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Fundamentals of Corporate Finance, 4/c/e

Fundamentals of Corporate Finance, 4/e

Stephen A. Ross, Massachusetts Institute of Technology
Randolph W. Westerfield, University of Southern California
Bradford D. Jordan, University of Kentucky
Gordon S. Roberts, York University

Long-Term Financial Planning and Corporate Growth

Internet Application Questions


1		The following web-links take you to three very different companies in terms of their growth characteristics. Examine their financial statements, with particular regard to their dividend policy, external financing, and capital structure. Estimate the maximum sustainable growth for each company assuming no new external financing. Xerox Corporation: Xerox has experienced difficulties generating growth in revenue and earnings in the recent past. Examine the 1999 financials under Investor Information and estimate the total funding requirement for the following year. Comment on Xerox's high dividend yield. Where do very high growth companies get their financing from? Examine the following two companies' financials and identify the financing source for the most recent fiscal year. What is their P/E ratio? What sort of growth is implied by these P/E ratios? Telus (click on Investors under aboutTELUS) Cisco Systems (click on Investor Relations) The following site provides a sample business plan that is specially useful for small businesses. Identify the three most important ingredients in this plan. The site also provides a primer for cash flow forecasting.

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