Exercise on Unit 2 – Theories of Capital Structure 1. Companies U & L are identical in all respect except that U is unlevered while L is levered. Company L has Rs. 20 Lacs of 8% debentures outstanding. Assume a. All MM assumptions are met b. Tax rate is 35% c. EBIT is Rs. 6 Lacs d. Equity capitalization rate of company U is 10% Find the following: a. Value of each firm according to MM approach b. Suppose Value of U is Rs. 25 Lacs and Value of L Rs. 35 Lacs. According
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OPTIMAL CAPITAL STRUCTURE The optimal capital structure for a company should be the mix of equity‚ debt and hybrid instruments that minimizes the overall cost of funding‚ i.e. it should minimize the company’s weighted average cost of capital. In practice‚ however‚ it is not possible to specify this optimal capital structure exactly‚ for any individual company. It clearly makes sense to obtain funds at the lowest possible cost. In the long run‚ debt is cheaper than equity. However‚ when a company’s
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Comments on the situation’s: Nike Incorporation world’s most successful sports supplementary company. The old name of Nike was Blue Ribbon Sports; it started its business through producing shoes to Japan. Nike has acquisition of all major sports company in the world using its relationship around the sports products and equipment’s. Nike having a high quality in product and creative ideas on sports materials by this it achieved in fast method of growing. Nike as a primary mass producer in shoes
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forward for thirty years. Today‚ four years after his death‚ the company is still growing steadily. Wal-Mart executives continue to rely on many of the traditional goals and philosophies that Sam’s legacy left behind‚ while simultaneously keeping one step ahead of the ever-changing technology and methods of today’s fast-paced business environment. The organization has faced‚ and is still facing‚ a significannot amount of controversy over several different issues; however‚ none of these have done much
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Discuss What Are The Most Important Factors Of Successful Organizations As a definition‚ critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual‚ department‚ or organization”. We keep on going through many sources in our professional life and find that there are potentially a confusing variety of definitions and uses of Critical Success Factors which determine successful performance
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Q. 1. What are legal formalism and legal instrumentalism? Why is Bourdieu critical of both? Using Epstein Boudreaux says Legal Formalism is premised on First principals and used as a means to constrain and civilize people. As per Epstein without the law‚ we would act like animals. Legal formalism is based on a set of rules based on the wisdom of the ages that are based on a long history of the values of a society that act as a civilizing force. Bourdieu has disagreed and feels that the law doesn’t
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I believe that most successful companies are those who create most revenues or most profitable. Ranking them by revenue for their respective fiscal years ended on or before March 31‚ 2013. That honor goes to oil giant Exxon Mobil‚ whose $44.9 billion profit was followed most closely by Apple‚ at $41.7 billion. While Exxon Mobil was last year’s profit king‚ it did not take in the most revenue last year. That company would be Royal Dutch Shell‚ which at $481.7 billion wins Global 500 list’s top
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Question 5: Evaluate the Put-Warrant/Convertible Bond proposal. Does it solve Intel’s capital structure dilemma? What arguments might be made in favor of it? Intel’s capital structure dilemma was that it was holding too much cash on hand. Eventually‚ there were three available strategies or alternatives that Intel could undertake in terms of cash disbursement policies. First‚ it could continue or expand its market-repurchase program. Secondly‚ Intel could declare dividends to its shareholders
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contained many successful advancements‚ but also some major setbacks. He used his knowledge to help the United States take a leap in technology and strategy. Some of his plans and ideas though were rather controversial. Evaluating the presidency of breakthroughs and setbacks makes many question if his run was successful. The major inventions and ideas that were produced from JFK have helped America in various ways‚ yet the setbacks may have caused some everlasting harm. Many successful breakthroughs
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Part 1 © Brian Ross‚ 1995 Introduction This is the second post promised analysing why Australia entered the Vietnam War. American readers should be warned that because it looks primarily at the domestic political scene in Australia at the time‚ it does as a consequence refer to characters and events which most of you will not be aware of. However‚ I have included a short preface‚ attempting to identify most of the major players and the themes which ran behind the scenes in Australian society
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