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content  adjusted present values  financial decisions  the modigliani and miller hypotheses  practical aspects of the financing decision  dividend policy knowledge checklist able to understand the relationship between financing and investment decision; able to calculate an adjusted present value (apv); able to explain the fundamental issue with respect to financing decisions i.e. it is possible to increase the value of the business through it`s financing decisions; able to understand the mm capital structure hypotheses both with and without tax; able to explain the extensions to the basic mm analysis provided by miller(personal tax) and brealy and myers(the costs of financial distress and agency costs); able to use the mm formula to calculate the value of a geared company together with the cost of equity and the wacc; able to understand the practical aspects of the financing decision and to calculate the impact of financing decisions on both gearing (and it`s significance) and eps; able to explain and discuss the significance of the dividend irrelevancy hypothesis. |
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