UOL Corporate Finance Tuition, UOL Financial Management Tuition in Singapore

SMS/ Whataspp 9758-7925 (whatsapp/ SMS) or email enquiry@starcresto.com for UOL Principles of Banking and Finance, UOL Corporate Finance tuition or UOL Financial Management tuition. 

Background

LSE (UOL) Finance Modules have a very high failure rate due to complexity of the module. Many faced problems trying to grasp the concept and calculations. As such, we devised our own teaching methodology specially for UOL students taking UOL Principles of Banking and Finance, UOL Corporate Finance tuition or UOL Financial Management. The notes, along with the guided help from our tuition have helped many passed with flying colours.

With a total of 12 years experience in teaching and tutoring, the tutor trainer has trained a group of tutors who coach students and working adults. Only tutors who have review score of more than 4 out of 5 are retained to ensure quality of starCresto Tutors. We currently have ex NIE trained teachers, ex lecturers and many other qualified finance professionals under our wings.

We offer both one-to-one and group tuition. For group tuition, the optimal number of students per class is between 4 to 6. Please form your own group because this will facilitate our teaching methodology.

Teaching Methodology: 

1. Understanding concepts and application of concept to questions 

2. Developing graphing skills 

3. Identifying exam trends and skills (Questions spotting) 

4. Practicing variety of questions to prepare you for your exam 

5. Simplifying difficult concepts 

6. Identifying and improving your weakness 

Do contact me at 9758-7925 (whatsapp/ SMS) or email enquiry@stacresto.com for tuition. 

Tutors' Profile:  

> Degree -- at least second upper class honours 

> Post Graduate -- At least Completion of Certified Financial Analyst (CFA)

> Review -- at least 4 out of 5

Tutors’ Trainer's Profile: 

> Name -- Valerie Chai Hui Yee

> O Level -- 8 Distinctions for O'Level

> Diploma -- Singapore Polytechnic: Merit Diploma, Honours Roll, SIM Award, Singapore Polytechnic and School of Business Scholar

> Degree -- Nanyang Business School: First Class Honours, Dean List, C.H. Wee Gold Medal, Sumitomo Banking Corporation Scholar

> Post Graduate -- Completed CFA L1

> Experience -- 12 years as tutor

> Status -- Full time tutor / trainer

UOL Modules that are taught by Us:

1. UOL Introduction to Economics2. UOL Macro Economics
3. UOL Micro Economics
4. UOL Elements of Econometrics
5. UOL Managerial Economics
6. UOL Principles of Banking & Finance
7. UOL Corporate Finance
8. UOL Financial Management
9. UOL Value Security Analysis
10. UOL Investment Management
11. UOL Principles of Accounts
12. UOL Audit
13. UOL Management Accounting
14. UOL Statistics 1
15. UOL Statistics 2
16. UOL Maths 1
17. UOL Maths 2

For more information, you can visit 

1. UOL Tuition: www.uoltuition.com

2. About Us: www.starcresto.com / www.tertiarytuition.com

UOL Corporate Finance Tuition - SMS 9758-7925 for enquiries today

SMS 9758-7925 or email enquiry@starcresto.com for UOL Principles of Banking and Finance, UOL Corporate Finance tuition or UOL Financial Management tuition. 

Background

LSE (UOL) Finance Modules have a very high failure rate due to complexity of the module. Many faced problems trying to grasp the concept and calculations. As such, we devised our own teaching methodology specially for UOL students taking UOL Principles of Banking and Finance, UOL Corporate Finance tuition or UOL Financial Management. The notes, along with the guided help from our tuition have helped many passed with flying colours.

With a total of 12 years experience in teaching and tutoring, the tutor trainer has trained a group of tutors who coach students and working adults. Only tutors who have review score of more than 4 out of 5 are retained to ensure quality of starCresto Tutors. We currently have ex NIE trained teachers, ex lecturers and many other qualified finance professionals under our wings.

We offer both one-to-one and group tuition. For group tuition, the optimal number of students per class is between 4 to 6. Please form your own group because this will facilitate our teaching methodology.

Teaching Methodology: 

1. Understanding concepts and application of concept to questions 

2. Developing graphing skills 

3. Identifying exam trends and skills (Questions spotting) 

4. Practicing variety of questions to prepare you for your exam 

5. Simplifying difficult concepts 6. Identifying and improving your weakness

Do contact me at 9758-7925 or email enquiry@stacresto.com for tuition. 

Tutors' Profile:  

> Degree -- at least second upper class honours 

> Post Graduate -- At least Completion of Certified Financial Analyst (CFA)

> Review -- at least 4 out of 5

Tutors’ Trainer's Profile: 

> Name -- Valerie Chai Hui Yee

> O Level -- 8 Distinctions for O'Level

> Diploma -- Singapore Polytechnic: Merit Diploma, Honours Roll, SIM Award, Singapore Polytechnic and School of Business Scholar

> Degree -- Nanyang Business School: First Class Honours, Dean List, C.H. Wee Gold Medal, Sumitomo Banking Corporation Scholar

> Post Graduate -- Completed Certified Financial Analyst

> Experience -- 12 years as tutor, 5 years as Corporate Trainer

> Status -- Full time tutor / trainer

UOL Modules that are taught by Us:

1. UOL Introduction to Economics

2. UOL Macro Economics

3. UOL Micro Economics

4. UOL Elements of Econometrics

5. UOL Managerial Economics

6. UOL Principles of Banking & Finance

7. UOL Corporate Finance

8. UOL Financial Management

9. UOL Value Security Analysis

10. UOL Investment Management

11. UOL Principles of Accounts

12. UOL Audit

13. UOL Management Accounting

14. UOL Statistics 1

15. UOL Statistics 2

16. UOL Maths 1

17. UOL Maths 2

For more information, you can visit 

1. UOL Tuition: www.uoltuition.com

2. About Us: www.starcresto.com

Clarify All Your Business Finance Doubts - with starCresto

SMS 9758-7925 or email enquiry@starcresto.com for UOL Principles of Banking and Finance, UOL Corporate Finance tuition or UOL Financial Management tuition. 

Background

LSE (UOL) Finance Modules have a very high failure rate due to complexity of the module. Many faced problems trying to grasp the concept and calculations. As such, we devised our own teaching methodology specially for UOL students taking UOL Principles of Banking and Finance, UOL Corporate Finance tuition or UOL Financial Management. The notes, along with the guided help from our tuition have helped many passed with flying colours.

With a total of 12 years experience in teaching and tutoring, the tutor trainer has trained a group of tutors who coach students and working adults. Only tutors who have review score of more than 4 out of 5 are retained to ensure quality of starCresto Tutors. We currently have ex NIE trained teachers, ex lecturers and many other qualified finance professionals under our wings.

We offer both one-to-one and group tuition. For group tuition, the optimal number of students per class is between 4 to 6. Please form your own group because this will facilitate our teaching methodology.

Teaching Methodology: 

1. Understanding concepts and application of concept to questions 

2. Developing graphing skills 

3. Identifying exam trends and skills (Questions spotting) 

4. Practicing variety of questions to prepare you for your exam 

5. Simplifying difficult concepts 

6. Identifying and improving your weakness 

Do contact me at 9758-7925 or email enquiry@stacresto.com for tuition. 

Tutors' Profile:  

> Degree -- at least second upper class honours 

> Post Graduate -- At least Completion of Certified Financial Analyst (CFA)

> Review -- at least 4 out of 5

Tutors’ Trainer's Profile: 

> Name -- Valerie Chai Hui Yee

> O Level -- 8 Distinctions for O'Level

> Diploma -- Singapore Polytechnic: Merit Diploma, Honours Roll, SIM Award, Singapore Polytechnic and School of Business Scholar

> Degree -- Nanyang Business School: First Class Honours, Dean List, C.H. Wee Gold Medal, Sumitomo Banking Corporation Scholar

> Post Graduate -- Completed Certified Financial Analyst

> Experience -- 12 years as tutor, 5 years as Corporate Trainer

> Status -- Full time tutor / trainer

UOL Modules that are taught by Us:

1. UOL Introduction to Economics

2. UOL Macro Economics

3. UOL Micro Economics

4. UOL Elements of Econometrics

5. UOL Managerial Economics

6. UOL Principles of Banking & Finance

7. UOL Corporate Finance

8. UOL Financial Management

9. UOL Value Security Analysis

10. UOL Investment Management

11. UOL Principles of Accounts

12. UOL Audit

13. UOL Management Accounting

14. UOL Statistics 1

15. UOL Statistics 2

16. UOL Maths 1

17. UOL Maths 2

For more information, you can visit 

1. UOL Tuition: www.uoltuition.com

2. About Us: www.starcresto.com

Recipe to Success in Business Finance - by UOL Tuition

Struggling with Finance? UOL Tuition is here to lend a helping hand, from the basics to the more advanced nuances of Corporate Finance. Simply SMS Val @ 9758-7925 or email enquiry@starcresto.com for UOL Principles of Banking and Finance and/or UOL Financial Management Tuition.

Background

Led by an experienced tutor trainer who graduated with first class honors and a gold medal, UOL Tuition has devised a unique teaching methodology to help all UOL students. The notes, along with the guided help from our tutors, have helped many pass with flying colours.

With a total of 12 years experience in teaching and tutoring, the tutor trainer has trained a group of tutors who now coach students and working adults all over Singapore. Only tutors who have scored 4 out of 5 stars or more are retained to ensure quality of starCresto Tutors. We currently have ex NIE trained teachers, ex lecturers and many other qualified professionals under our wing.

We offer both one-to-one and group tuition. For group tuition, the optimal number of students per class is between 4 to 6. Please form your own group because this will facilitate our teaching methodology.

Teaching Methodology: 

1. Understanding concepts and application of concept to questions
2. Developing graphing skills
3. Identifying exam trends and skills (Questions spotting)
4. Practicing variety of questions to prepare you for your exam
5. Simplifying difficult concepts
6. Identifying and improving your weakness
Do contact me at 9758-7925 or email enquiry@starcresto.com for tuition. 

Student's Profile:

> Tertiary Student --
**Poly / JC (NYP, RP, SP, TP, NP, MDIS, Informatics, SIM, SAS, ACSI)
**University (NTU, NUS, SMU, Imperial College, London School of Economics, University of Durham, Uni SIM, UOL, RMIT, SAS, MDIS, University of Southern Australia, James Cook University, University of Newcastle, London School of Economics, Manchester Business School, University of Nottingham, Melbourne Business School)
**Master (Insead, Singapore Management University, NTU, UCLA, UC Berkeley, Manchester, Uni of Southern Australia, Uni of Buffalo, Uni of Adelaide, NUS, University of State of New York)
> Working Adults -- Managers, Deputy Directors, Managing Directors, Doctors, Divisional Directors, Auditors, Analyst, Credit Advisor, AVP

Tutors’ Trainer’s Profile

> Name -- Valerie Chai Hui Yee
> O Level -- 8 Distinctions for O'Level
> Diploma -- Singapore Polytechnic: Merit Diploma, Honours Roll, SIM Award, Singapore Polytechnic and School of Business Scholar
> Degree -- Nanyang Business School: First Class Honours, Dean List, C.H. Wee Gold Medal, Sumitomo Banking Corporation Scholar
> Post Graduate -- Completed Certified Financial Analyst
> Experience -- 12 years as tutor, 5 years as Corporate Trainer
> Status -- Full time tutor / trainer

UOL Modules that are taught by Us:

1. UOL Introduction to Economics
2. UOL Macro Economics
3. UOL Micro Economics
4. UOL Elements of Econometrics
5. UOL Managerial Economics

6. UOL Principles of Banking & Finance
7. UOL Corporate Finance
8. UOL Financial Management
9. UOL Value Security Analysis
10. UOL Investment Management

11. UOL Principles of Accounts
12. UOL Audit
13. UOL Management Accounting

14. UOL Statistics 1
15. UOL Statistics 2
16. UOL Maths 1
17. UOL Maths 2

For more information, you can visit 

1. UOL Tuition: www.uoltuition.com

2. About Us: www.starcresto.com

UOL Corporate Finance Tutors in Singapore

SMS 9758-7925 or email enquiry@starcresto.com for UOL Principles of Banking and Finance, UOL Corporate Finance tuition or UOL Financial Management tuition. 

Background

LSE (UOL) Finance Modules have a very high failure rate due to complexity of the module. Many faced problems trying to grasp the concept and calculations. As such, we devised our own teaching methodology specially for UOL students taking UOL Principles of Banking and Finance, UOL Corporate Finance tuition or UOL Financial Management. The notes, along with the guided help from our tuition have helped many passed with flying colours.

With a total of 12 years experience in teaching and tutoring, the tutor trainer has trained a group of tutors who coach students and working adults. Only tutors who have review score of more than 4 out of 5 are retained to ensure quality of starCresto Tutors. We currently have ex NIE trained teachers, ex lecturers and many other qualified finance professionals under our wings.

We offer both one-to-one and group tuition. For group tuition, the optimal number of students per class is between 4 to 6. Please form your own group because this will facilitate our teaching methodology.

Teaching Methodology: 

1. Understanding concepts and application of concept to questions 

2. Developing graphing skills 

3. Identifying exam trends and skills (Questions spotting) 

4. Practicing variety of questions to prepare you for your exam 

5. Simplifying difficult concepts 

6. Identifying and improving your weakness 

Do contact me at 9758-7925 or email enquiry@stacresto.com for tuition. 

Tutors' Profile:  

> Degree -- at least second upper class honours 

> Post Graduate -- At least Completion of Certified Financial Analyst (CFA)

> Review -- at least 4 out of 5

Tutors’ Trainer's Profile: 

> Name -- Valerie Chai Hui Yee

> O Level -- 8 Distinctions for O'Level

> Diploma -- Singapore Polytechnic: Merit Diploma, Honours Roll, SIM Award, Singapore Polytechnic and School of Business Scholar

> Degree -- Nanyang Business School: First Class Honours, Dean List, C.H. Wee Gold Medal, Sumitomo Banking Corporation Scholar

> Post Graduate -- Completed Certified Financial Analyst

> Experience -- 12 years as tutor, 5 years as Corporate Trainer

> Status -- Full time tutor / trainer

UOL Modules that are taught by Us:

1. UOL Introduction to Economics

2. UOL Macro Economics

3. UOL Micro Economics

4. UOL Elements of Econometrics

5. UOL Managerial Economics

6. UOL Principles of Banking & Finance

7. UOL Corporate Finance

8. UOL Financial Management

9. UOL Value Security Analysis

10. UOL Investment Management

11. UOL Principles of Accounts

12. UOL Audit

13. UOL Management Accounting

14. UOL Statistics 1

15. UOL Statistics 2

16. UOL Maths 1

17. UOL Maths 2

For more information, you can visit 

1. UOL Tuition: www.uoltuition.com

2. About Us: www.starcresto.com

Corporate Finance, Financial Management tuition in Singapore by First Class Honours Graduate Tutor

SMS Val @ 9758-7925 or email enquiry@starcresto.com for corporate finance tuition. 

Background
LSE (UOL) Modules have a very high failure rate due to complexity of the module. Many faced problems trying to grasp the concept and calculations. As such, we devised our own teaching methodology specially for UOL students. The notes, along with the guided help from our tuition have helped many passed with flying colours.

I have 10 years of teaching experience and I specialized in UOL modules. I provide extra exercises when deemed fit, detailed explanations and tutorials for my students. 

I offer both one-to-one and group tuition. For group tuition, the optimal number of students per class is between 4 to 6. Please form your own group because this will facilitate my teaching methodology. 

Teaching Methodology: 

1. Understanding concepts and application of concept to questions 
2. Developing graphing skills 
3. Identifying exam trends and skills (Questions spotting) 
4. Practicing variety of questions to prepare you for your exam 
5. Simplifying difficult concepts 
6. Identifying and improving your weakness 
Do contact me at 9758-7925 or email tutor@tertiarytuition.com for tuition. 

Student's Profile: 

> Tertiary Student --
**Poly / JC (NYP, RP, SP, TP, NP, MDIS, Informatics, SIM, SAS, ACSI)
**University (NTU, NUS, SMU, Imperial College, London School of Economics, University of Durham, Uni SIM, UOL, RMIT, SAS, MDIS, University of Southern Australia, James Cook University, University of Newcastle, London School of Economics, Manchester Business School, University of Nottingham, Melbourne Business School)
**Master (Insead, Singapore Management University, NTU, UCLA, UC Berkeley, Manchester, Uni of Southern Australia, Uni of Buffalo, Uni of Adelaide, NUS, University of State of New York)
> Working Adults -- Managers, Deputy Directors, Managing Directors, Doctors, Divisional Directors, Auditors, Analyst, Credit Advisor, AVP

Tutor's Profile: 
> Name -- Valerie Chai Hui Yee 
> O Level -- 8 Distinctions for O'Level 
> Diploma -- Singapore Polytechnic: Merit Diploma, Honours Roll, SIM Award, Singapore Polytechnic and School of Business Scholar 
> Degree -- Nanyang Business School: First Class Honours, Dean List, C.H. Wee Gold Medal, Sumitomo Banking Corporation Scholar 
> Post Graduate -- Certified Financial Analyst: CFA L1 
> Experience -- 11 years as tutor, 4 years as Corporate Trainer 
> Status -- Full time trainer 


UOL Modules that are taught by Us:

1. Introduction to Economics
2. Principles of Banking & Finance
3. Corporate Finance
4. Financial Management
5. Principles of Accounts
6. Statistics 1
7. Statistics 2
8. Maths 1
9. Maths 2
10. Elements of Econometrics

For more information, you can visit 
1. Tutor's trainer profile: www.tertiarytuition.com
2. UOL Tuition: www.uoltuition.com
3. e Tuition Agency: www.findtuitionteachers.com
4. About Us: www.starcresto.com

UOL Corporate Finance Tuition in Singapore. SMS 9758-7925 for Finance Tutor

Having problems with understanding your Corporate Finance? etc? SMS Val @ 9758-7925 or email enquiry@starcresto.com for tuition. 

Background
LSE (UOL) Modules have a very high failure rate due to complexity of the module. Many faced problems trying to grasp the concept and calculations. As such, we devised our own teaching methodology specially for UOL students. The notes, along with the guided help from our tuition have helped many passed with flying colours.

I have 10 years of teaching experience and I specialized in UOL modules. I provide extra exercises when deemed fit, detailed explanations and tutorials for my students. 

I offer both one-to-one and group tuition. For group tuition, the optimal number of students per class is between 4 to 6. Please form your own group because this will facilitate my teaching methodology. 

Teaching Methodology: 

1. Understanding concepts and application of concept to questions 
2. Developing graphing skills 
3. Identifying exam trends and skills (Questions spotting) 
4. Practicing variety of questions to prepare you for your exam 
5. Simplifying difficult concepts 
6. Identifying and improving your weakness 
Do contact me at 9758-7925 or email tutor@tertiarytuition.com for tuition. 

Student's Profile: 

> Tertiary Student --
**Poly / JC (NYP, RP, SP, TP, NP, MDIS, Informatics, SIM, SAS, ACSI)
**University (NTU, NUS, SMU, Imperial College, London School of Economics, University of Durham, Uni SIM, UOL, RMIT, SAS, MDIS, University of Southern Australia, James Cook University, University of Newcastle, London School of Economics, Manchester Business School, University of Nottingham, Melbourne Business School)
**Master (Insead, Singapore Management University, NTU, UCLA, UC Berkeley, Manchester, Uni of Southern Australia, Uni of Buffalo, Uni of Adelaide, NUS, University of State of New York)
> Working Adults -- Managers, Deputy Directors, Managing Directors, Doctors, Divisional Directors, Auditors, Analyst, Credit Advisor, AVP

Tutor's Profile: 
> Name -- Valerie Chai Hui Yee 
> O Level -- 8 Distinctions for O'Level 
> Diploma -- Singapore Polytechnic: Merit Diploma, Honours Roll, SIM Award, Singapore Polytechnic and School of Business Scholar 
> Degree -- Nanyang Business School: First Class Honours, Dean List, C.H. Wee Gold Medal, Sumitomo Banking Corporation Scholar 
> Post Graduate -- Certified Financial Analyst: CFA L1 
> Experience -- 10 years of tutoring, Corporate Trainer 
> Status -- Full time tutor 


UOL Modules that are taught by Us:

1. Introduction to Economics
2. Principles of Banking & Finance
3. Corporate Finance
4. Financial Management
5. Principles of Accounts
6. Statistics 1
7. Statistics 2
8. Maths 1
9. Maths 2
10. Elements of Econometrics

For more information, you can visit 
www.tertiarytuition.com or 
www.starcresto.com or 
www.uoltuition.com or 
www.findtuitionteachers.com

Are you an UOL Student who needs help in your Corporate Finance?

Having problems with understanding IRR, NPV, Capital Budgeting, Financial calculator etc? Contact Val @ 9758-7925 for tuition.

Background
I have been teaching Business and Corporate Finance full time and have grasp what is important for the test and exam. I have successfully spotted questions that will come out over the past years and this has helped my students scored an average of distinction to high distinction.

I have a total of 10 years experience in teaching and tutoring.

I offer both one-to-one and group tuition. For group tuition, the optimal number of students per class is between 4 to 6. Please form your own group because this will facilitate my teaching methodology.


Teaching Methodology:

1. Understanding concepts and application of concept to questions
2. Developing graphing skills
3. Identifying exam trends and skills (Questions spotting)
4. Practicing variety of questions to prepare you for your exam
5. Simplifying difficult concepts
6. Identifying and improving your weakness

Do contact me at 9758-7925 or email val@starcresto.com or tutor@tertiarytuition.com for tuition.

Student's Profile:

> Tertiary Student --
**Poly / JC (NYP, RP, SP, TP, NP, MDIS, Informatics, SIM, SAS, ACSI)
**University (NTU, NUS, SMU, Imperial College, London School of Economics, University of Durham, Uni SIM, UOL, RMIT, SAS, MDIS, University of Southern Australia, James Cook University, University of Newcastle, London School of Economics, Manchester Business School, University of Nottingham, Melbourne Business School)
**Master (Insead, Singapore Management University, NTU, UCLA, UC Berkeley, Manchester, Uni of Southern Australia, Uni of Buffalo, Uni of Adelaide, NUS, University of State of New York)
> Working Adults -- Managers, Deputy Directors, Managing Directors, Doctors, Divisional Directors, Auditors, Analyst, Credit Advisor, AVP

Tutor's Profile:

> Name -- Valerie Chai Hui Yee
> O Level -- 8 Distinctions for O'Level
> Diploma -- Singapore Polytechnic: Merit Diploma, Honours Roll, SIM Award, Singapore Polytechnic and School of Business Scholar
> Degree -- Nanyang Business School (Top Business School in Asia), NTU: First Class Honours, Dean List, C.H. Wee Gold Medal, Sumitomo Banking Corporation Scholar
> Post Graduate -- Certified Financial Analyst: CFA L1
> > Experience -- 10 years tutoring, 3 years Tutor Training (Training up other tutors to teach)
> Status -- Full time tutor

For more information, you can visit www.tertiarytuition.com or www.tuition.starcresto.com

Asymmetric information & Agency problem - Problem Understanding? Contact us for UOL Corporate Finance Tuition in Singapore

Asymmetric information & Agency problem

Problem understanding finance concepts? SMS +65 9758-7925 or email enquiry@starcresto.com for tuition =)

"
Agency theory, a premise often associated with Jensen and Meckling (1976), was first predicated by Alchian and Demsetz (1972) who emphasised that activities of firms were governed by the role of contracts to facilitate voluntary exchange. Agency theory explains how best to organise relationships in which one party (principal) determines the work, which another party (agent) performs. Agency problems are created when the shareholders (principals) hire managers (agents) to make decisions that are in the best interests of the share- holders. These theoretical postulations continue that in general people are self-interested and will therefore have conflicts of interest in any cooperative endeavours (Jensen, 1994).

It naturally follows, then that some decisions of managers are motivated by self-interest, which reduces the welfare of the principal. As both parties can experience losses due to problems of conflict of interest, there is a strong motivation to minimise these agency costs of cooperation. Through monitoring and bonding, the costs of writing and enforcing contracts are minimised. Therefore, agency theory provides a theoretical foundation to understand human organisational arrangements including incentive compensation, auditing and many bonding arrangements. 

Where incomplete information and uncertainty exist, agency theory posits that two agency problems follow: adverse selection where the principal cannot determine if the agent is performing the work for which s/he is paid, and moral hazard where the principal is unsure as to whether the agent has performed their work to their ability. Incentives and monitoring mechanisms are proposed as safeguards against opportunism (see, Jensen and Meckling, 1976) in the agent/principal relationship. Opportunistic behaviour is assumed in agency theory, and is perceived as self-interest seeking. Thus, the expectation is that the economic actors may disguise, mislead, distort or cheat as they partner in exchange (Wright and Mukherji, 1999). 

According to agency theory, information asymmetry occurs where management (agents) have the competitive advantage of information within the company over that of the owners (principals). This results in the principal’s inability to control the desired action of the agent. Information within an organisation is critical, and management working at the “coal face” of the operations of the company are privy to essential information that can be manipulated to maximise their own interests at the expense of the principal (Godfrey et al., 2003). 

As a result of the potential conflict between agent and principal, agents are motivated to contract with owners to minimise the goal incongruence of the two parties. It is argued in agency theory that agents seek monitoring contracts because in the absence of such a contract, owners price protect heavily. Hence, agents engage in bonding activities to reduce the totality of costs imposed on them. The costs incurred in monitoring agency contracts 
reduce the manager’s compensation, therefore there is incentive for the agents to minimise these costs by refraining from conflict with the principal (Godfrey et al., 2003; Wolk and Tearney, 1997).

"

Arnold & Lange (2003), Enron: an examination of agency problems. Critical Perspectives on Accounting, 15 (2004), pp. 751–765

CAPM Capital Asset Pricing Model - Struggling with your finance? Find out how we can help!

The article below talks about CAPM and the formula. Still have issues understanding CAPM? SMS +65 9758-7925 or email enquiry@starcresto.com for tuition!

CAPM: ASSUMPTIONS

Capital asset pricing model assumes that in an open market place, all investors are well-diversified and with homogenous belief, they hold on to the same risky assets. Additionally, there is a risk-free asset where the lending and borrowing rate is the same at rf and there is unlimited amount of capital that are available. Also, it is assumed that the market has perfect information and that all investors are rational and risk averse.

CAPM Illustration

Given the assumptions, it meant that everyone has the same assets to choose from, the same information about the assets and same decision methodology (from Markowitz mean-variance portfolio theory). Thus, everyone would be choosing a portfolio on the same efficient frontier with a mixture of risk-free asset and risky assets (M). That is, everyone sets up the same optimization problem, does the
same calculation, gets the same answer and chooses a portfolio accordingly.

Since everyone is holding on to the same, risky assets portfolio, that is also known as market portfolio. Also, the fact that the investors are well diversified implies that they do not look at standard deviation which measures total risk but only on systematic risk (non-diversifiable risk) which is measured by beta. Hence, CAPM formula can be presented by 

ri = rf + βi(rM − rf)

where 

1. ri --> required rate of return for the ith stock 

2. rf --> risk free rate

3. βi --> beta of the ith stock

4. rM --> return of an average stock / market index

5. (rM − rf) --> market risk premium

6. βi(rM − rf) --> risk premium

(C) Valerie Chai Hui Yee, 2014, Capital Asset Pricing Model

To cite the work, please request for permission by sending an email to val@starcresto.com

For more information, visit www.tuition.starcresto.com

Sample NPV questions for business finance, corporate finance, financial management

Sample NPV Questions

Question 1
A two year project costs $500,000. There is a 70% chance that demand will be high in the first year in which case the net cash flow will be $80,000 and a 30% chance it will be low in which case the net cash flow will be -$40,000. If demand is high in the first year there is a 60% chance it will stay high in the second year with net cash flow of $60,000 and a 40% chance it will be low with net cash flow of -$10,000. If demand is low there is a 70% chance it will stay low with net cash flow of -$10,000 and a 30% chance it will be high with net cash flow of $20,000.

Required
If the required return is 10% should the project go ahead? What is the chance of a negative NPV? 

Question 2

There is a new product to be manufactured and it has a life of five years. The project requires a land worth $650,000. New machinery with a purchase cost of $360,000 with freight cost of $10,000 and installation cost of $30,000 is needed. Salvage value is expected to be $50,000 at the end of year 5. 

The company plans to borrow the money needed to purchase the machinery from its bank at an interest rate of 6% per annum. It will use retained earnings to fund the purchase of the land and this funding will reduce its dividend payments by $70,000 per year.

EBITDA from operations are expected to be: $350,000; $400,000; $580,000; $400,000; $340,000 respectively.
Working capital requirements are expected to be 10% of EBITDA. Working capital is assumed to be needed at the start of the year. To promote the new product the company will spend $53,000 on direct marketing in the first year.

The company’s effective tax rate is 30% and the capital allowances are at 25% of the written down value of the machinery at the beginning of each year. Any unrelieved capital allowance will be given in full in the year of disposal. Tax is payable in the same year to which it is related. To keep things simple assume the net cash flow per year is treated as the taxable profit before capital allowance.
The after-tax cost of capital for the company is 15%. 

Should you buy the machine?

Question 3

ABC Ltd is considering the purchase of a new photocopying machine that will enable its photocopy products to be printed with more vibrant colours. 

The new machine costing $184,000 is expected to have a useful life of 12 years and be able to be sold at that time for $3,000.  ABC Ltd forecasts that the improved quality of its products will generate an additional $80,000 in revenue in each of the next 12 years. The new machine will also require additional costs in colour toner each year. These are expected to b $6000 per year.

ABC current printing machine if replaced can be sold for $16,000 today. It has a book value of $10,000 for tax purposes. 

The new printing machine will require an additional injection of $5,000 in working capital, which will be recouped at the end of 12 years. In the first two years additional service costs of $2000 per year will be incurred.  These service costs are not tax deductible. Tax rates are 30% and the required rate of return is 10%. Capital allowances are at 25% of the written down value of the machinery at the beginning of each year. Any unrelieved capital allowance will be given in full in the year of disposal. Tax is payable in the same year to which it is related. 

Required:

Calculate the NPV and give your advice as to whether Fine Fabrics Ltd should proceed and purchase the new machine?

QUESTIONS TO ASK YOURSELF:

Can you do the questions?
If not, where are you stuck?
Have you grasp the concept of relevant costs, sunk costs, opportunity costs, incremental costs?
Do you understand the role of depreciation in cash flow?

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