CORPORATE FINANCE

Corporate Finance

Table of Content

PART A1

Equity Valuation2

Significance2

Function2

Features3

Benefits3

Considerations3

Equity Valuation Model3

PART B5

BP5

Note on the Models used to create the reports:6

The Stock Valuation Model6

The Stock Forecast Model6

The Portfolio Forecast Model6

The Portfolio Advisor Model7

SWOT Analysis7

Strengths7

Weaknesses7

Opportunities8

Threats8

PORTER FIVE FORCES8

RIVALRY9

BUYER POWER9

SUPPLIER POWER9

BARRIERS TO ENTRY / THREAT OF ENTRY10

PRIVATE OWNED SECTOR- BP10

Discussion10

Balance sheet valuation methods10

Dividend Discount Models11

Constant growth Dividend Discount Model (DDM)11

Convergence of Price to Intrinsic value12

Stock Prices and Investment Opportunities13

Life Cycles and Multistage growth Models13

PART C15

ARTICLE REFERENCES20

REFERENCES21

PART A

Economic Approach Accounting Model

The accounting model assumes that over relevant ranges of output that is in the short run, both price levels (wage rates and material prices) and efficiency levels are constant and that fixed costs will remain unchanged.

However, the economic model assumes that over wide ranges of output, price and efficiency levels will change first because of economies and then because of diseconomies (law of diminishing returns) arising as output increases. Curvilinear cost functions must be plotted graphically.

A cost object is any unit or activity for which management wants to accumulate and measure a cost. The unit or activity may be a product or service unit; a batch of like units; or a contract, project, process, function, goal, department, business segment, or other sub division of a company. The idea of a cost object is central to cost accounting. A cost object is always present when accumulation, measurement, allocation, or reporting of costs occurs. The concept of a cost object is woven throughout this course. Cost accounting often involves the calculation of the cost of something - that something is a cost object.

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Actuarial risks

Actuarial risks include such things as casualty, liability, morbidity, and mortality risks. These risks are the insurance British petroleum's bread and butter. Exposure to these risks is managed through diversification and by writing large numbers of similar policies. Be- cause an insurance British petroleum can reduce actuarial risks to an arbitrarily small level through risk pooling and diversification, we need not account for them, beyond their expected costs, in valuing liabilities. Any residual exposure can be addressed in the process of de- termining surplus requirements. Our approach differs from most traditional actuarial reserving methods in that they typically adjust for actuarial risk (and sometimes even for indirect expenses) by reducing the discount rates to reflect a risk charge. By entangling the actuarial risk charge with the reserves, the procedure produces conservative estimates of reserves. In essence, re- serves so stated are a measure of liabilities together with a portion of the economic surplus deemed necessary to maintain solvency. In contrast to the traditional approach, we sug- gest separating the value of liabilities from any element of economic ...