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?
(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 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.
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
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.
Kline Construction is an all-equity firm that has projected perpetual earnings before interest and taxes of $879,000. The current cost of equity is 18.3 percent and the tax rate is 34 percent. The company is in the process of issuing $6.2 million of 8.5 percent annual coupon bonds at par. What is the levered value of the firm?
Please help with the following problem. I am working on creating a fictional internet based company, called Jellies and Jams. The company will sell homemade jams and jellies via their website. I am making the company a small, family owned business, with 15 employees. I need assistance with setting up the company's organizati
16.1 Shapland Inc. has fixed operating costs of $500,000 and variable costs of $50 per unit. If it sells the product for $75 per unit, what is the break-even quantity? 16.2 Counts Accounting has a beta of 1.15. The tax rate is 40% and Counts is financed with 20% debt. What is Counts's unlevered beta? 16.3 Ethier Enterprise
How does the capital structure of a firm compare to the capital structure of an individual? In what ways are they similar? Can you provide an example of how individuals use debt and equity in their personal financial lives that parallels the basic capital structure decisions made by a firm?
A. suppose taco bells equity is currently selling for $55 per share, with 4 million shares outstanding. Firm also has 7000 bonds outstanding, which are selling at 94 percent of par, what are the firms current capital structure weights? b. suppose that taco Bell was considering an active change to their capital structure so
Suppose that Lil John Industries' equity is currently selling for $37 per share and that there are 2 million shares outstanding. If the firm also has 50 thousand bonds outstanding, which are selling at 103 percent of par, what are the firm's current capital structure weights?
Which of the following is true regarding the efficient market hypothesis? It argues that efficient markets are not volatile throughout a trading day. It suggests that an efficient market can only consider historical information when determining current security prices. It proves that market inefficiencies do not exist in either the short-run or the long-run. It implies that all investments in an efficient market have a net present value of zero. Which of the following statements is true regarding systematic risk? Select all that apply: is diversifiable is the total risk associated with surprise events it is not project or firm specific is measured by beta
The historical returns on large-company stocks, as reported by Ibbotson and Sinquefield, are based on: the largest 20 percent of the stocks traded on the NYSE. the stocks of the largest 10 percent of the publicly traded firms in the U.S. all of the stocks listed on the NYSE. the stocks o
Answer the questions below: please provide thorough, qualitative answers including some examples. 1. In practice, how can a firm determine whether it is operating at (or near) its optimal capital structure? 2. Under what circumstances should a firm use: a) more debt in its capital structure than is used by the "average
How can the structure of your company impact reaction speed in response to the customer? Suggest a modification to the structure that will remedy the impact of structure on responsiveness.
Details: Consider the following scenario and respond to the questions that follow. A new firm, Bit Technology Inc., is deciding where to locate its facilities internationally. 1. If this firm is a high-tech manufacturing firm, what resource and operational factors should be considered in this decision? 2. How might the organization's identity influence its structure? 3. Explain the legal factors that must be considered when a company decides to locate its operations in a foreign country.
Details: Consider the following scenario and respond to the questions that follow. A new firm, Bit Technology Inc., is deciding where to locate its facilities internationally. 1. If this firm is a high-tech manufacturing firm, what resource and operational factors should be considered in this decision? 2. How might t
Using your knowledge about the determinants of an optimal capital structure, discuss the choice of capital structure of the three companies: Anheuser Busch, Cisco and Disney (attached are their Balance Sheet Ratios). To keep your work focused on the problem, please consider the following topics: Capital structure: relativ
Please help me with this. The background readings of this Module provide plenty of information regarding both the issue of the capital structure decision and the concept of the weighted average cost of capital. Using Ford, Disney, and Electronic Arts, discuss the business nature of each. What are each of the company's beta
Explain the principal differences between a functional structure and a multidivisional structure? What are the contributing factors that motivate companies to change from a functional to multidivisional structure? Define the function of integrating roles in the organization and how integration factors shape the process. a