Lewin’s Change Model

/in /by

One of the seminal studies and theories related to change management is Kurt Lewin’s Change Management Model. Components of his work are identified in many other theories, so understanding this theory offers insight into the change management process.

In this assignment, provide a brief overview of Lewin’s Change Management Model, including his rationale for creating this theory and the intended role this model would address in change management. Then discuss the three stages of change implementation and explain the importance of each stage. Be sure to use the terminology for each stage of Lewin’s model as outlined in the text.

Finally, Lewin’s theory was created in the 1940s. How would you modify/alter his theory to ensure that it remains relevant and applicable within KSA? Discuss any changes to be made to his theory to reflect today’s business environment, both globally and within KSA.

Your well-written paper should meet the following requirements:

  • Be 3-5 pages in length, which does not include the title page, abstract or required reference page, which are never a part of the content minimum requirements.
  • Use academic writing standards and APA style guidelines.
  • Support your submission with course material concepts, principles and theories from the textbook and at least three scholarly, peer-reviewed journal articles.
 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Common Stock Valuation

/in /by

CHAPTER 9 Common Stock Valuation

Timothy R. Mayes, Ph.D. Metropolitan State University of Denver

 

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

What Is Value?

The term “value” has many different meanings depending on the context in which it is used

For our purposes, there are four important types of value:

Most generally, value can be defined as the amount that a willing and able buyer agrees to pay for an asset to a willing and able seller

Book value is the original purchase price of an asset less its accumulated depreciation

Intrinsic value is the value of an asset to a particular investor as determined by calculating the present value of the expected future cash flows at that investor’s required rate of return

Market value is the price of an asset as determined in a competitive marketplace

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Fundamentals of Valuation

As noted earlier, the intrinsic value of an asset is the present value of the expected future cash flows provided by the asset

To determine the value of a security, then, we must first determine three things:

What are the expected future cash flows?

When will the cash flows occur?

What is the required rate of return for this particular stream of cash flows?

The value of the asset can be compared to its market price to determine whether the asset should be purchased, or not

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Determining the Required Rate of Return

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Valuing Common Stocks

There are many possible formulas that can be used to value common stocks, but most of them are simply present value models

The difference between them is in the pattern of future cash flows that they assume, or the particular cash flow that they use (e.g., dividends or free cash flow)

We will look at several discounted cash flow models:

The Constant-Growth Dividend Discount Model

The Two-Stage Growth Model

Three-Stage Growth Models

The Earnings Model

The Free Cash Flow Model

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Constant-Growth Dividend Discount Model

Note that since the growth rate is constant, if we know the most recent dividend then we know all future dividends

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Two-Stage Growth Model

Many companies can’t be expected to grow at a constant rate forever

Some of these may be currently growing at a unsustainably high rate now, but can be expected at some point to see their growth slow to a long-run constant rate

The two-stage dividend discount model allows for these two stages of growth:

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Three-Stage Growth Models

There are several models that allow for three stages of dividend growth:

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Alternative Discounted Cash Flow Models

The Free Cash Flow Model discounts the expected future free cash flows to get the value of the firm, and then subtracts the value of debt and preferred equity to arrive at the market value of equity (here we are assuming a constant growth rate):

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Earnings Model Example

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Relative Value Models

Relative value models provide a way to value a stock relative to other similar stocks using valuation ratios such as the Price to Earnings (P/E) ratio

These models have two major advantages:

They are easy to use

They can be used to value stocks for which the DCF models fail

The most common relative value model is based on the P/E ratio

The idea is to identify a “justified” P/E ratio and to multiply that by expected earnings per share

If earnings are negative, we could use the price to book or price to sales ratios

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Preferred Stock Valuation

Preferred stock is a kind of hybrid security

It represents an ownership claim on the firm’s assets, like common stock

Holders of preferred stock do not benefit from increases in the firm’s earnings and they generally cannot vote in corporate elections, like bonds

Further, like a bond, preferred stock generally pays a fixed dividend payment each period

There is no maturity date, so the life of a share is effectively infinite

Since preferred stock is expected to pay a constant dividend forever, we can simply find the present value of an infinite stream of constant cash flows:

Which is refreshingly simple given some of the previous formulas

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Excel Formulas

FAME_TwoStageValue

FAME_ThreeStepValue

FAME_ThreeStageValue

FAME_HModelValue

 

© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

(

)

1

1

N

t

t

t

CF

V

i

=

=

+

ĂĄ

(

)

(

)

(

)

00

1

1

11

1

t

N

CS

t

t

CSCS

CS

DgDg

D

V

KgKg

K

=

++

===

—

+

ĂĄ

(

)

(

)

(

)

(

)

012

01

2

1

1

11

1

1

1

1

1

n

n

CS

CS

n

CSCS

CS

Dgg

Dg

Kg

g

V

KgK

K

++

Ă©Ăą

+

æö

–

+

ĂŞĂş

=-+

ç÷

-+

èø

+

ĂŞĂş

Ă«Ă»

1

1

1

CS

CS

CSCS

r

RE

K

EPS

V

KKg

æö

–

ç÷

èø

=+

–

(

)

1

Nonoperating Assets

DebtPreferrd

Number of Shares

F

F

CS

FCF

VV

WACCg

VVV

V

=+

–

—

=

Price per Share

Earnings per Share

P

E

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Database Prototyping Assignment

/in /by

Database Prototyping Assignment

Case Studies

Corporate Finance
Ross, Westerfield, Jaffe, and Jordan
12th edition
Chapters 8-11 & 13 Case Studies
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green
NOTE: Some functions used in these spreadsheets may require that
the “Analysis ToolPak” or “Solver Add-in” be installed in Excel.
To install these, click on “Tools|Add-Ins” and select “Analysis ToolPak”
and “Solver Add-In.”

Chapter 8

Chapter 8
Financing East Coast Yachts Expansion Plans with a Bond Issue
Input area:
Years to maturity 20
Required return 7.50%
Amount needed $ 50,000,000
Face value $ 1,000
Coupon rate 7.50%
Tax rate 21%
Year bond is called 7
Spread above Treasury 0.40%
Treasury rate at call 4.80%
Treasury rate at call 8.20%
Output area:
2) Price of coupon bond
# of coupon bonds needed
Price of zero coupon bond
# of zeroes needed
3) Repayment of coupon bonds
Repayment of zeroes
4) Year 1 interest payments:
Pretax coupon payment
Aftertax coupon payment
Value of zero in one year
Zero coupon growth
Zero coupon bond
5) Make whole price
Make whole price

Chapter 9

Chapter 9
Stock Valuation at Ragan Engines
Input area:
Shares owned by each sibling 150,000
Ragan EPS $ 5.35
Dividend to each sibling $ 320,000
Ragan ROE 21%
Ragan required return 18%
EPS DPS Stock price ROE R
Blue Ribband Motors Corp. $ 1.19 $ 0.19 $ 16.32 10.00% 12.00%
Bon Voyage Marine, Inc. 1.26 0.55 13.94 12.00% 17.00%
Nautilus Marine Engines (0.27) 0.57 23.97 N/A 16.00%
Industry average
Nautilus EPS w/o write-off $ 2.07
Output area:
1) Total earnings
Payout ratio
Retention ratio
Growth rate
Total dividends next year
Total equity value
Value per share
2) Industry EPS
Industry payout ratio
Industry retention ratio
Industry growth rate
Year Total dividends
1
2
3
4
5
6
Stock value in Year 5
Total stock value today
Value per share
3) Industry PE
Ragan PE (original assumption)
Ragan PE (revised assumption)
Stock price implied by
industry PE
4) Total earnings
Cash cow value
Percentage not attributable to
growth opportunities
Percentage attributable to
growth opportunities
5) ROE

Chapter 10

Chapter 10
A Job at East Coast Yachts
Input area:
10-year annual return Standard deviation
Bledsoe S&P 500 Index Fund 11.04% 18.45%
Bledsoe Small-Cap Fund 16.14% 29.18%
Bledsoe Large Company Stock Fund 12.15% 24.43%
Bledsoe Bond Fund 6.93% 9.96%
Risk-free rate 3.20%
Company stock expected return 16.00%
Company stock standard deviation 58.00%
Output area:
Bledsoe S&P 500 Index Fund
Bledsoe Small-Cap Fund
Bledsoe Large Company Stock Fund
Bledsoe Bond Fund
Company stock

Chapter 11

Chapter 11
A Job at East Coast Yachts, Part 2
Input area:
10-year annual return Standard deviation
Bledsoe Large Company Stock Fund
Bledsoe Bond Fund
Risk-free rate
Correlation 0.15
Output area:
Weight of stock fund Portfolio E(R) Portfolio standard deviation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dominant portfolio:
Weight of stock fund
Weight of bond fund
Standard deviation
Expected return
Minumum variance portfolio:
Weight of large cap stock fund
Weight of bond fund
Expected return
Variance
Standard deviation
Sharpe optimal portfolio: (Using Solver)
Weight of large cap stock fund
Sharpe ratio
Weight of large cap stock fund
Weight of bond fund
Expected return
Standard deviation
Sharpe ratio

Chapter 13

Chapter 13
The Cost of Capital for Swan Motors
Input area:
Bond maturity Book value Price YTM
3/1/19 $ 920,000,000 94.347 2.028%
3/1/21 $ 1,380,000,000 92.625 2.754%
BV of debt $ 2,300,000,000
BV of equity per share $ 10.190
Stock price $ 232.36
Shares outstanding 129,800,000
Beta 1.400
3-month Treasury bill rate 0.06%
Market risk premium 7.00%
Tax rate 21%
Output area:
2) RE from CAPM
3) Company Beta
Ford 0.97
General Motors 1.44
Honda 0.74
Toyota 0.54
Fiat Chrysler 0.49
Volkswagen 1.97
Daimler Chrysler 1.55
Industry Average
RE with industry beta
4) Book value Percent of total Quoted price Market value Percent of total Yield to Maturity Book values Market values
3/1/19
3/1/21
Totals
5) Book value of debt
Book value of equity
Book value of company
Market value of equity
Market value of company
WACC using book value
WACC using market value
 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

BUSINESS DISCUSSION 2

/in /by

INSTRUCTIONS DISCUSSION 2

After reading the chapters in this module, review the following three (3) topics below. Choose and post your response to one (1) topic. Then review and reply to a classmate who posted on a different topic. For example, if you posted a reply to topic #1, review and reply to a classmate who posted on topic #2 or #3.

l

#1 Chapter 3 Distinguishing Between an Infatuation and a Good Opportunity Many people become excited about an idea to start a business, but it is not necessarily a good investment opportunity. Explain a business idea you have from the perspective of its ability to be a profitable company.
#2 Chapter 4 What to Ask

You have decided to purchase a franchise and have set up a meeting with the franchisor. Discuss the kinds of questions you would ask them and, also, what kinds of questions you anticipate the franchisor would ask.
#3 Chapter 5 Outside Manager/Reluctant Family  You are getting older and must consider how your business will be run. You have had a tremendous manager working with you for the last 30 years, and a son who has a degree but is not interested in the business. Discuss the implications of this situation and some possible solutions to maintain the legacy of the business

l

In order to earn the full points for this assignment, you must:

· Begin your post with the Chapter # and topic

· Clearly and accurately explain your answer based on factual information. (25 points)

· Include examples, illustrations and/or applications in your answer. If you copy information from the Internet, you must cite your source. (25 points)

· Respond to one of your classmate’s post on one of the OTHER topics. (25 points)

· Explain the reason for your agreement or disagreement or why you think the post is important, and/or provide examples of the point(s) made. Just replying “I agree with you” does not constitute a valid reply. (25 points)

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"