See the attached file. Demonstrate with calculations and financial data the questions below: The ADT Corporation (TYCO) 1. What are the operating risks of the company? 2. What is the financial risk of the company (the debt to total capitalization ratio)? 3. Does the company have any preferred stock? 4. What is the capi
Capital Structure Analysis - the liabilities and owner's equity for Campbell Industries is below. Accounts payable: $468,000 Notes payable: $258,000 Current liabilities: $726,000 Long-term debt: $1,101,000 Common equity: $4,654,000
Questions: 1. How can using more debt impact a firm's capital structure? 2. Discuss the trade-offs between incremental IPO proceeds and debt financing. 3. How would the company's balance sheet be impacted by debt financing rather than using cash? 4. How would the company's return on equity be impacted by utilizing more
Finance academics and theoreticians as well as practitioners are still debating the issue of the 'optimal capital structure'. The overall notion is that there exists an optimal financing package but that this 'package' is not the same for all companies. Theory focuses on the 'big issues' - the debt-equity issue - without goi
Describe, from a regulatory standpoint, the rise and fall of a biotech firm. It can be any firm, but preferably a US firm. In your description, give a brief history, describe the main product(s) and what ultimately led to the firms demise.
There are six key elements to consider when discussing organization structure considerations which are: - Work specialization - Departmentalization - Chain of command - Span of control - Centralization and decentralization - Formalization Can you pick one and discuss its significance within the context of your current
What is meant by capital structure? What metrics can be used to assess improvement or deterioration in the capital structure? How is risk influenced by the capital structure? What is the effect of increased or decreased risk in the capital structure?
A company's capital structure consists solely of debt and common equity. It can issue debt at rd=11%, and its common stock currently pays a $2.00 dividend per share (Do=$2.00). The stock's price is currently $24.75, its dividend is expected to grow at a constant rate of 7% per year, its tax rate is 35%, and it WACC is 13.95%. Ho
(EPS: Simple Capital Structure) On January 1, 2010, Bailey Industries had stock outstanding as follows: 6% cumulative preferred stock, $100 par value, issued and outstanding 10,000 shares $1,000,000 Common stock, $10 par value, issued and outstanding 200,000 shares $2,
As the environment change firms often need to change their strategies to adapt to, or exploit the new situation. To manage increased complexity and introduce appropriate controls for the new strategy they must often change their structure as well. The history of Cisco demonstrates that structure usually follows strategy; howev
The manager of R&D for a drug company said that only 5 percent of the company new products ever achieve market success. He also said the industry average is 10 percent and wondered how his organization might increase its success rate. If you were acting as a consultant, what advice would you give him concerning organization stru
Please help me with a breakdown of how this would be calculated: Rotek has a capital structure of $300,000 in equity and $300,000 in perpetual debt. The firm's cost of equity is 14% and its cost of debt is 9 percent. If the firm has an expected perpetual net operating income of $120,000 and a marginal tax rate of 40%, what is
The capital structure of a firm is a crucial decision that executives must make. In fact, the question that is highly related to the capital budgeting decision was discussed last week. That is after we have decided that a particular project is worth more than it costs we must determine how to finance its acquisition, either by
Explain the difference between capital structure, business risk, financial risk and reserve borrowing capacity.
The most famous financial market in the world is the New York Stock Exchange. What is the mission of the NYSE? Firms must pay a fee to list their shares for sale on the NYSE. What would be the fee for a firm with five million common shares outstanding?
Firm management is said to consider a number of factors when deciding its capital structure. These include: * The degree of operating risk * The availability of tax shelters provided by things other than debt, such as accelerated depreciation, investment tax credits and operating tax-loss carry-forwards. * The abil
Identify the advantages and disadvantages of an investment based on the capital structure of a firm.
See attached files. 1. Looking at Figures 7-3 (p. 254 of your text), select one of the organizational structures contained in the graph, and explain why it is located where it is relative to foreign product diversity and foreign sales as a percentage of total sales. 2. Looking at Exhibit 8.5 (p. 304 of your text), explain
Over the past few decades, the cost structure of manufacturing companies has shifted. In the early 1900s, direct material costs were substantial while fixed costs represented a small fraction of total manufacturing costs. However, the cost structure has reversed and now fixed costs make up the majority of total manufacturing costs. What caused this to happen? What would explain the drastic change in cost structure? Explain how making more products that can be sold in a period can increase a company's operating income. Should this tactic be used to increase operating income? Would this happen in service companies or only manufacturing companies? Explain.
Over the past few decades, the cost structure of manufacturing companies has shifted. In the early 1900s, direct material costs were substantial while fixed costs represented a small fraction of total manufacturing costs. However, the cost structure has reversed and now fixed costs make up the majority of total manufacturing cos
You have $4.6 million to get your venture off the ground and a year before you open your doors. As the tax research and planning expert, it is your task to ensure your company is set up to minimize your tax exposure. The business will be registered in the city and state in which you live. 1. Briefly describe your new business
See the attached file. Hax and Majluf's 1981 article, "Organizational Design: A Survey and an Approach and the common symptoms of inadequate organizational structure." Choose at least two of them and connecting them to the topics covered. For instance, if you chose (a) from page 445, how does motivation, leadership, etc.
1) Which one of the following is correct? -since the cost of debt is generally fixed, increasing the debt ratio tends to stabilize net income. ---When a company increases its debt ratio the costs of equity and debt both increase. Therefore the WACC must also increase. ----All else equal, an increase in the corporate tax rate
Which business structure would you choose if you were to set up your own CPA practice: a partnership, proprietorship, or corporation? Why? Explain what factors affect your decision. See Chapter 7 of Advanced Accounting.
From an employee perspective, what are the advantages and disadvantages of working in a matrix structure? Three limitations of transformational leadership.
10 short answer questions pertaining to the material from chapters 1-13 in the text book Organizational Behavior (5th Edition) by McShane, S. & Von Glinow, M. I can upload the chapters if needed. Please refer to the pdf file for the questions. From an employee perspective, what are the advantages and disadvantages of worki
Attached is the 2010 annual report for Petsmart, Inc. What can you say about the company's current capital structure mix in terms of % of debt, % of commons stock and % of preferred stock. What's the firm's future financing limitations ? What kind of strategy do you suggest for the firm to finance its future project? Any
Antitrust authorities at the Federal Trade Commission are reviewing your company's recent merger with a rival firm. The Federal Trade Commission is reviewing your company's recent merger with a rival firm. The FTC is concerned that the merger of two rival firms in the same market will increase market power. A hearing is scheduled for your company to present arguments that your firm has not increased its market power through this merger. Can you do this? How? What evidence might you bring to the hearing?
Antitrust authorities at the Federal Trade Commission are reviewing your company's recent merger with a rival firm. The Federal Trade Commission is reviewing your company's recent merger with a rival firm. The FTC is concerned that the merger of two rival firms in the same market will increase market power. A hearing is schedule
In February 2011, Nokia announced an internal reorganization and it was widely reported. Investors.nokia.com (2011) reported the press release about this change. Research this Nokia reorganization and answer the following Questions: Question 1: How would you describe Nokia's new organizational structure? Question 2: Does it
C14 P2 You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $30 million. If your research is unsuccessful, it will be worth nothing. To fund your research, you need to raise $2million. Investors are willing to provide you with $2 million in initial capital in ex
Need some assistance and guidance in answering the folowing two questions. Trying to define what is meant by functional structure, and describe how to use this functional structure to implement the cost leadership strategy. How does Wal-Mart's structure as it relates to its international business.
Triangle Enterprises has no debt but can borrow at 9 percent. The firm's WACC is currently 14.7 percent and there is no corporate tax. If the firm converts to 70 percent debt, what will its cost of equity be? a) 20.67 percent b) 22.95 percent c) 24.47 percent d) 26.39 percent e) 28.00 percent