Integrative Case 4: Eco Plastics Company This case focuses on determination of the cost of capital for a firm. The student determines the cost of individual sources of financing‚ including long-term debt‚ preferred stock‚ and common stock. The cost of debt is adjusted for Eco Plastics’ 40% tax bracket. The company is considering a new financial structure‚ with the replacement of preferred stock financing with debt financing. Additional use of debt increases the common stockholders’ required
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Eco Plastics Company Since its inception‚ Eco Plastics Company has been revolutionizing plastic and trying to do its part to save the environment. Eco’s founder‚ Marion Cosby‚ developed a biodegradable plastic that her company is marketing to manufacturing companies throughout the southeastern United States. After operating as a private company for six years‚ Eco went public in 2009 and is listed on the Nasdaq stock exchange. As the chief financial officer of a young company with lots of investment
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Solutions to Problems Note to instructor: In most problems involving the IRR calculation‚ a financial calculator has been used. P9-1. LG 1: Payback period Basic a. $42‚000 ÷ $7‚000 = 6 years b. The company should accept the project‚ since 6 < 8. P9-2. LG 1: Payback comparisons Intermediate a. Machine 1: $14‚000 ÷ $3‚000 = 4 years‚ 8 months Machine 2: $21‚000 ÷ $4‚000 = 5 years‚ 3 months b. Only Machine 1 has a payback faster than 5 years and is acceptable. c. The firm will accept the first
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Part One Preparing to Invest Part One Includes Chapter 1 Investment Environment Chapter 2 Markets and Transactions Chapter 3 Online Information and Investing Chapter 1 Investment Environment Outline Learning Goals I. Investments and the Investment Process A) Types of Investments 1. Securities or Property 2. Direct or Indirect 3. Debt‚ Equity‚ or Derivative Securities 4. Low or High Risk 5. Short or Long Term 6. Domestic or Foreign B) The Structure of the Investment Process
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ijokl Interest Rates and Required Returns As noted in Chapter 2‚ financial institutions and markets create the mechanism through which funds flow between savers (funds suppliers) and borrowers (funds demanders). All else being equal‚ savers would like to earn as much interest as possible‚ and borrowers would like to pay as little as possible. The interest rate prevailing in the market at any given time reflects the equilibrium between savers and borrowers. INTEREST RATE FUNDAMENTALS The
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Using Corn-Plastic as an Eco-Friendly Packaging Material Introduction: For the purpose of this project‚ I chose to use sheets of corn-plastic as a wrapper for Big Kahuna Burger. The wrapper would be by inches and less than a millimeter thick. The reason I chose sheets over boxes was because sheets can be stacked by the thousands making shipping more efficient and producing less material in land fills. The material of this wrapper is corn-plastic‚ or by it’s scientific name
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substances originating from living organisms‚ or artificial materials that are similar enough to plant and animal matter to be put to use by microorganisms ------------------------------------------------- ONE OPTION: BIODEGRADABLE Plastics Biodegradable plastic is plastic that has been treated to be easily broken down by microorganisms and return to nature. Many technologies exist today that allow for such treatment. Currently there are some synthetic polymers that can be broken down by microorganisms
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OCEAN PLASTICS POLLUTION: A GLOBAL TRAGEDY FOR OUR OCEANS AND SEA LIFE Plastic never goes away. And it’s increasingly finding its way into our oceans and onto our beaches. In the Los Angeles area alone‚ 10 metric tons of plastic fragments — like grocery bags‚ straws and soda bottles — are carried into the Pacific Ocean every day. Today billions of pounds of plastic can be found in swirling convergences making up about 40 percent of the world’s ocean surfaces. Plastics pollution has a direct and
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IMPORTANCE OF PLASTIC:- Plastics are a subset of materials known as Polymers. These are composed of large molecules formed by joining many smaller molecules together (monomers). Other kinds of polymers are fibres‚ elastomers‚ surface coating and biopolymers‚ such as cellulose‚ proteins and nucleic acids. Plastics owe their name to their ability to be shaped to form articles of practical value by various conversion and forming processes. These are some peculiar properties of plastics materials‚ which
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plastic-def. A plastic material is any of a wide range of synthetic or semi-synthetic organic solids that are moldable. Plastics are typically organic polymers of high molecular mass‚ but they often contain other substances. They are usually synthetic‚ most commonly derived from petrochemicals‚ but many are partially natural. Plastics Characteristics Plastics are made from fossil fuels--petroleum‚ natural gas‚ coal--‚ wood and some plant materials‚ air‚ water and sometimes other common materials
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