Fundamentals of Corporate Finance Alternate Edition
10th Edition
ISBN: 9780077479459
Author: Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 4.1CTF
Summary Introduction
To discuss: Planning horizon.
Introduction:
The two dimension of financial planning are as follows:
- Planning horizon and
- Aggregation
Expert Solution & Answer
Answer to Problem 4.1CTF
M’s incorporation is in the process of preparing a financial plan for the firm for the next five years. This five year plan is referred as planning horizon.
Explanation of Solution
The span of time required to complete the desired plan is known as planning horizon; it is the first dimension of financial planning. It is also a part of financial decisions. As mentioned above, the period of five year is known as planning horizon.
Conclusion
The planning horizon is the period of length taken by the company on a particular plan which can either be a short term period or long term period. It is ultimately based on uncertainty. The higher the uncertainty, shorter would be the planning horizon.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Boehm Incorporated is expected to pay a $3.20 per share dividend at the end of this year (i.e., D1 = $3.20). The dividend is expected to grow at a constant rate of 9% a year. The required rate of return on the stock, rs, is 15%. What is the estimated value per share of Boehm's stock? Do not round intermediate calculations. Round your answer to the nearest cent.
I have attatched two pictures that show DCF method. Here are the inputs: NOPAT growth: 10% ROIIC: 20% Cost of capital: 6.7%. Reinvement rate:50% Please show me how to calculate a residual value as shown in the picture.
According to the picture, It is a DCF method. But I'm not sure how they got the residual value of 1,642 in 1 year and so on. According to this, I don't know the terminal growth rate. Here are some inputs in the picture: NOPAT growth: 10%, ROIIC: 20%, Cost of capital: 6.7%, reinvestment rate: 10%/20% = 50%. Please Show how to get the exact residual value in the picture shown like first year, second year, third year, and so on.
Chapter 4 Solutions
Fundamentals of Corporate Finance Alternate Edition
Ch. 4.1 - What are the two dimensions of the financial...Ch. 4.1 - Prob. 4.1BCQCh. 4.2 - Prob. 4.2ACQCh. 4.2 - Prob. 4.2BCQCh. 4.3 - Prob. 4.3ACQCh. 4.3 - Prob. 4.3BCQCh. 4.4 - How is a firms sustainable growth related to its...Ch. 4.4 - What are the determinants of growth?Ch. 4.5 - What are some important elements that are often...Ch. 4.5 - Why do we say planning is an iterative process?
Ch. 4 - Prob. 4.1CTFCh. 4 - Prob. 4.2CTFCh. 4 - A firm has current sales of 272,600 with total...Ch. 4 - Prob. 4.4CTFCh. 4 - What is generally considered when compiling a...Ch. 4 - Sales Forecast [LO1] Why do you think most...Ch. 4 - Sustainable Growth [LO3] In the chapter, we used...Ch. 4 - External Financing Needed [LO2] Testaburger, Inc.,...Ch. 4 - EFN and Growth Rates [LO2, 3] Broslofski Co....Ch. 4 - Prob. 5CRCTCh. 4 - Prob. 6CRCTCh. 4 - Prob. 7CRCTCh. 4 - Prob. 8CRCTCh. 4 - Cash Flow [LO4] Which was the biggest culprit...Ch. 4 - Prob. 10CRCTCh. 4 - Prob. 1QPCh. 4 - Prob. 2QPCh. 4 - Prob. 3QPCh. 4 - Prob. 4QPCh. 4 - Prob. 5QPCh. 4 - Prob. 6QPCh. 4 - Prob. 7QPCh. 4 - Prob. 8QPCh. 4 - Prob. 9QPCh. 4 - Prob. 10QPCh. 4 - Prob. 11QPCh. 4 - Prob. 12QPCh. 4 - Prob. 13QPCh. 4 - Prob. 14QPCh. 4 - Prob. 15QPCh. 4 - Prob. 16QPCh. 4 - Prob. 17QPCh. 4 - Prob. 18QPCh. 4 - Prob. 19QPCh. 4 - Prob. 20QPCh. 4 - Prob. 21QPCh. 4 - Prob. 22QPCh. 4 - Prob. 23QPCh. 4 - Prob. 24QPCh. 4 - Prob. 25QPCh. 4 - Prob. 26QPCh. 4 - Prob. 27QPCh. 4 - Prob. 28QPCh. 4 - Constraints on Growth [LO3] Volbeat, Inc., wishes...Ch. 4 - EFN [LO2] Define the following:...Ch. 4 - Growth Rates [LO3] Based on the result in Problem...Ch. 4 - Prob. 1MCh. 4 - Prob. 2MCh. 4 - Prob. 3M
Knowledge Booster
Similar questions
- Could you please help to explain the DMAIC phases and how a researcher would use them to conduct a consulting for Circuit City collaped? What is an improve process performance and how the control improves process could help save Circuit City? How DMAIC could help Circuit city Leaders or consultants systematically improve business processes?.arrow_forwardWho Has the Money—The Democrat or The Republican? Ethical dilemma: Sunflower Manufacturing has applied for a $10 million working capital loan at The Democrat Federal Bank (known as The Democrat). But the person who is evaluating the loan application, Sheli, has determined that the bank should lend the company only $2 million. Sheli’s analysis of Sunflower suggests that the company does not have the financial strength to support the higher loan. However, if Sunflower is not granted the loan for the requested amount, the company might take its banking business to a competitor of The Democrat. Also, The Democrat is having financial difficulties that might result in future layoffs. Sheli might be affected by the bank’s layoffs if her division does not meet its quota of loans. As a result, it might be in her best interest to grant Sunflower the loan it requested even though her analysis suggests that such an action is not rational. Discussion questions: What is the ethical dilemma? Do you…arrow_forwardTASK DESCRIPTION This assignment is comprised of two discrete tasks that each align with one of the learning outcomes described above. One is an informal report based on a five-year evaluation of the financial management and performance of a London Stock Exchange (LSE) FTSE 100 listed company. This report relates to learning outcome one. The second task, covering learning outcome two, is an essay on a particular aspect of financial-decision making and the main issues and theoretical frameworks related to the topic. Task one (Informal business report) Students are required to choose a public listed company from a given list of familiar United Kingdom (UK) firms whose shares are traded on the London Stock Exchange's FTSE 100 index, download its most recent annual report(s) covering financial statements for the past five years, and from the data presented produce an informal report of approximately 3,000 words which includes a critical overall analysis of its financial performance over…arrow_forward
- Answer should be match in options. Many experts are giving incorrect answer they are using AI /Chatgpt that is generating wrong answer.arrow_forwardplease select correct option of option will not match please skip dont give wrong answe Answer should be match in options. Many experts are giving incorrect answer they are using AI /Chatgpt that is generating wrong answer. i will give unhelpful if answer will not match in option. dont use AI alsoarrow_forwardThe YTMs on benchmark one-year, two-year, and three-year annual pay bonds that are priced at par are listed in the table below. Bond Yield 1-year 2.39 2-year 3.11 3-year 3.52 What is the three-year spot rate for no-arbitrage pricing? Enter answer in percents.arrow_forward
- Answers for all the questionsarrow_forwardHello experts Answer should be match in options. Many experts are giving incorrect answer they are using AI /Chatgpt that is generating wrong answer. i will give unhelpful if answer will not match in option. dont use AI alsoarrow_forward3. Owen expects to receive $20,000 at the beginning of next year from a trust fund. If a bank loans money at an interest rate of 7.5%, how much money can he borrow from the bank based on this information? A. $12879.45 B. $12749.67 C. $15567.54 D. $174537.34arrow_forward
- TASK DESCRIPTION Children educatio Personali Cross- n ty cultural Spouse's willingne allowanc ss to travel Spouseoverseas job assistanc compete Prior ncies internati onal experienc Age Host country housing assistanc Income tax equalisati on policy Overseas health care plan Length of the foreign assignme Career nt and repatriati Receptivity to Internation al Careers Family status Gender Marital status Educatio n Destinati Opportun on on Company ities for country planning culture career support (Tarique et al., 2015) Tarique et al. (2015) developed the receptivity to international careers framework. Reflecting on generational differences in contemporary organisations, you are required to evaluate this model critically by addressing the following: 1. Identify the factors that are more important to Gen X, Gen Y, and Gen Z in their receptivity to international assignments. (1,500 words) 2. Critically discusses how factors such as culture, personality and skills/experience may impact…arrow_forwardListen Answer should be match in options. Many experts are giving incorrect answer they are using AI /Chatgpt that is generating wrong answer. i will give unhelpful if answer will not match in option. dont use AI alsoarrow_forwardPlease Answer should be match in options. Many experts are giving incorrect answer they are using AI /Chatgpt that is generating wrong answer. i will give unhelpful if answer will not match in option. dont use AI alsoarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education