B

a. Outline the three main forms of business organisation and critically discuss the benefits and drawbacks associated with each.b. Discuss and critically compare sensitivity analysis and scenario analysis as means of estimating a project’s risk.c. Clearly explain the difference between systematic risk and non-systematic risk and discuss the relationship between beta and the expected rate of return on an investment.

Your client is evaluating the upside and downside of a potential investment. What stage of the Financial Planning process is this? O Routine Allocation O Indemnification O Assessment

Questions   How would you assess the evolution of the capital structure of LGI? Reflecting on your work in Project 1, would you consider the risk exposure under control? If not, what are your recommendations?   [insert your answer here]     What kind of information do you find valuable in CAPM to guide you in assessing the risk of LGI compared to other firms and the market in general?   [insert your answer here]     3. Identify and differentiate the stakeholders of LGI and explain how each one should perceive and weigh the risk and/or return of the firm.   [insert your answer here]     Would you consider the investment made in Project 4 optimally financed considering the proportion of debt that is bearable by LGI? How did the current WACC in Project 5 depart from the state of the firm in Project 1?   [insert your answer here]       1.If you had to advise a potential investor interested in having a minority stake in LGI, what kind of information would you provide to help the…

Explain how you would evaluate the expected rate of return from the investment (purchasing a company) and the method to evaluate the investment decision. Assess the disadvantages and advantages of the investment method and why the method would provide the most accurate measure for the anticipated rate of return requirement. Justify your recommendation.

Which of the following decision criteria is the easiest to use and very popular among investors? O Payback period. O Internal rate of return. O Average accounting return. Net present value. O Discounted return on investment.

Describe the financial analysis tools you would use to convince management to make the investment you are proposing?

Suppose that the price of an asset equals its fundamentalvalue. What behavioral features might then ensure that investors continue totrade? Answer this question specifically in the context of the models that havebeen taught in your course.

What are two crucial presuppositions we make when we choose to use the present cost of capital of a firm to evaluate the profitability of projects in which we invest? Be thorough.

Consider the following two statements concerning risk analysis: 1. Sensitivity analysis provides clear decision rules concerning acceptance or rejection of an investment project. 2. The risk-adjusted discount rate adds a risk premium to the expected rate of inflation to derive a discount rate for investment projects. Which one of the following combinations (true/false) relating to the above statements is correct?   Select one: a. Statement 1 is False   &   Statement 2 True b. Statement 1 is False   &   Statement 2 False c. Statement 1 is True   &   Statement 2 is False d. Statement 1 is True   &   Statement 2 is True e. None of these answers are correct

Describe the SML in words.  What is it saying about how investors form required rates of return?  Thoroughly evaluate the implications of the SML's message.

1) What is the company's WACC? 2) Should the company take the projects? Assume that the projects have the same risk as an average project for your firm. 3) If one project is depended on the other in a way that the company can only take both projects, should it take it?