Are the concerns and issues surrounding cash balance retirement plans justified? Explain your rationale.© BrainMass Inc. brainmass.com October 25, 2018, 8:12 am ad1c9bdddf
A cash balance pension plan, which is a type of hybrid plan, is a defined benefit plan that is similar to a defined contribution plan because the employee's promised future benefits are stated as an account balance. The account is hypothetical, meaning that each participant does not actually have an account, and is used to reflect the amount of benefits the individual has accrued. The account is made up of employer contributions that are a percentage of annual compensation, referred to as pay credit, and interest earned on those contributions, referred to as interest credits. Issues and concerns that have been controversial surrounding cash balance retirement plans include the negative effect of a plan conversion on older employees due to wear-away, the whipsaw effect that may occur when computing a lump-sum payment of benefits prior to normal retirement ...
The issues surrounding cash balance retirement plans justified.
Capital Structure Discussion
Guidelines for the answer ( 5.1 to 5.11 need to be answered taking into consideration the guidelines given below
1. A Contents page showing clearly the page number and /contents of each page of your project.
2. An executive summary showing the most important findings and research which was covered in the discussion.
3. An introduction to your topic and how you have carried out your research.
4. The discussion of your topic with -footnotes of all your source of research and websites that you have accessed.
5. A conclusion page which summarizes all your findings clearly referring to the topic.
6. A Bibliography showing all the books, websites, that you might have visited .
5. Topic and Research Analysis ( Question to be answered based on Financial statements attached )
5.1 ldentify any company in the listed on a Stock Exchange.
5.2 Go to the company's website and print out the Financial Statements for the last two years.
(Income Statements and Balance Sheet)
5.3 Analyze the Financial Report and include the following in your analysis:
5.4 Determine the composition of the Equity of the company (Common stock,
Preferred stock and Bonds issued by the company.
5.5 Calculate the average cost of Equity of the company.
5.6 Determine the Dividend policy of the company.
5.7 What is your opinion regarding the financial risk the company's
management is prepared to take.
If the company's management is prepared to take risk, does it reflect in the Return on Equity? think the management is not taking adequate financial risks by having the
optimum financial structure for optimum returns.
5.8 Assuming this company wish to expand their operations and become a
global player in their industry, how in your opinion must this company
finance its operations to achieve the lowest weighted cost of capital as well
as achieve maximum return on capital.
5.9 Did the company's shareholders become wealthier or poorer over the last
financial period as a result of the financial policy of the company?
5.10 Did the Debt position improve or worsen during the last financial
period. If the debts did increase, did the Return on Equity increase or
5.11 Write a paragraph (as part of your conclusion) of at least a typed?
page as your future predictions for this company based on your findings ,/
after you have made the above observations. Also recommend to the
Board of directors a future financial policy that the company