Equity Case Studies Samples For Students

i) Calculating cost of equity using CAPM Model:
Capital Asset Pricing Model, often abbreviated as ‘CAPM’, is the most fundamental concept in the investment theory of present time. This is an equilibrium model that predicts the expected return on a stock, given the expected return on the market, the stock’s beta-coefficient and the risk free rate. Considered from the borrower point of view, this model is used to calculate the cost of equity for the company using the following formula:
Cost of Equity= RFR+ Beta(Equity Risk Premium)

Below is the detailed explanation of cost of equity calculated for Tim Hortons Inc:

Risk Free Rate: This refers to rates being offered by ...

AES is a leading independent supplier of electricity in the world with more than $33 billion in assets. Rob Venerus, the director of Corporate Analysis and Planning group was faced with a task of calculating the capital cost of the business. Many financial information and results were collected from subsidiaries in June 2003. The manager was obligated to develop a methodology to use the data to determine the costs of capital significantly in valuation and for capital budgeting. The group was created to solve the financial crisis, current and future strategic challenges.
The global economic instability had adverse effects such as ...

Debt and equity financing for an investment outsource

In the investment of technology, in an organization, the stakeholders will consider the benefits that will ensure that the value, share and wealth are raised. To consider the debt or the equity financing, they will evaluate the level of returns. Debt financing is where they take a loan so as to invest in technology development. Even though it does not dilute the business ownership, it has a number of shortcomings. Money must be paid in spite of the business success. It requires commitment of the business assets and to the extent of the personal assets as collateral.
On the other ...

Introduction

Most business enterprises are normally creations of ingenious business minds that make difficult financial decisions in order to take the business to the next level. In most occasions, only businesses with spectacular principles and competitive managers have an edge over competitors thereby staying in a market. An important aspect of a business is its mode of financing which can either be equity or debt business financing. This paper gives a comprehensive discussion on the advantages and disadvantages of both equity and debt as business financing strategies. Additionally, the paper gives a recommendation on the decision of AMSC to settle for equity financing.

Discussion

Advantages ...

Accounting Concepts

Answer 1)
Partnership is a business organization with two or more owners who agree on sharing profits at an agree ratio but at the cost of unlimited liability. Apart from profits, they must agree on the appropriate management structure also. Following are some pros and cons of a partnership firm:

Pros:

- It is easy to set up
- It offers diversified decision making process
- Profits fo the firm are taxed only once as onwer’s income

Cons:

- Regular collisions among partners might be possible and thus achieving consent of all may be slow and expensive
- ...

Whenever investors want to make a good buy, they always look at a number of parameters including earnings per share, earning growth rate, and debt-to-profit ratio. These parameters are very important to an investor because they ensure that investors identify the best companies for investment. However, there are other parameters that enhance an investor’s returns. A company’s beta value is one of the most important parameters that enhance returns. This is because investors can use it to analyze the tradeoff between risk and return. Understanding Apple’s beta value is an important factor in stock research for any investor. ...

Q42.

A. It is very unlikely that Carol will succeed with her breach of contract case. For such a case to succeed, she should prove that there existed a contract between her and Sandy to lawn the yard, which was not the case. Typically, for a contract to be valid, it must meet four basics: offer, acceptance, mutual assent and consideration. All these were lacking in the issue. It was her mistake that she took the wrong details and worked on a different yard
In a contract, one party must propose to sell a certain service or product to the second party. This was not ...

Business

5 June 201

Question 1

i). Bank Loan

ii) Sell stock to equity investors
In the case of sale of stock to the equity investors, the sales will increase in the income statement, and in the balance sheet the stocks (assets) will decrease.
iii) Extended credit terms from vendors

In this case, the assets will increase, and the payables also will also increase in the balance sheet.

Furthermore, in the above-mentioned cases
- Liquidity Ratio
- Debt Ratio
- Payable turnover Ratio will be influenced.

Considering bank loan, when loan is taken the liquidity ratio will increase, and the debt ratio will also increase.

In the case of the sale of stock to the equity investors, liquidity position will be better so the liquidity ratio will increase, and the debt to equity ratio will ...

Report on Financing Wetsuits Private Limited Company.

Report on Financing Wetsuits Private Limited Company.
Equity Beta is a signal of the consequential risk that comes from ordinary shares returns. It is also referred to as levered beta. The difference between the equity and asset beta is that there’s a positive correlation with debt amount on the financial structure of the firm. The Wetsuits equity beta is derived from

Stock’s rate of return = (2 / 8) x 100 = 25%
Market rate of return = 12%
Beta is obtained by = (Stock rate of Return – Risk free Rate) / Market Rate of return – (Risk Free rate)
...

Introduction

In Finance, Capital Structure means the way a company finances its assets through debt and equity. For example, if a firm is known to have financed 70% of its assets using debt and 30% using equity then the company is said to have a leverage of 70%. The higher the leverage, the more risky is the company from financial and investment perspective. There are different theories on the capital structure. Modigliani and Miller are known to be the founding fathers of the capital structure modeling in a perfect market. In a perfect market as per Modigliani and Miller it does not matter how a company ...

Question 1:

According to FASB ASC Topic 810-10-25-10, protective non-controlling rights are rights that have been formulated to give the non-controlling shareholder power to obstruct corporate dealings that would be classified as protective rights by the investor holding a majority of shares in an organization. This help to ensure that the interests of the non-controlling shareholder are protected in order to ensure that decisions that may affect his or her wellbeing are implemented-

Question 2:

Substantive participating non-controlling rights are rights that allow the non-controlling shareholder to take part in some corporate actions that overcomes the presumption that states that the investor possessing a majority ...

In our calculations we will use Annual Report for the fiscal year ended February 2, 2013 (Form 10-K). In order to evaluate WACC, we need to analyze the structure of Target’s capital, mainly its debt, leases, common and preferred stock.

Capital Structure

The structure of Long-term debt is provided in Table 1:
The structure of Capital and Operating Leases is provided in Table 2:
According to the Annual Report, Target Corporation has 645,294,423 shares issued and outstanding at February 2, 2013. Company has issued no preferred stock.

Marginal Cost of Debt

According to finance.yahoo.com, yield for 10-year corporate bonds with ...

Reconciliation Income Statement

For the year ended 31 Dec 2011 .
Profit as per GAAP $1,000,000
Add
Inventory (realizable) 190,000
Deducted impairment loss 6,000
Gain from sale and lease back 150,000
Total income 1,346,000
Deduct
Inventory (historical) (152,000)
Impairment loss (5,000)
Net Income (IFRS) 1,189,000

Reconciliation Statement of Stockholder’s Equity

For the year ended 31 Dec 2011 .

Stockholder’s equity as per GAAP $8,000,000

Add

Revaluation gain 720,000

Intangible assets fair value adjustment 1,000
Total 8,721,000
Deduct

Development cost capitalization adjustment (120,000)

Stockholder’s equity as per IFRS 8,601,000
Notes
The addition of ...

- The stockholders’ equity section of the balance sheet gives an analysis of the several classes of shares held by shareholders and the company as at the end of that financial period, December 31, 2007. It gives details of the number of the various types of stock that are held and further goes on to give an analysis of the shares that have been issued and those that are outstanding. The statement of stockholders’ equity (exhibit 4) is almost similar to the stockholders’ equity section of the balance sheet, the only difference being that it is more detailed. It ...

Introduction

This is a case study of the Waterway Industries and its CEO, Cyrus Maher – the problem of increasing the benefits and salary of Lee Carter, the person in charge of the marketing department and is also the star player. This is focused on the decision he needs to make to either move his company forward or not make to keep his company how it used to be for over twenty seven years. This case study gives a typical scenario experienced by most CEOs when their companies expand and they have to either go along with the expansion or risk losing the ...

In early2003, Boeing aeronautical company announced its plan to build a ‘Super efficient’ airframe known as the 7e7, which was subsequently dubbed the ‘Dreamliner’. Michael Blair the team leader of the project announced in June 2003 that the 7e7 Boeing project was making excellent progress though amidst an unfriendly working environment. The technological superiority of the new airplane and the fact that the project had to penetrate an already rapidly growing market were the major arguments for the approval of the project. In addition, the idea of the airframe project came shortly after news of a six-month depressed airline market which ...

E.I. Du Pont (1983) Case
E.I. Du Pont (1983) Case
1. Reasons why the firms use capital structure policy; target debt ratio
A capital structure policy is essential for firm due to the management and sourcing of capital to achieve corporate strategy. It determines where the funds will come from both internally and externally. (Biais, 2002). There are various forms of capital strategy, which include a target debt ratio. In this policy, the ratio of debt is the tool that is used to manage the capital structure in a company.
The capital structure policy also enables the ...

1. According to Welch I (2005), WACC or amply the weighted average cost of capital is a rate to the firm that shows the cost of capital of running that firm. It is a calculation of a firm’s cost of capital showing how each category is weighted proportionally showing the categories percentage of the total capital of running the firm. In the calculation of the WACC, all capital sources like stock (common and preferred), debentures, bonds, and other sources including short and long-term debt are incorporated in the calculation of WACC. It should also be noted that WACC is a rate which ...

Cost of Equity Capital

Cost of equity can defined as the opportunity cost of raising finances through equity. Equity comprises of ordinary share capital and retained earnings of a company. The rate of return expected by investors is the same as the cost of equity. Cost of equity is therefore important in valuation of shares. However, unlike debt securities, which have fixed interest, dividend paid on equity securities fluctuate over time. It is in the discretion of the management of any company discretion to determine how much dividend to pay in case they decide to pay dividend. This makes it hard to estimate the ...

About the report

The report is commissioned to discuss the possible financing options for Outdoor Limited which is currently seeking external funding for expansion purpose and is also likely to face liquidity issues once three of its five investors, liquidate their holdings. Henceforth, each of the possible sources of funds will be evaluated considering the present situation of the company
The second part of the report will be used to discuss the tools of foreign exchange risk management as the company is exposed to FX risk, citing an outward transaction as part of which it will be paying $2 million in six ...

I. Capital Structure Choices

Table 16 TI’s Statement of Current and Long-term Liabilities

Accounts Payable

Accrued Expenses

Deferred Revenues

Other Current Liabilities

Total Current Liabilities

Total Long Term Debt

Table 17 TI’s Statement of Shareholder’s Equity
Shareholder's Equity

Deferred Income Tax

Minority Interest

Other Long Term Liabilities

Total Long Term Liabilities

Total Liabilities

Common Shares Outstanding

Preferred Stock

Common Stock, Net

Additional Paid-in Capital

Retained Earnings

Treasury Stock

Other Shareholder's Equity

Shareholder's Equity

Total Liabilities & Shareholder's Equity

Figure 6 TI’s Debt and Equity Structure, 2007 to 2011

A. Capital Resources
Texas Instrument’s liquidity comes ...

Red Bull was established by Dietrich Mateschitz in year 1985. Company introduces energy drink exclusively in Austria in year 1987. After five years of exclusive operation in Austria Market, Company expanded its business in European market. Company decided to slowly enter into foreign markets in order to create buzz and anticipation. This paper intends to analyze brand equity and other related aspects of Red Bull.

Answer 1

Brand Equity
Brand Equity reflects value premium earned by the company from its product that has well recognized and establish brand name in the market as compare to competitors. Company creates brand equity ...

Introduction

Financial performance analysis is crucial for various stakeholders given the varying needs for performance information on various business aspects. In that respect, effective analysis entails evaluating performance over a period or comparing a company’s performance with industry peers. It also entails evaluating various performance areas using varying tools including financial ratios. In that view, the following is a report on Wyndham Worldwide Co. financial performance identifying the performance trend for the period beginning 2012 to 2014 and comparing its 2014 performance with that of the industry peers.

Analysis

Company Overview
Organization and history
Wyndham Worldwide Co. is a brand offering hospitality ...

How should Jonathan describe the rationale of the dividend discount model (DDM) and demonstrate its use in calculating the justifiable price of PCU share?
Firstly, Jonathan should explain to Dwayne that there are different methods how a financial or a security analyst can analyze the fundamental and technical aspects of a security, which in this case is the PCU share, including its price, the forecasted growth rates, and a lot of other aspects. There is more than one way of predicting the future stock price of a company . A security analysis can focus on the fundamental aspects of the company such as the ...

A diversifiable risk refers to risk that an investor can eliminate if he held an efficient portfolio while a non-diversifiable risk refers to risk that still present in all adequately diversified portfolios. The investor, therefore, seeks to eliminate the diversifiable risk by adding more assets to the portfolio.

a) A substantial, unexpected increase in inflation is a non-diversifiable risk. This is because a substantial, unexpected increase in inflation will affect all assets that an investor can invest in. Therefore, the risk cannot be eliminated by adding more assets to the portfolio.
b) A major recession in the U.S is a non-diversifiable risk. This is ...

Executive Summary

The case is regarding the recapitalization plan of Moe Miller, the new managing director at M&M Pizza. Miller is concerned about the stagnant share price of his company at around F$25 per share. Miller plans to issue F$500 million debt to repurchase shares.
He thinks that by repurchasing shares and changing the capital structure of his company would be beneficial to both the company as well as the shareholders. A higher proportion of capital to debt would result in lower cost of capital while share repurchase would result in higher share price due to higher dividend per ...

Abstract

Business success is measured on a scale of its growth and expansion. Expansion is essential as it places a business on a better competitive edge in the market place. The level of growth on the other hand may be subjected to the level of the capital base. Wise selection of finance therefore, for an already established business is the stepping stone to being competitive in the market place. Besides, the firm and form of financing require concrete analysis to avoid compromising the equity stake of the business while accessing the fund. Also, the source of funding should not compromise the business ownership ...

Calculating cost of equity using Gorden Model:

In the first section of this paper, we will calculate the cost of equity of Nike Inc. using the Gorden Model as part of which, recent dividend payment will be used for estimating the cost of equity multiple. Followed are the calculations:
Value of Stock: Current Dividend(1+Growth Rate)/ (Required Rate- Growth Rate)
58.02= 0.62/( Required Rate- 0.1209)
= 13.15%

Here:

Growth Rate= Compounded Annual Growth Rate for past 5 years
= (0.62/0.35)0.20- 1
= 12.09%
Therefore, following Gorden Model, we found that the cost of equity for Nike Inc is 12.09%. However, because of the limitations of Gorden Model, ...

Introduction

The report presents discussion and analysis of compensation strategies of Nucor Corporation. The organizational structure significantly impacts the compensation system of an organization that affects its ability to attain strategic goals. If the compensation to executives is not aligned with the organizational culture then it may lead to adverse impact on the firm’s performance and lead to other consequences. Several studies indicate that the organizational culture has a significant impact on compensation as well as the firm’s performance. The firms offer different types of compensation to their executives that may affect the compensation structure. However, they are ...

Question 1

She can create departmental and overall budgets that can be used to monitor performance by ensuring costs are minimized and revenues are maximized.

.Question 2
Return on Equity = Net Income/Total shareholder Equity

Actual

ROE = 20,999/225,888 = 8.98%

10% Debt

ROE = 19,359/203,299 = 9.52%

20% Debt

ROE = 18,419/180,710 = 10.19%
30%
ROE = 17,480/158,122 = 11.05%
Debt in the capital structure enhances the returns on equity the company realizes. The computations above based on exhibit 9 reveal that the return on equity increases as the debt ratio increases. It can be explained by the fact that debt shield some of the income ...

The European sovereign debt crisis dominated international financial markets during 2010-2012. Economies fell into recession and financial market volatility was high. Critically analyze how the government debt problems initially faced by a few relatively

Introduction

The European financial crisis has extended beyond borders and is now affecting other countries in various condiments. China and United States of America are the most affected nations because they depend a lot on European countries for exports. The world is facing a critical problem brought about by the financial crisis, and financial experts are yet to determine the solution to this problem. The global economic meltdown of ...

Abstract

Many individuals who have had great ideas have in most cases fallen short of their dreams mainly due to the fact that they could not find proper funding for their dreams. In most cases, there has been procrastination of startup of a business venture with the notion that in the near or distant future, there will be available funds to kick start the venture. To their disappointment, there have been stricter demands for loans and other financial assistance from lending institutions like commercial banks coupled with ever increasing interest rates on the loans applied for mainly due to financial crisis ...

The firm does not have debt. Therefore, the firm value is the outstanding number of shares multiplied by market share price.
Value of Wrigley’s = 232.44 million *56.37 = 13.103 billion dollars

We assume that Wrigley uses the debt that has been raised to pay dividends to shareholders

Value of Wrigley’s = Market value of Equity + Debt Value
Value of Wrigley’s = 13.103 billion + 3 billion = 16.103 billion dollars
The proposed coupon rate is 13 percent. After the re-capitalization, the total debt ratio will be 73 percent. Therefore, the Bond will be rated between grade BB and grade B. The effective debt yield for a grade B debt security is 14.67 percent while that if grade ...

The company has financed its operations using the initial investment, limited partnership, and five different private equity offerings. The initial investment was $2,000 put into the company by Jim Hornthal, its founder. The company also entered into a limited partnership that enabled it to raise $387,000 from wealthy individuals. It then raised money by issuing preferred shares (Series A shares) in a private equity offering. These funds were used to finance the Non-broadcast Program Development. Series A shares raised $98,000.
The firm’s Television Programming development phase was financed through 13 different private equity offerings. This ...

Company’s financial statements provide crucial details on different aspects on its operations. That includes information about its performance in terms of profitability, assets utilization and management efficiency, business liquidity as well ability to provide a suitable return for its stockholders. Thus, understanding the statements is crucial in all planning including operations, financial and marketing. In that respect, this analysis seeks to demonstrate how the statements can be used as a guide on marketing planning and general business management. To achieve that objective, the analysis uses the case of Abercrombie & Fitch and analyzes its financial statements for the year 2012 and ...

Introduction

The European financial crisis has extended beyond borders and is now affecting other countries in various condiments. The world is facing a critical problem brought about by the financial crisis, and financial experts are yet to determine the solution to this problem. The global economic meltdown of 2008 found the European Union struggling with the unshakable financial crisis that has been slowing the growth of European currency, the Euro. As the crisis enters its third year, the European and the whole world is worried whether it would end up affecting the world economy leading to world financial crisis (European Commission ...

Introduction

A leveraged buyout (LBO) is the process through which a company is acquired by another one that gets a significant amount of capital from borrowed money. This act is a process that involves the buyer putting up the assets or expected profits of the newly acquired company as collateral to the financial institution that is giving out the loan (Haddad, Loualiche, Plosser, & National Bureau of Economic Research, 2016). This type of purchase carries significant risk for the buyer since the ratio of borrowed money to the invested money is usually 9: 1. The borrowed money accounts for eighty to ...

Five Below, Inc. is a retail chain belonging to the specialty retail industry which was incorporated in Pennsylvania, USA in 2002. It offers “dynamic, edited assortment of exciting products, all priced at $5 and below, including select brands and licensed merchandise” ("Overview | Fivebelow"). Five Below’s products range from sports equipments, styling merchandise, small décor items, craft works to candies and party items. It largely targets customers who are teenagers or pre-teens.
Since the company’s inception, it has expanded its business to almost all regions of the United States and has been successful in opening more than ...

Dat

Analyst Report: NordStorm
About the company and overview
Founded in the year 1901, Nordstorm is a fashion retailer and one of the top rated operators in the departmental store industry. The company has successfully enhanced its brand equity by developing differentiated curated products, increasing storing count and targeting niche customer base. Most recently, the company is in news for investing in omni-channel capabilities as part of which, a heavy expenditure is made on store improvement, expansion and improvement of IT infrastructure.

Competitive Advantage

a) Investment in technology
Nordstrom thrives of providing fabulous shopping experience to its customers and this has remained ...

The film describes a group of employees of a fictitious company «Initech». Shortly after the start of the film the company hires two consultants named Bob (namesake) in order to help the company reduce its costs. These two Bobs basically interview employees to determine who need to be fired.

CORE ISSUE

Peter is in stress. His work in office reduces his effectiveness because of his stress. Peter knows that he risks being dismissed in the list compiled by Bobs. An absurd accident comes at a time when his girlfriend takes him to the medical hypnosis therapy. The physician-hypnotherapist dies of a ...

Question 1

She can develop a financial plan for short term and long term duration that will act as a roadmap and a benchmark for performance evaluation.

She can develop financial recommendations based on deviance reports from financial projections.

Question 2
Debt financing increases the return on equity (ROE). From exhibit 9 it can be observed that the net income available for equity holders decreases as the Debt/Capital ratio increases. This is because interest expense is an allowable expenses for the purposes of taxation. Therefore, it offers a tax shield benefit reducing the amount of taxes paid the CPK and consequently, its profitability.
Cost of Equity = Risk free rate + β (Market return – risk free ...

Executive Summary

This work has to be written consecutively and logically in order to consider and to take into account all features and decisions of the problems and to comprehend the overall situation. I intend to define the main problem of the case, its issues and describe it.
When the problems will be defined, and the description will be finished, I am going to analyze the financial performance of the business using the financial data of the case. This part of the paper is the largest and has a very important meaning for decision-making. Financial and numerical data describes precisely the ...

NANOGENE TECHNOLOGIES INC.

Nanogene Technologies Inc. (NTI) has been studied thoroughly and in the reader’s opinion, the questions that the case poses are interesting. This reader has attempted to answer the same based on the case, and also as per the principles of Management Science especially in Human Resource Management, and Strategic business planning. (Case studies descriptive type-here-the case study introduction is the narrating of the story-I have done that in two lines as to what the study intends to do).You can find it in the internet if you google diff between essay and case study.
The company is ...

1. Background to the Acquisition
This proposed acquisition is between two firms, Congoleum Corporation (Abridged) and Prudential Insurance Company of America where by Congoleum is the targeted company and Prudential the acquiring one. The negotiations of the acquisition shall be handled by First Boston and Century Capital Corporation whereby the former is the lead negotiator while the latter shall one of the prospective equity participants. Congoleum is a highly diversified company with three products market segment; home furnishings, ship building and automotive and industrial distribution. The firm has an asset and revenue base of $323million and $576million respectively. In ...

Lenovo Group Limited is a multinational computer technology corporation that develops personal computers, servers and IT software. Amid the global dotcom bubble in the 2000s, Lenovo began to pump resources into sectors such as mobile phones, internet-related business and information technology services. The technology joy ride was short-lived as competition at home grew ferociously with the mainland's entry into the World Trade Organization, eating into Lenovo’s bottom line. After this ill-fated strategy of diversification and a focus on the domestic market between 2001 and 2003, Lenovo chairman Yang Yuanqing said in an interview with the South China Morning ...

The Sorbet Group has enjoyed much success in the South African beauty business. This has been brought about by effective human resource practices coupled with excellent customer relations. Given the kind of expansion that the group is undergoing especially in franchising, there are questions about whether the company will maintain the same level of customer service and brand awareness.
What is Sorbet’s brand positioning? How would you describe the brand’s personality? How does Sorbet communicate its positioning and personality?
Brand positioning is an essential element for the success of any given business. It refers to the specific ...

The Sorbet Group has enjoyed much success in the South African beauty business. This has been brought about by effective human resource practices coupled with excellent customer relations. Given the kind of expansion that the group is undergoing especially in franchising, there are questions about whether the company will maintain the same level of customer service and brand awareness.
What is Sorbet’s brand positioning? How would you describe the brand’s personality? How does Sorbet communicate its positioning and personality?
Brand positioning is an essential element for the success of any given business. It refers to the specific ...

Situation Analysis

Industry
Mountain Man Lager had maintained a better market share as recent study highlights that the West Virginia audience rated the company’s core brand Mountain Man Lager, as the regions best-known beer, with an independently audited 67% response rate from the category of adult population of the state.
The main domestic producers like the Anheuser-Busch, Adolf Coors Company, and Miller Brewing Company have collectively produced the industry’s 74% of the beer shipments in the locations of Mountain Man in 2005.
On the other hand, the second-tier domestic producer like Genessee and Pabst Brewing Company produced between fifteen ...

Individual Case Complete: Bank of America

Executive summary
Mission and Vision Evaluation: The Company has maintained a plausible vision and mission statement that focuses on ensuring that it develops customer centric financial products and services that are innovatively based. Thus, through the company vision and mission statement, it has managed to ensure growth and market capture.
Milestones: Among the most fundamental milestones, the organization has sustained a top position in the banking industry despite the prospect of financial crisis across US. The plausible performance has been as a result of effective policy statement that is centered on operational Excellency. With millions of customers across US, the ...

Introduction:

Our analysis of a company listed on US Stock Exchange is based on Starbucks Corporation, while for the purpose of comparison with the competitor within same industry, we shall be analyzing financial statements of Dunkin Donuts.

Starbucks Corporation is a leading marketer and retailer of coffee, having its outlets in 60 countries around the world. The stock of the company is listed on NASDAQ Stock Exchange with the tick symbol of ‘’SBUX’’. Apart from selling coffee, the company is also involved in tea, beverages and variety of fresh food items. Today, Starbucks is a leading and most recognized coffee brand in the ...

Introduction. 3

Question 1 3
Question 2. 8
Question 3. 9
Question 4..10
Question 5..10

Question 612

Introduction
Thunder Electronic Company is one of the players in the electronics industry. The strength of any company within the industry that it operates is determined by its financial position. The basic aim of any venture or business is to make or increase its profits. There are several financial ratios that are used in determining a company’s financial position.

Question 1

Liquidity ratios gauge a company’s ability to convert its short term assets into cash. Liquidity ratios for TEC Company are moderately poor ...

Apple Incorporation is a company that was established in California in 1977 and which consists of wholly owned subsidiaries that manufacture, design and market a number of products which include iPad, iPhone, Mac, iPod and various software applications for both consumers and professional applications (Annual Report, 2011). The company caters to a number of consumers which include small and mid-sized businesses, Government, education and enterprises. The fiscal year of Apple consists of either 52 or 53 week period and it ends on last Saturday of every September.
The business strategy that the company has chosen for itself is providing the best ...

NanoGene Technologies, Inc. is a young start-up company established to specialize in the manufacture of nanotech solutions for medical purposes. The company is currently composed of five founders and top-notch scientists from Eastern Institute of Technology’s (EIT) Advanced Materials Sciences Lab (AMSL), namely Will Tompkins (currently serving as CEO), Don Rupert, Mark Masterson, Ravi Rhoota and Gary Garfield. The company is currently in the process of raising US$10 million in equity through Venture Capital (VC) funding. The company is also in discussions with Paige Miller, a business consultant with considerable experience in biotechnology operations and management. As it is ...

A) Cost of Equity Calculation:

= Risk free rate+ Beta(market risk premium)
= 2.24+0.57(6.2)
= 5.78%

Calculative Notes:

a) Risk Free Rate:

30-year US treasury rate: 2.24%

b) Equity Risk Premium:

Duff and phelps equity risk premium: 6.2%

c) Beta: 0.57

B) Cost of Debt: 2.72%

For the purpose of calculation of cost of debt, we have assumed average of yield to maturity of existing bonds of the company.
c) Equity and Debt Weights:
D) Cost of Capital-On Book Value basis

E) Cost of Capital-On Market Value basis

Important to note, cost of capital based on market value is the most appropriate as it represents the appropriate risk involved within the company’s capital structure.

G) Equity and Asset Beta

Beta (asset) = Beta (equity) / [1+ [(1-t)*D/E]]
The above table indicates that amongst all ...

About the report

The objective of this report is to assist One-World Investment Consortium, who is planning to invest £150 million in Thomas Cook PLC, a British global travel company listed on the London Stock Exchange under the ticker sign of ‘TCG’. We duly understand the impact of our professional recommendation on Consortium’s final decision making related to investment, and therefore, we intend to be comprehensive in the approach our analysis.
As for the structure of this report, it will be a two-part report. In the first section of the report, we will evaluate the past 5 year(2007-2011) financial performance ...

Tools for Evaluating the Projects

Biz Systems Consultants Ltd is a firm that is set up by experienced persons. Now they are in consideration for the projects that have investment of 17, 00,000$ and three projects are mutually exclusive. In this report we will find out the ways and tools that can help the firm in accessing the feasibility of the project. There are different methods of accessing the feasibility of projects as well as many sources of finance but we will discuss here the three major sources of finance that are best suitable for the company (Bearse, 1993).
For the company Biz ...

Want Beverages strengths

Want Beverages is a beverage company based in Burlington, Ontario owned by Bill and Angela Moffat. Even though the company owners could clearly picture where they want their company to be in the next few years, they are not sure of the means of making it get there. Strengths are those attributes that will enable the firm to increase its sales to a level that will ensure success in achieving its long-term goals. The firm operates in a dynamic industry, which requires it to position itself to achieve a competitive edge over other competitors (Fredrick and Gary, 2011).

The Moffats have represented various ...

This paper is a financial report that gives an evaluation of AMD financial performance for 2008, 2009 and 2010. In the report are the analyses of the company’s financial performance using conventional financial indicators and financial ratio trends. The report also gives an evaluation of the stock performance of the company for the same period. Finally, there are recommendations of the possibility of High Technology Company entering into a long term contract with AMD.

AMD

AMD stands for Advanced Micro Devices. It is a company that sells and designs digital integrated circuits, abbreviated as ICs. The company’s products also include embedded ...

Yale University Investments Office: February 2011

David Swensen definition of efficient markets hypothesis: A financial market is (informationally) efficient when market prices reflect all available information about value. From the case study it can be said that Swensen believed in market timing in markets for stocks, bonds, private equity, real estates, oil and gas. Features of private equity markets that make market timing difficult are valuation, performance, regulation and the ongoing volatility and uncertainty in global markets. Based on the case analysis David Swensen would pick on option two that is a fund managed by energy industry experts with engineering undergraduate degrees from prominent state ...

Executive Summary

Marketing is an important business function that ensures a company remains competitive. Kingsford is an American brand that produces premium charcoal grilling products and one that enjoyed a steady growth of revenues in the 1980s. The company has relied on an experienced team of sales executives, consistency in marketing and sales actions, superior quality, and brand positioning for success. However, Kingsford’s main problem lies in the aspect of competition. The company has faced serious challenges in regard to the strategic decisions that were necessary to avert competition in relation to aspects such as pricing, advertising, promotion as well ...