This website uses cookies to ensure you have the best experience. Learn more

Financial Management: Ibm Essay

1955 words - 8 pages

1. Find an estimate of the risk-free rate of interest, krf. To obtain this value, go to Market Data [] and use the "U.S. 10-year Treasury" bond rate as the risk-free rate. In addition, you also need a value for the market risk premium. Use an assumed market risk premium of 7.5%.The Risk Free Rate of Interest known as KRF is 4.250% or 0.0425. This value wasobtained from The Assumed Market RiskPremium (Km) was previously given is the first question. Its assumed value waslisted as 7.5%.2. Download this IBM Stock Information document (.pdf file). ...view middle of the document...

5% meaningthat our beta was over one-half times more sensitive to market changes.Any stock with a beta of 1% is considered to be an average stock. Notoverly sensitive to the changes but is still affected by them. A stock with a beta ofless than 1% does not react heavily to market changesIf we calculate P from the information provided from the IBM Stock Information document (.pdf file) located at we would obtain a value for P of $76.28. The difference between the P and Po in problem 4 is P-Po= ($76.28)-($58.84057971) = $17.43942079 ($17.44). So Po or thetheoretical price is $17.43942079 ($17.44) less than the current IBM stock quote.However we all know that IBM's current stock quote has the potential to change throughout the day. The given range over the past 52 weeks is $71.85-99.10. Currently as of October 29, 2005 the opening price or P is at $82.32. This varies from the theoretical price Po which we calculated as $58.84057971 by P-Po= ($82.32)-($58.84057971) = 23.47942029 ($23.48).Depending on what web site you have visited and when, you will find a difference in the current stock quote for IBM. If we were to view the site provided for us for the duration of this assignment, we would find the current price to be $76.28, but, according to the IBM Investor Relations website, , which shows an update of 10-28-05 at 16:00 hours, the current price is $81.42. Amazingly enough, both of these numbers still fall into the 52 week range of $71.85-99.10 provided by the IBM pdf file.From the assignment we figured our PO= 58.84057971, the difference when looking at either of the two amounts listed could be contributed to a number of factors. Beta would be the first factor to consider. As a company becomes more diversified, the beta or measure of market risk will decrease because the company is also investing in other areas that help soften the blow of changes in market. When we first viewed our assignment, the beta was 1.64 according the IBM website, the beta was lowered a few points to 1.60.The P/E ratio also determines the price. The P/E ratio serves as an indicator of the stocks earning power in the future. As stated in our text, the more secure a company feels about their stock and its future, the higher the P/E.The EPS or Earnings Per Share also play a role in the current price. This figure show on the pdf file as $4.87and on the investor website as $5.09 takes into account and measures the actual gain or loss associated with each share. This is important when figuring cost because if there is a huge loss, the price of the share must increase to attempt and compensate for the loss. As the stock experiences gains, it is reflected as the price of the common stock drops.The variability can also be a cause. Variability in a security's returns resulting from fluctuations in the aggregate market is known as market risk. All securities are exposed to...

Other Essays On Financial Management: IBM

Financial System: Riordan Manufacturing Essay

3181 words - 13 pages Riordan has found the situation unbearable and has mandated a solution to be recommended. (University of Phoenix, 2006).Current situation regarding the Financial and Accounting SystemsSan Jose, which is the corporate headquarters, has a license for a fully integrated Windows based ERP manufacturing, distribution and financial management software application specifically designed for plastics processors and process and assembly manufacturers

What Is A A Brand ?

2319 words - 10 pages been under unrelenting attack from low-priced alternatives( ie: Compaq in PC system against IBM to Procter & Gamble in personal care products.) and also retailer's own label.(look alike products), the makers of megabrends have blinked.This is compound by the fact that brand in the 90's have been overvalued according to the accounting valuation. In April 2, 1993, when Philip Morris cut the price of Marlboro cigarettes by 40 cents a pack.. That

Issue Management Paper On Executive Compensation Pay

2862 words - 12 pages ISSUES MANAGEMENT PROJECTExecutive Compensation Pay IssueTable of Content Topic Page No 1. Abstract 3 2. Role of Human Resource Consultant 5 3. The Issue 7 4. Role of Government 11 5. Strategies that can be employed to implement fair reporting practice. 12 6. Conclusion 14 7. References and Citation 15 AbstractI feel that, today, the Human Resource Management has become even more important facet of

The Sogo Shosha

2891 words - 12 pages products they handle, the global spread of their business, the multiple types of their trade, and, equally important, in terms of the services they provide and the enormous resources they command for conducting and expanding their business' (Young, 1979, p.19). A few of the services offered by the sogo shosha are such as financial services, information services, risk reduction services, organizational and coordination services, human resources


3718 words - 15 pages also the world's number one retailer in sales. Indeed, Wal-Mart was named "Retailer of the Decade" by Discount Store News in 1989, and on several occasions has been included in Fortune's list of the "10 most admired corporations." Even with Walton's death (after a two-year battle with bone cancer) in 1992, Wal-Mart's sales continue to grow significantly.Wal-Mart is successful not only because it makes sound strategic management decisions, but also

GSK Parmaceuticals

7705 words - 31 pages ultimately accountable for the Group's activities, strategy and financial performance.Audit CommitteeThe Audit Committee reviews the financial and internal reporting process, the system of internal control and management of risks and the external and internal audit process. The Committee also proposes to shareholders the appointment of the external auditors and is directly responsible for their remuneration and oversight of their work. The Committee

Business Development - Business Plan Of ISP Company

5286 words - 22 pages management is highly experienced and qualified. Key members of its management teams are listed below.Jiří Suchánek - CEO and founderRoman Čadeni - CTORoman Stuchlík - CBOMichaela Čermáková - Marketing OfficerFigure No.2 - Organization chart8. FinancialsThis section presents our financial projections for the term of the plan.The sales forecast chart and table are presented below. Final sales forecasts are

Strategic Management Report For TC Company

7137 words - 29 pages Strategic Management Report for TC CompanyExecutive SummaryThis is a strategic management report, aiming to help develop strategies and provide recommendations to TC that is one of the largest online gaming companies in China by collecting information relating to various components of strategic management and presenting an analysis.This report firstly provides an overview of TC, including number of employees, assets, sales, performance, products

Business Ethics

7763 words - 32 pages the company. 2"Actions which are deemed to be in violations of law may lead to prosecution, civil liability and/or disciplinary action up to and including dismissal." No one will be permitted to justify an illegal act by claiming it was ordered by a supervisor or officer in the company. Nor may a supervisor or other employees avoid accountability by ignoring a violation. Individuals in management positions have a responsibility to demonstrate

Operating Business In China

8213 words - 33 pages application.Wang An, vice president of Nokia (China) company said that the cooperation will be conducive to the further development, thus helping the Nokia to lead the broadband business in China.Person in charge of the financial department in said that with China's pending for the accession to WTO, he believes that China's broadband market will be more promising, and the cooperation will help create a "win-win" deal for the two parties.3. Is

Character In "The Yellow Wallpaper" By Charlotte Perkins Gilman

1587 words - 7 pages The short story 'The Yellow Wall-Paper' written by Charlotte Perkins Gilman is a cry for freedom. This story is about a woman who fights for her right to express what she feels, and fights for her right to do what she wants to do. The narrator in this short story is a woman whose husband loves her very much, but oppresses her to the point where she cannot take it anymore. This story revolves around the main character, her oppressed life, and her

Similar Papers

Untitled Essay

6660 words - 27 pages non-IBM platforms: HP-UX clients and servers for Hewlett Packard's UNIX environment; Solaris Operating Environment clients for Sun systems. Additional ports of DB2 for AIX/6000 code are planned.Version enhancements to DB2 provide a better platform than ever before for application development and data management in an open client/server environment.DB2's functional enhancements conform to Open Blueprint and move closer to the ANSI/ISO 1992 SQL

Jp Morgan Chase Shifts It Outsourcing Into Reverse

5453 words - 22 pages financial service firms in the United States. Competes both globally and regionally. Operates in over 50 countries worldwide. Ability to meet the objectives and needs of clients. Superior reputation, their ability to attract and retain its personnel and the appeal of their products to their consumers. $5bn Outsourcing agreement with IBM. JP Morgan Chase's IT infrastructure was not sufficient in maintaining their systems in their business

Databases Used By The Department Of Correction And Rehabilitations

956 words - 4 pages databases are custom built to suit the needs of CDCR. Access is a powerful database program that will also query SQL databases if set up correctly.There are many server-based database programs that are available some of these include, IBM, Informix, Microsoft, Oracle, and Sybase. These manufactures make some of the most popular server bases databases. Unlike their desktop cousins, server-based databases can handle just about any data management

Goals Planning Essay

5604 words - 23 pages ' needs and rebalances the portfolio from time to time in view of changing market conditions requires extensive problem solving and decision making skills. Communications and relationship management skills help to foster long lasting relationships with clients. Having initiative and a good global mindset can be a competitive advantage to managing clients' fund. (Workforce Development Agency 2008)Using framework from the Financial Industry Competency