TotalFinaElf – Vernimmen not hesitate to use the e-mail of the web site www. At this price, no value would be created for JV. If so, how much value should it have created for JV? Work out which is the best criterion for determining whether the acquisition of FGA is in the financial interests of JV. Accordingly, the last column of the table in appendix 2 is wrong, since WACC was calculated with the assumption that the cost of equity and the cost of borrowing are the same, whatever the financial structure. But this has nothing to do with the creation of value!
The NPV should thus be calculated at 7. Would your answer change depending on whether the transaction was financed entirely by debt or entirely by equity? Divorce is not allowed in the Risk-Return pair www. Since the required rate of return on an asset only depends on the risk of this asset, it does not depend on the financial structure. Answers to Self Test Questions. The market for foreign exchange can be viewed as a two-tier market. Accordingly, the last column of the table in appendix 2 is wrong, since WACC was calculated with the assumption that the cost of equity and the cost of borrowing are the same, whatever the financial structure.
At the most, if it is to avoid destroying value, JV could increase its offer by the amount of NPV, i. But there is no creation of value as such and this criterion cannot be relied on for judging whether the acquisition of FGA was a good thing.
It does not measure the creation of value, and is thus not a relevant criterion for determining whether or not investing in FGA was worthwhile. Stjdy, before NPV can be calculated, future flows should be accurately forecast, any synergies between JV and FGA measured and included into the calculation, vernkmen an appropriate discount rate used. The benefit to the MNC is the difference between the face value of the concessionary loan The Sanford Guide to Antimicrobial.
Financial analysis of Steria.
A study on the perception of Continental Europe’s. And since NPV is positive, the transaction was worth it. The market for foreign exchange can be viewed as a two-tier market.
A study of European banks market and AXA Financial – Vernimmen. Good financing never cancels out a bad investment!
FGA case study – suggested answers – Vernimmen –
If the acquisition had been financed by debt, the financial costs of the acquisition would have to be factored in, but this would not change the line of reasoning. Was this transaction worth it? The central element of this case study is the criteria on which investment decisions are based. Answers to Self Test Questions. Answers An unusual case of renal failure: The return on an asset does not only depend on its performances as such, but on the way in which the acquisition is financed. Learn how we and our ad partner Google, collect and use data.
Return on equity is an accounting measure of profitability.
Etude de cas de finance d’entreprise
Accordingly, the best criteria for choosing an investment, whatever that investment may be, is NPV since it measures the creation of value resulting from the investment. Broverman, and references are also made to the exam catalog reference, LM3 – Loss In other words, this bears no relation to whether the investment acquisition of FGA was worthwhile or not. studyy
An unusual case of renal failure: HEC Majeure Finance The Marketing manager of AMK Would your answer change depending on whether the transaction was financed entirely by debt or entirely by equity? At this price, no value would be created for JV.
Medica – Vernimmen Please send any questions on this case study to the author via the mail box on the web site www. If JV invests in the insurance sector in France, it will require the required rate on investments in the insurance sector vfrnimen France, which is 7. And now, to the heart of the matter! See – Vernimmen Answers.
: Etude de cas de finance d’entreprise
From a financial point of view, an investment is only worthwhile if it generates a set of positive flows, the present value of which is higher than the amount invested. Case Study Case Study. The performance of banks during the financial crisis.