iS iin) ~~ ® Lewes Tha proc by which a Finm ean obtain Lhe Me wa. oh eodain Lined nck, fon which At anus | cmoke a. parker ch eordbrnctsal , paride. , tay, daduclible | puspments is called Jeatg. | Oparusting bese Oparating Leese a conaltble | eonructual anrargemsrt orkencby aha Lose ayron Fo onan. poriodic. poy nents trae Lesson , often For Five or fewer peo , #0 obtain an assetx sonuite, | generally He total faymerty over Aha form of He Leos ane Ln ter than othe Leon snthinl cont or the feered arset- | Prnoneia_ bat Finandel deve ua Lorger - kam fewe than an operating heoe it non canceloble and obtigate He Sone to moke poofments, tin tHe we oh an apt over 4 frudefired period a Hime He total poynerly over He term of He leuy au groter Ahan the Losony Witial cox ob he Leaph aedin beth opercling Leare and Hinoneal deat, Ar risk ancl novourds of He qwrouhip ane trorntarra put rok Aho ownerslip: And both one a kind ch contract eats Mairdenance clause: This type oh Provirionk ae rninly Ineluolad im on opanstirg poore Ahit requir He Lvscn ynoivlain Phe assel, ard to make zr irsurance_ Pospmerts: Conckation right i Operation eae her acancelslim ferdure which not prosert én finaneicl Lene - Thut moors Foye. gbHe right bs eonal the eathayt— uyler openatirg fawsh* Aamo sigacion Operating Lowres ane net filly crmusdizeol Ufone financial Lower dee fa wrrally Ally amortized!| Renewal option : Usu cpesating sows grant Hho Jose the right th re daose ascls at the. expinlion oh phe foase ; which is upuably absertin Hinancial | foie: 5) Leaxe option: Abbr tox cask out hlows = 198,02BX(I- 0-40) = 118,850 /yeut plus Qyv,cd§ purchase option mm Jeans (dofol 853,900) t 13,300 | 0-9174 | 1089590+83 2 118860 | o-8417 | 9999-58 | % 118, 908 0: 7722 91375 -4o | 4 113,360 | g. 7024 | 8460-92 [ 5 353300 | 09-6499 233\95 3g | — | Total I, saa “10 |Srdewt calculations rs —t Yeon | Principle | Perrmurt | intenest- valence | _ - 1 | B00,or | 233020 | N2,o00 2 | 643930 | 233020 | 95057-20 ToT |S | Bulotra | 2aaeze | po 7U2 Al | 4 | %3473961) 233020 5 3723-55 5 | 204495 | 233020 | 22422004 | | | | | | |Debt Aldtannative pun chasing plen +p} = Loon pay met iy ee. ecidhion | — ae | mo Tax thaills © Abin ta Pr se Pant cork : @ @ 5 5 sea5 aoe, y 4 | 233020 gocwa [160000 112,00 16 $00 144920 y.gizy R49 FL-4B \o459F12 O-B4IF BBO3F-30 2 233020 go,600 256,00 9505720 14842298 9G, | 233020 20,00 152,682 FS FYI 9909696 153924 o-g790 8856-83 q | 233020 20,000 9ow 54923 55 6789942 \B5130-53 0- F084 ayisp ye —j| 5 | 23020 20,008 | 96D 2aCLIM HFBUEH VSIA 0 6499 \26B47- 89 —— a Jotal= 589865 +66 | Since Ae present value oh ewh cuttlows 13 Lek with the pur chai pins So tha Him sheald puncfose. Hhe machina » By rpg 82, id goutes $QBAOG US In proc? value down,- Jhuswer do Lhe qgeertion nw 2 @ . Didorsnces balun Lhe cunslant ytowth yrodel ard CAPM Sn dem, of to the coat Leann Muck the Comiterct- growth valucclion model ayo capital al Pricig medal bitter mn ow number ok ways: “here are diseuped below: Hy The CAPM conridon the binms risk 0 reoffected by JB (bake in declenriniirg Ahe required reale on cont ch eammm stock eamity + While , the eorstant grok qnodel doer net at risk, it usey Hhe ‘market price Py as a peflacion of Ha anpedtecl risk-retunn prepernce oh investor in the monked place - Look Th Th contonl growth voluudin model giver Lhe aplion to adeput Be flotation cort Lo bird dhe cont ch extteman “new canrnen stocky The CAPM does wt pride a Aimple adjustment qnechooiam hike Ais -TH a The constant grew valuation model 4 net Wéful , when a company snewrs Sune. 7 dow net poy diaderd, a4 Ahe corsfart yrouh medal Copaidern dividend in calewbolpy Hhe con oh cotinnen Aleck; while the CAPM doer yt fone suck dyue Poti geben ne 2 ® O Ablertax conf of debt: op + LD) 956 +1608) HNO F77 2 Ka < " Meler-dor coat oh debt = 10:77 (1-0-40) = 64by Ci) Coat ok profersad stocks Ko - bw __8 PS TN 7 Gsay = FoxWL Cod ch commen Hoek Jeon | dividend | gptowthnate | 15 | B45 0-0F]429 | 214] 5 0-060606 | 231 33 004 F619 2012] BH os 10563 _ ON) 2-85 a Averege per on contard qos rete = (0071429 + 0+066606 + 0: 04 7619 +0-105.263) /Y = F12% Net proceeds = Cunrwit price - price adjustment - be cks'en cont go OO 2 : _ 4 ; “Ke 2 y+ 07 2 Wbb6uy ‘N) Waighded Average Cost ch cabltak : LT debt OUSX UR = 258% prokevud suk 0-10 K \aFoy. = ary commm Atoeek 0-50 10-64%. =P Ry Naa Nasee ANN tl Anwar 4 bonw-quetion ci) & Jowunal : Aceowsting Auditing & Aeecunitability TJounnal City of publication, Cemeruille , Mazachusetls, USA A Doumal at Accousthieg 1 Avdieg ard Finoned ay oh publications California, USA 3. dournal Ar Ae covribing Research GH: Chieago , UCA Q The Accounting Remiew- oy. Florida, USA | i Aceouniieg avd Burin Roxeazeh ay Lavon) UK:Ayw.ds the bonus quertion (ii 4. Finandal Manage mont Aubbon: 1M Pandey 2+ Fundamentals ok Coreporote Finonee Austons + Stephan A: R046 Rordodbh W- westerfield Brudfurad D> Jordan 9. Fundamentals ch Financial Managernent Avo : “oomeg C+ Van Horne John M + Wacho wieZ Jn > Principles wn Monageniel Finonee Authors: Lawrence J: Giitman Chad J+ 2ubler 5 Appsied Corporate Finance Audhon: Aswath Damodanan: