comparison between EDF group (МдlectricitМ© de France) and E.ON S E from an investor's perspective point of view

comparison between EDF group (МдlectricitМ© de France) and E.ON S E from an investor
Masters
Assignment
Finance & Accounting
Pages 16 (4016 words)
Download 0
Introduction Many companies exist in the present and not all companies perform as well as others. The performance of companies is a critical area for some, mainly the investors who have invested capital amounts into the company. Investors can use a wide variety of tools to measure performance, but mainly focus on financial analysis, including ratio analysis, as well as other finance tools such as the Capital Asset Pricing Model (CAPM)…

Introduction

It is assumed that the reader has basic knowledge of these tools of analysis. Capital Asset Pricing Model (CAPM) According to Rai University: “The CAPM was developed to explain how risky securities are priced…CAPM aims at a more practical approach to stock valuation.” The assumptions of CAPM include: 1. Investors hold diversified portfolios 2. Single-period transaction horizon 3. Investors can borrow and lend at the risk-free rate 4. Perfect capital market (Rai University, 2013) Capm reflects that investors need to be compensated in two ways Time Value Of Money Risk (Investopedia, n.d.) The risk-free (rf) rate in the formula represents the time value of money invested at a minimum rate while the other half of the formula represents market risk applicable to the company. CAPM is in the view that the expected return of a stock is equal to the rate on a risk-free stock plus a risk premium. If the expected return does not match or meet the required return then any such investment is termed to be not feasible and is not to be carried out. The betas calculated in the attached working represent the risk of the specific company in relation to the market. ...
Download paper
Not exactly what you need?

Related papers

Acquisition of International Power in UK by Gaz de France
The combination will make the expanded International Power as a market leader in the regional markets like North America, Middle East, Latin America, the Europe-UK, Australia and Asia. For instance, prior to the amalgamation, the International Power do not have any operations in Latin America, and GDF Suez does not have operation in Australia and after the combination, they have access to these…
Principal Perspective from Coaching Teacher"s lesson"s
2.0 Introduction Leadership in education has been defined in a plethora of ways over the last decades and this accumulation of varied definitions serves to make the immense differences in opinions and discernment about school leadership more apparent. Historically, educational leadership was considered a means of support for teaching staff by heads of department, school principals, lead or master…
Acquisition of International Power in UK by Gaz de France
Mergers have been one of the most effective options for companies seeking growth and expansion. This is because merger has the potential of ensuring rapid and speedy turnovers in terms of the revenue, market size customer base and physical infrastructure of a company. This however does not mean that mergers are free from challenges. In this report, it was not the merits of the merger between…
Comparing between two banks ( in the view of an investor)
It also provides my opinion concerning about the banks as a whole and what is best. The credit cards that are offered by the Abu Dhabi commercial bank are the best when compared with those from the Islamic bank. This is mainly because it offers services that are attractive for their customers and other investors unlike the credit card from the Islamic bank (Aldohni, 2012). First and foremost the…
Risk Assessment: Internal Control Evaluation from an Auditors Point of View
A proper internal control system entails the execution of efficient and effective control activities at different areas of an organization. The internal control system should be set up by the management parallel with the strategies and objectives established by the board of directors or management, and should incorporate all workers in the organization. The activities should be evaluated and…
financial analysis ( case study ) comparison between two firms
The purpose of financial analysis is therefore spread among the users of financial statements who have defined reasons for accessing the statements. For example, to determine the firms’ ability to pay bills or debts, use of assets efficiently, dividends per the share and the profits gained from its business. This paper hence seeks to give a detailed strategic review and financial analysis of two…
Investment opportunities and risks in stock markets: A comparison between emerging and developed economies
These markets comprise developing nations- which are starting to attain swift economic growth as well as liberalisation in recent times. On the whole, the growth rates in these developing nations over the previous ten years have remained twice that of the developed nations. Moreover, this trend is likely to continue in the coming years. As a result, organisations and business houses instituted in…