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Final Corporation Finance Question Accounting, Finance Coursework

Coursework Instructions:

Need find a Finance major writer use the Finance knowledge to answer!
All the questions will be in the link "FIN Corporation Finance"
For Question 8. The article " Graham-Harvey survey article" in the links.
There is "FIN note" link as reference.
The Question 16(part 1 &2) need in the separate Excel spreadsheet. 1 page
Other questions's answers need in the same Word doc. 9 pages
It's not essay, some questions don't need to write too much, just point out the answers.
Requirements:
1. Answer all questions CLEARLY and CONCISELY.
2. Show ALL work and provide explanations. Answers without work or explanations will NOT receive credit.
3. Label all graphs
4. Provide spreadsheets
5. NEATNESS COUNTS. DO YOUR WORK ESLEWHERE AND THEN TRANSFER YOUR FINAL STEPS AND CALCULATIONS
6. Need to cite the resource you used at the end of reference sheet.
7. Don't need to copy the questions, just label each specific questions' number and get answers.
NEED TO SUMBIT ON THE Turnitin, software to check for plagiarism against other written materials. Make sure you did your own work.
Need find a professional good Finance Major writer use the Finance knowledge to answer the questions, thanks!

 

Corporation Finance Question

  1. Define capital structure and list the key elements of capital structure.  (1/2 page)

 

 

 

  1. Describe the main results of Modigliani and Miller Propositions (I and II) for: ( 1 page)
    1. 1958 model – no taxes, no bankruptcy costs
    2. 1963 model – with taxes, no bankruptcy costs
    3. Tradeoff model – with taxes and bankruptcy costs

In total there are 6 results

 

 

 

  1. 3.      Describe the pecking order theory of capital structure. (1/2 page)

 

 

 

  1. Discuss the importance of game theory in corporate finance; Provide 5 real-world examples. (1/2 page)

 

 

  1. Discuss the motivations for mergers and acquisitions    (1/2 page)

 

 

 

  1. 6.      Discuss the types and motivations for divestures.    (1/2 page)

 

 

  1. Describe the similarities between corporate social responsibility, socially responsible investing, impact investing and thematic investing  (1/2 page)

 

 

 

 

  1. 8.      Summarize the results of the Graham-Harvey survey article on corporate finance in practice (on blackboard).  (1 page).  Article is in the link, please check.

 

 

 

 

  1. Discuss the evolution of shareholder activism (include gadfly, institutional investors, hedge funds). (1/2 page)

 

 

10.  Discuss the difference between angel investing, venture capital, LBOs, private equity. Include 2 companies in each category and list some of their investments.  (1/2 page)

 

 

 

11.  Distinguish between Chapter 7 bankruptcies and Chapter 11 bankruptcies. Cite specific examples. Identify any cases where equity holders have received payout in bankruptcy?  (1/2 page)

 

 

 

12.  Discuss the role of over and underinvestment when a firm is in financial distress. (1/2 page)

 

 

 

13.  Discuss the similarities in dividends, share repurchases, and stock splits/stock dividends. (1/2 page)

 

 

 

14.  How is the quality of corporate governance measured? (1/2 page)

 

 

15.  How is finance different than accounting? Why is CF better than NI for firm valuation? (1/2 page)

 

16.  Basic Leveraged Buyout Problem-Excel Recommended (Use Excel to solve )  1 page

Part 1)

A Private Equity firm acquires XYZ Corp., which generates $100 million in EBITDA at the time of the deal, for a 10x EBITDA purchase multiple and funds the deal with 60% Debt.    (Hint: Entry Enterprise Value = EBITDA * Multiple).

 

The company’s EBITDA grows to $150 million by Year 5, but the exit multiple (valuation at which the PE sells the XYZ Corp.) drops to 9x EBITDA. XYZ Corp. repays $250 million of Debt throughout the course of the investment and generates $50 million in extra Cash by end of Year 5 as well. Calculate the IRR of the investment when the Private Equity buyer sells XYZ Corp at the end of Year 5.

(Hint: Find Entry and Exit Equity Value to calculate IRR)

 

Part 2)

Suppose the Private Equity firm wanted to achieve a higher IRR for the investment in XYZ Corp., what are some ways to increase this deal’s returns?

 

 

BONUS QUESTION (MANDATORY).    (1/2 page)

Provide your best joke. Use visual aids as necessary.

Coursework Sample Content Preview:
Corporation Finance Question
1 Define capital structure and list the key elements of capital structure. (1/2 page)
Capital structure is the funding of a company to subsidize its operations and long-term performance which is composed by various, critically-arranged sources – debt and equity, for example (Boodhoo 2009). However, there is no universal form on how companies build their capital structure. Nonetheless, theorists created frameworks to better comprehend how firms maximize their capital structure. Some of these theories are tradeoff theory, which is focused on how companies mix their equity and debt finance by looking at costs and benefits’ corresponding; and pecking order theory, which suggests that companies prioritize internal financing then debt to provide for their capital expenditure before resorting to equity (Myers 2001).
According to Gulati (1978), there are six key elements of capital structure. These are capital mix, terms and conditions firms, currency firms, financial market segments, maturity and priority, and financial innovations. All of these are important to consider when it comes to balancing the mix between debt and equity for the company.
2 Describe the main results of Modigliani and Miller Propositions (I and II) for: ( 1 page)
1 1958 model – no taxes, no bankruptcy costs
In Modigliani’s and Miller’s First Proposition under the 1958 Model (no taxes), they concluded that the value of the unlevered firm is equal to the value of a levered firm. Thus, in order to get optimal investments, investors can borrow money to purchase securities of unleveraged firms, when they are undervalued as compared to the other. However, it must also be noted that this proposition can only exist with three important assumption requisites which are (1) absence of taxes, (2) zero-cost transactions, and (3) there are same rates for both individuals and corporations CITATION Mil88 \l 1033 (Miller, 1988).
Comparably, M&M’s Proposition II (no taxes) suggests that despite the more favorable feature of debts (pecking order) compared to equity, the firm cannot rely too much on this kind of resource for it would still result in an increased cost in buying equities. Thus, it is best to have the right balance between them.
2 1963 model – with taxes, no bankruptcy costs
Under the 1963 Model, M&M’s First Proposition suggests that when taxes are added, the investors ROE has a direct correlation with the risks associated with acquiring debt from external sources. However, this can be assumes that the borrowing rates and the same and there are zero-costs transactions.
Under their second proposition (no taxes), M&M suggested that choosing equity distribution as compared to low quality debts would be better than the other way around. This is because the high reliance on low quality debt could lead to the firm’s failure to pay its financial obligations.
3 Tradeoff model – with taxes and bankruptcy costs
The third mode, provides that using a tailored approach would be better since it would help the firm in creating the best type of capital structure and budgeting. Accordingly, a tailored approach would also give the management an increased fi...
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