AFM373 Lecture Notes - Lecture 1: Minimum Acceptable Rate Of Return, Delaware Route 1, Risk-Free Interest Rate
22 Apr 2017
School
Department
Course
Professor
Document Summary
Operations incorporated more than 120 years ago and in 2007 had 80,000 employees. 2. 10 million barrels of oil per day 6. 4% increase from 2005. 7. 28 billion cubic feet of natural gas/day- less than 1% increase. Most profitable business, net margin for past 5 years highest in industry expect heavy investment in acquisitions of properties, reserves to expand production. 40 refineries around the world, 5million barrels/day largest revenue producing segment products highly commoditized so competitive projected wacc would remain stable or longer-term global shortage of refining capacity that would spur investment. 2007 financial strategy based on 4 objectives: find overseas growth, invest in value-creating projects in all divisions, optimize capital structure, opportunistically repurchase undervalued shares. Overseas growth easily exploited domestic resources are being put into production. Borrow in its energy reserves and in long-lived productive assets. Debt levels reevaluated and long-term targets set accordingly. Changes in energy price levels correlate with changes in their stock price so need to reassess often.
