had to find appropriate values for Beta D and Beta E. For Beta D‚ we assumed that Ameritrade holds a Corporate A debt rating for their bonds which is 0.21 (Journal of Financial Economics‚ July 1963-December 1991). After this‚ the BE (PROJECT) needed to be computed. Charles Schwab and Quick & Reilly were used as comparable for determining the BE (company) for TD Ameritrade. After running a Regression in Excel‚ it was determined that both Charles Schwab and Quick & Reilly had BE’s of about
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Cost of Capital at Ameritrade What factors should Ameritrade management consider when evaluating the proposed advertising program and technology upgrades? Why? Mr. Ricketts believes that his role as CEO is to maximize shareholder value by accepting any project whose expected return on investment is greater than the cost of capital. Therefore‚ the main factors that Ameritrade management should consider are the expected return on investment for the project‚ and how this compares to the project’s
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Questions and Analysis 1. What factors should Ameritrade management consider when evaluating the proposed advertising program and technology upgrades? Why? a. Opportunity Cost – Will Ameritrade benefit from spending money on advertising and technology upgrades more than the next best alternative and more than reinvesting the money. b. Debt-to-Equity Ratio – If this ratio is high then Ameritrade may be able to generate more equity and increase earnings by more than the cost then
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to trade stocks! Brokers aren’t used nearly as much as they once were. 1. The stock market sounds really appealing but learning where and how to do it is a pain 2. The most common way people trade and what I personally use is Thinkorswim by TD Ameritrade. The advantage of this platform is that it offers a fixed commission instead of a %. Also‚ the platform has ability to view charts with greatly helps most traders with Technical analysis which is looking at pattern Reference Keown‚ Arthur J. Personal
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Spring 2010 Ameritrade - Harvard Case Study Background: Ameritrade Holding Corporation is securities brokerage services and technology-based financial services firm from the United States. The company was founded in 1971 and is headquartered in Omaha‚ Nebraska. “Ameritrade MERITRADE for self-directed retail investors; TD AMERITRADE Institutional that provides brokerage and custody services; trading platforms that enables research and analysis; a suite of education
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Ameritrade: Cost of Capital What factors should Ameritrade Management consider when evaluating the proposed advertising program and technology upgrades? Why? When considering the proposed advertising program and technology upgrades‚ we have to ensure that the project will likely add value to the company‚ so we need to consider the return on investment versus the cost of capital. If the return on investment‚ measured by the net present value and internal rate of return‚ exceeds the cost of capital
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Finance 5204 Managing Corporate Capital Investment and Capital Structure Case1 Cost of Capital at Ameritrade By: Elaine Huang Jonathan Hudson Christopher Lenker AMERITRADE DOES NOT HAVE A BETA ESTIMATE AS THE FIRM HAS BEEN PUBLICLY TRADED FOR ONLY A SHORT TIME PERIOD. EXHIBIT 4 PROVIDES VARIOUS CHOICES OF COMPARABLE FIRMS. WHAT COMPARABLE FIRMS DO YOU RECOMMEND AS THE APPROPRIATE BENCHMARKS FOR EVALUATING THE RISK OF AMERITRADE’S PLANNED INVESTMENTS? WHY? We recommend using the following
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1997‚ Ameritrade has been growing rapidly in sales while maintaining higher than 40% ROE(on average) during 1975-1996. In March 1997‚ Ameritrade filed IPO on NASDAQ (AMTD) and raised $22.5 million. The main purpose of the IPO is to allow the company to continue its growth. Therefore‚ The CEO & chairman‚ Joe Ricketts‚ has approached our firm and eventually retaining our service to help him evaluate his substantial investments in technology and advertising. While the investment is being expected to
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more or less 22 million clients worldwide through four key business lines: * Canadian Personal and Commercial Banking including TD Canada Trust and TD Auto Finance Canada * Wealth and Insurance including TD Waterhouse‚ an investment in TD Ameritrade‚ and TD Insurance * Wholesale Banking including TD Securities * U.S. Personal and Commercial Banking including TD Bank‚ America’s Most Convenient Bank and TD Auto Finance U.S. Adjusted Present cards thirty-one‚ 2013‚ TD had CDN $818 billion
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Getting Started in Excel Many of the editing tools that you use in Excel are similar to Word and PowerPoint You will need to become familiar with a few new things for Excel: Rows‚ Columns‚ Various Formulas‚ and Charts just to name a few When you see a reference such as A7‚ A is the column and 7 is the row‚ this will give you the particular cell that is being referenced. You will learn that you can click or enter in information when it comes to cells and formulas. Everyone will have their own
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