CHAPTER 9 PROBLEMS 2. Anle Corporation has a current price of $20‚ is expected to pay a dividend of $1 in one year‚ and its expected price right after paying that dividend is $22. a. What is Anle’s expected dividend yield? Dividend Yield = Div1 / P0 = =1/20 = 5.0% b. What is Anle’s expected capital gain rate? Capital Gain = (P1 ‐ P0) / P0 = (22 ‐ 20 ) / 20 = 10.0% c. What is Anle’s equity cost of capital? Equity Cost of Capital = Div1/P0 + (P1 ‐ P0) / P0 = 15.0% 7. Dorpac Corporation has a dividend yield of 1
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Electronics Corporation About company -Since its founding in 1950 by Thomas Merton‚ Merton Electronics had been a distributor for GEC‚ a large manufacturer of electrical and electronics products for consumer and institutional market. -Over the years‚ in addition to the GEC products‚ the company had added noncompeting lines of electrical appliances‚ records‚ compact discs‚ and cassettes. -Four years later‚ it entered into an exclusive import agreement with the Goldstone Corporation of Taiwan‚
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The profitability ratio of First Farm Corporation (FFC) shows that the Net Profit Margin of the company improved due to the increasing Net Sales and Net Income in the year 1995. The said improvement is due to the increasing sales in the chicken and feeds business as oppose to the fair increase in the cost of goods and operating expenses. Also‚ this improvement can be directed to the launching of the new line of extruded aquaculture feeds and the company’s entry to the fast food business. Return
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Questions 1. If Symonds Electronics Inc. were to raise all of the required capital by issuing debt‚ what would the impact be on the firm’s shareholders? The impact on shareholders can be analyzed by calculating the EPS and ROE of the firm under the alternative scenarios as follows: All Debt With $5‚000‚000 Expansion Current Growth in Revenues Revenues EBIT Interest EBT EBT*(1-T) # of shares EPS Debt Equity Debt/Equity Ratio Return on Equity 15‚000‚000 2‚250‚000 0 2‚250‚000 1‚350‚000 1‚000‚000 1.35
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I. Point of View This group takes the point of view of Mr. Ricardo Sarmiento‚ Vice President for Finance of First Farms Corporation (FFC for brevity). Mr. Sarmiento will present to the Board the financial performance and financial position of the company from 1993 to 1995. In the process‚ he will also make recommendations as to the feasibility of the proposed expansion. II. Case Context In 1995‚ FFC raised P1.1 billion from its initial public offering. P500 million of the proceeds was used as working
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The limited menu allowed them to concentrate on quality and customer service. Kroc had the idea to take the Speedee Service concept and open restaurants nationwide. In 1955‚ partnering with the McDonald Brothers‚ Kroc founded the McDonald’s Corporation and opened the first franchise in Des Plaines‚ Illinois. In 1961 he bought the exclusive rights to the McDonald’s name for 2.7 million dollars. (http://www.mcspotlight.org) Hamburger University‚ the McDonald’s training center in Elk Grove‚
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Finance for development - principles Paper 8314 The structure of property finance | Project Finance | Corporate Finance | | Equity | Debt | Equity | Debt | Development finance | Forward funding Joint venture Partnership Lease and leaseback | Bank project finance Forward sale bridging finance Mezzanine finance | Developer’s funds Share issue | Multi-option funding Convertible loans Commercial paper Deep discount bond (DDB) | Investment finance | Forward sale Forward funding
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the failures of Newell Company by the lack of due diligence and decision making by the executive staff. Figure 1 "Using a single or dominant business corporate level strategy may be preferable to seeking a more diversified strategy‚ unless a corporation can develop economies of scope or financial economies between businesses‚ or unless it can obtain market power through additional levels of diversification. These economies and market power are the main sources of value creation when the firm diversifies
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[pic] By: Michael Malone Statement of the Problem Rajat Singh‚ a managing director at Hudson Bancorp‚ needs to find a way to rejuvenate the paper check corporation. One main part that needs to be calculated is the appropriate mixture of debt and equity for the firm. The company needs to determine the correct mixture so that they can both minimize the cost of capital and increase the shareholders value. I will analyze the current and future situation of the company‚ trying to find the correct
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MEMORANDUM TO: Richard Sullivan FROM: SUBJECT: Wriston Manufacturing Corporation DATE: June 9‚ 2011 Wriston Manufacturing Corporation (WMC) is faced with a Detroit plant that is no longer viable because of underinvestment‚ labour issues‚ and product-process mismatch. This has lead to low sales figures‚ low return‚ and high burden rates (as calculated by the company). The issues at the Detroit plant will be reviewed and options will be presented. A recommendation to address the Detroit
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