tag:blogger.com,1999:blog-8152901575140311047.post4930494305127406914..comments2024-03-29T03:33:47.317-04:00Comments on Musings on Markets: Time to Split!!Aswath Damodaranhttp://www.blogger.com/profile/12021594649672906878noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-8152901575140311047.post-52731106014766955322010-02-12T16:38:46.079-05:002010-02-12T16:38:46.079-05:00Prof Damodaran - What about the implications of BH...Prof Damodaran - What about the implications of BH's split in terms of gaining access to the S&P 500, where more share purchases may occur due to its association with S&P Index funds?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-35687714162411743902010-01-31T10:15:33.820-05:002010-01-31T10:15:33.820-05:00Thus, while calculating NPV we can either take int...Thus, while calculating NPV we can either take into consideration only incremental cash flows to make a decision about continue with the investment or not, or we can also include in calculation all sunk costs in order to know whether our original investment was beneficial. Am I right?Vadimhttps://www.blogger.com/profile/03958014982173279810noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-5725476725946781362010-01-29T11:27:51.187-05:002010-01-29T11:27:51.187-05:00If you are using the IRR for decisions (to continu...If you are using the IRR for decisions (to continue with the investment or to abandon or sell it), the IRR has to be based entirely on just incremental cash flows. That is, you would use what you could get by selling or abandoning the investment as your initial investment and the expected cash flows in future years to compute the IRR. The last 4 years represent a sunk cost and become irrelevant for decision purposes, though it can be used for evaluative purposes (Was the original investment a good one? Should someone be fired or rewarded?)Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-75260939043654846392010-01-29T06:04:11.740-05:002010-01-29T06:04:11.740-05:00Dear Professor,
I would like to ask you a questio...Dear Professor,<br /><br />I would like to ask you a question.(not directly related to the topic)<br /><br />For instance, we calculate the IRR of a project at time 0. Four years pass, and we want to recalculate the IRR of this project (at the end of the 4th year). How do we have to treat the outlays made within these 4 years? Do we have to include them in the IRR calculation? Thus, is IRR always forward looking?<br /><br />Thank you for your answer in advance<br /><br />VadimVadimhttps://www.blogger.com/profile/03958014982173279810noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-75363802784607529512010-01-28T14:22:39.408-05:002010-01-28T14:22:39.408-05:00Why does per share matter? What matters is how muc...Why does per share matter? What matters is how much you will be paying as a percent of what you invest and you will pay more after a stock split.Aswath Damodaranhttps://www.blogger.com/profile/12021594649672906878noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-57710128457490508102010-01-27T08:57:00.741-05:002010-01-27T08:57:00.741-05:00What about cost of acquisition per share? If you h...What about cost of acquisition per share? If you hold 2000 shares at 100 and 2:1 split will be advantageous to you? Assume current share price is at 200 before the split.Aseem Madanhttps://www.blogger.com/profile/04643335491325279882noreply@blogger.comtag:blogger.com,1999:blog-8152901575140311047.post-80897176370677363372010-01-24T10:32:17.041-05:002010-01-24T10:32:17.041-05:00So beautifully summed up the entire Stock split to...So beautifully summed up the entire Stock split topic. Sometimes I wonder if you are cannibalizing ur own text book business through the info and analysis that u share with us in ur website and blogs!Mahesh Sethuramanhttps://www.blogger.com/profile/01909074683189926487noreply@blogger.com