Chapter 12 Capital Structure and Leverage LEARNING OBJECTIVES After reading this chapter‚ students should be able to: • Explain why capital structure policy involves a trade-off between risk and return‚ and list the four primary factors that influence capital structure decisions. • Distinguish between a firm’s business risk and its financial risk. • Explain how operating leverage contributes to a firm’s business risk and conduct a breakeven analysis‚ complete with
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Apple Inc. in 2012 1. What‚ historically‚ have been Apple’s competitive advantages? First competitive advantage of Apple is high margin. In Exhibit 5 you can compare the percentage of gross margins and R&D/Sales of three major PC manufacturers. The percentage of gross margin of apple is the highest among the three from 2006 while there is no big difference in R&D/Sales. This implies that the manufacturing process of Apple is more efficient than those of other companies and that consumers are willing
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an organization chart ORGANIZATION STRUCTURE Is the basic framework within which the manager and his subordinates operate. ORGANIZATION CHART The purpose of organization chart: 1. To indicate to each employees area of responsibility and whom each reports. 2. To coordinate the division of work and to make those division clear. 3. To show work to be done. 4. To indicate line of promotion. 5 major aspect of an organization’s structure illustrated by the organization chart:
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Influence of Capital Structure on Leverage of Cement Sector in Pakistan CONTACT NUMBERS: ACKNOWLEDGEMENT First of all we would like to thank Allah Almighty for granting us the capability and courage to work on this report with my best efforts‚ and for the patience and perseverance endowed by Him. We would also like to thank Mr. H. JAMAL ZUBAIRI for giving us the chance to work on this report and for his guidance‚ advice and examples during regular sessions which
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Apple Inc. (Apple) Apple’s leadership interlocked with innovative technologies would be hereby analyzed‚ synthesized and possibly eviscerated for scholastic continuous learners. Apple inventively used technological situational happenstances (TSHs) to risk sales of its existing line of products by introducing new innovative products to the market. These new innovative lines of products’ have disrupted the existing technology internally‚ externally and globally. That‚ even if internally Apple
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Whether “Apple Computer” or “Apple Inc”‚ the company’s competitive advantage has historically always been innovation mixed with secrecy. Their superiority arises from being the first and furtive. They broke new ground with the first usable “personal computing devices”. They created a Mac OS and refused to license it out. They changed the way we listen to music‚ the iPod‚ and what we want our cell phone to do‚ iPhone. Job’s theory was to tell people what they want and this idea made Apple a leader
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Apple and Dell 1. Explain how each business differentiates itself. 2. Evaluate the benefits to apple of differentiating itself from its competitors. Apple Inc. and Dell Inc. are both regarded as reputable‚ distinguished businesses. They both provide products and services which are associated with consumer electronics‚ computer software and/or hardware‚ and general‚ personal computing devices. This means that both companies produce products which are sold within the same market. However‚ even though
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Apple Inc. 2010 Apple’s Competitive Advantages Apple was the first company that launched computers for personal use but by 2010 the company viewed itself as mobile device company. The competitive advantages for Apple throughout history have been ease of use‚ industrial design and technical elegance. Apple designed its products from scratch using chips‚ disk drives and monitors. For instance the iMac that came out in august 1998 was available to buy with colorful translucent cases with an eggshell
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major theories on capital structure: By way of a conventional start‚ perhaps it would be worth our while to look at what "capital structure" actually means. In broad terms‚ it is essentially the firms ’ mix of debt and equity but it would be wrong to assume that this is all there is to it. These two terms belie the complexity that lies beneath‚ from the viewpoint of the decisions that any firm must take - that is to say‚ what kind of debt and which type of equity. Capital structuring would then
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D61/81594/2012 AGENGA BENTER ARWA D61/81595/2012 Section 1 1. Determine the drivers of capital Structure. The primary factors that influence a company’s capital-structure decision are: Company size Big firms are likely to be more leveraged than small firms. This is due to the huge capital assets that they posses Management style Management style ranges from aggressive to conservative. Conservative management is less inclined to use
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