50 views
Black-Scholes Model question
Suppose a company has a zero coupon bond with face value of 200 million which matures in a year. Its assets has a market value of 300 million. The standard deviation is 30% and the risk free rate is ...
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64 views
Present Value Analysis
For my exmaple, we have machine A with an initial cost of 15K and O&M of 2k per year for the next 4 years. After 4 years, the O&M rise to $2.7k per year. No salvage value and life span of 20 ...
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4answers
93 views
How should I evaluate my startup?(specific question)
If I have a startup that produces a product that I estimate to sell 100/per month, with 50%profit, and $200 is the customer price of each product, How can I evaluate this business to find investors?
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38 views
If I have a £25,000 loan, in a balance sheet do I include it in the Cash as well as a liability? [closed]
I'm new to all this and balance sheets are extremely confusing.
In this example I've received a £25,000 loan from the bank, it has a fixed interest rate of 6% to be paid over 1-5 years.
This is the ...
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2answers
87 views
Where are bank loans in balance sheet?
I am looking at the balance sheet of Coca-Cola (https://www.marketwatch.com/investing/stock/coke/financials/balance-sheet), but I cannot guess where loans with banks are. These liabilities accounts ...
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23 views
Best texts on cash usage and share buybacks in companies
What would be a good reference for how companies utilise their cash to conduct share buybacks. I am trying to understand how share buybacks affect the valuation of a company.
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Why are share repurchases particularly accretive?
From the "Manual of Ideas"...
VALUE CREATION VIA BUYBACKS Share repurchases tend to be particularly accretive in the case of companies generating cash from operations while trading below tangible ...
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3answers
243 views
CAPM goodness of fit
I want to test the CAPM. I have collected monthly data from 1-9-2012 to 1-9-2017. I have data from the return of Standard&Poor's 500 and data from various US companies. The beta's seem right, but ...
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1answer
566 views
Adding a non-binding constraint to the objective function
I am dealing with a constrained optimization problem found in Tirole's Theory of corporate finance. My question is not related to the details of this model, but just to provide some context, we are ...
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28 views
Corporate use of offshore cash
Recently Microsoft floated a \$17 billion bond to finance the purchase of LinkedIn (remind me to delete my account).
Some might wonder why a company with nearly \$100 billion in cash would need to ...
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64 views
Confusion about Balance sheet equation and sum of the cashflows
I was solving a business case I had at school where i just needed to compute the cashflows (CF). Once I have done so I wanted to check that my calculations are all good by verifying that the following ...
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57 views
Is corporate tax an argument in equal income tax (from labour and capital) debate and does the return on capital depend on rate of the corporate tax?
In our country we have 25% personal income tax on labour, 15% corporate tax on corporations and 10% personal income tax on income from capital (e.g. dividends). Pundits in our country are saying that ...
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100 views
Is the shareholder-creditor conflict the same as debt-equity conflict?
I am having some problems understanding the difference between shareholder-creditor conflict and debt-equity conflict.
I understand what the shareholder-creditor conflict is about, but when I try to ...
