CHAPTER 13 CAPITAL STRUCTURE AND LEVERAGE (Difficulty: E = Easy‚ M = Medium‚ and T = Tough) Multiple Choice: Conceptual Easy: Business risk Answer: c Diff: E [i]. A decrease in the debt ratio will generally have no effect on . a. Financial risk. b. Total risk. c. Business risk. d. Market risk. e. None of the above is correct. (It will affect each type of risk above.) Business risk Answer: d Diff: E [ii]. Business risk
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The Oreo bicycle campaign in China was the idea of local managers‚ which Rosenfeld characterized as "a stroke of genius that only could have come from local managers." She stated that local managers’ opportunities to address local conditions will be "a source of competitive advantage" for Kraft. Do you agree? I believe that Rosenfeld’s primary goal in making these statements were aimed at strengthening her strategic thrust of enabling local responsiveness by strengthening Kraft’s values of supporting
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What is the weighted average cost of capital (WACC) for Marriott Corporation? WACC = (1 - τ)rD(D/V) + rE(E/V) D = market value of debt E = market value of equity V = value of the firm = D + E rD = pretax cost of debt rE = after tax cost of debt τ = tax rate = 175.9/398.9 = 44% Cost of Equity Target debt ratio is 60%; actual is 41% [Exhibit 1] βs = 1.11 βu = βs / (1 + (1 – τ) D/E) = 1.11/(1 + (1 – .44) (.41)) = 0.80 Using the target debt ratio of 60%: βTs = βu (1 + (1 – τ) D/E)
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------------------------------------------------- Chapter 15 Capital Structure Decisions ------------------------------------------------- ANSWERS TO END-OF-CHAPTER QUESTIONS 15-1 a. Capital structure is the manner in which a firm’s assets are financed; that is‚ the right-hand side of the balance sheet. Capital structure is normally expressed as the percentage of each type of capital used by the firm--debt‚ preferred stock‚ and common equity. Business risk is the risk
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V.I.1.a Basic Definitions and Theorems about ARIMA models First we define some important concepts. A stochastic process (c.q. probabilistic process) is defined by a T-dimensional distribution function. Time Series Analysis - ARIMA models - Basic Definitions and Theorems about ARIMA models marginal distribution function of a time series (V.I.1-1) Before analyzing the structure of a time series model one must make sure that the time series are stationary with respect to the variance and with respect
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Introduction to Management Science‚ 10e (Taylor) Chapter 7 Network Flow Models 1) A network is an arrangement of paths connected at various points through which items move. Answer: TRUE Diff: 1 Page Ref: 281 Main Heading: Network Components Key words: network flow models 2) Networks are popular because they provide a picture of a system and because a large number of systems can be easily modeled as networks. Answer: TRUE Diff: 1 Page Ref: 281 Main Heading: Network Components
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Managerial Decision Modeling w/ Spreadsheets‚ 3e (Balakrishnan/Render/Stair) Chapter 5 Transportation‚ Assignment‚ and Network Models 5.1 Chapter Questions 1) Which of the following is NOT a network flow model? A) Transportation model B) Assignment model C) Product mix model D) Shortest-path model E) Minimal-spanning tree model Answer: C Page Ref: 162 Topic: Introduction Difficulty: Easy 2) Which of the following models determines the path through the network that connects all the points
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Sophomores‚ good day! I want you to create flowcharts for the following problems. You may have realized now how to create a correct‚ accurate and acceptable solution. Put them in short bond paper with the format given by Mam Jenny Lou. You need to pass your work on our first meeting next week (Sep 15-19). Work your own. 1. Given two numbers X and Y. Draw a flowchart to determine the difference between X and Y. If X – Y is negative‚ compute R = 2X + 2Y; if X – Y is zero‚ compute R = X + Y; and
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I. Company Background Southwestern University (SWU) is located in Stephenville‚ Texas. They have recently hired a new well-known football coach and because of this‚ they are expecting an increase in their fan base for this sport. Their season ticket sales have gone up‚ meaning more revenues‚ however‚ this also means increase in customer complaints due to traffic problems whenever there’s a game. Dr. Marty Starr‚ SWU’s president‚ has asked University Planning Committee to see how they can solve
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marketing theorem: Successful brands are built on successful products. The belief is that without great products‚ great brands could neither not exist nor withstand the competitive market. In a short paper‚ answer the following questions pertaining to the theorem. •Do you agree or disagree (partially or completely) with the theorem that successful brands are built on successful products? Why or why not? •Provide examples of brands and their products that a) prove the theorem and b) disprove
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