Introduction Cooper industry‚ H.K. Porter Company and VLN Corporation are entangled in a battle over the takeover of Nicholson File Company. Both H.K. Porter Company and VLN Corporation have already made their offers to the Nicholson File Company shareholders and now the management of Cooper Industry have to decide whether to jump into the foray for the control of Nicholson File Company or not. The major issues faced by the management of Cooper Industry are as following: 1.Is Nicholson File Company
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leverage is linked with capital structure? Take example of a MNC and analyse. b. The following figures relate to two companies (10) P LTD. Q LTD. (In Rs. Lakhs) Sales 500 1‚000 Variable costs 200 300 ---- ------- Contribution 300 700 Fixed costs 150 400 ---- ------- 150. 300 Interest 50 100 ---- ------- Profit before Tax 100 200 ---- -------
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Determine the Weighted Average Cost of Capital (WACC) based on using retained earnings in the capital structure. In order to find the WACC‚ we need to find the cost of the components of the capital structure and their proportion in the total capital. Cost of Debt – To find the cost of debt‚ we use the details of the bonds issued by Rollins Instruments. The bonds have 20 years to maturity‚ pay interest at 9.3%‚ have a par value of $1‚000 and are currently selling for $890. The cost of debt is the
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Pharmaceutical Industry The pharmaceutical industry includes companies that research‚ develop‚ market or distribute generic and branded drugs. The industry expanded during the 1980’s and drugs to treat heart disease and AIDS were prominent. Consumer demand for nutritional supplements and alternative medicine increased during the 1990’s with the Internet facilitating direct purchases of drugs. Advertising for direct consumption of pharmaceutical drugs became more prominent; pharmaceutical companies
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growth rates. During the period‚ the net income of Walgreens grew at 14 percent per year‚ while Wrigley’s net income grew at 10 percent per year. Even though Walgreens was one of the fastest-growing companies in the United States during this time‚ its average annual shareholder returns were 16 percent‚ compared with 17 percent for the significantly slower-growing Wrigley. The reason Wrigley could create slightly more value than Walgreens despite 40 percent slower growth was that it earned a 28 percent
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Return on Capital Employed Review of the NZ Listed Sector May 2012 Return on Capital Employed Contents 1. Opening Comment 2. Executive Summary 3. Return on Capital Employed Explained 4. Discussion of Results 5. Background on Armillary Private Capital 6. Sources of Data Appendix 1 – Detailed Results 2 3 5 12 23 23 24 2012 Disclaimer The information contained in this report has been prepared by Armillary Private Capital (’Armillary’). While the intention is to provide accurate information
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Telecommunication Services division‚ it primarily provided many kinds of phone service to business and residential customers. In fact‚ it performed a network for 7 million customer lines throughout Southwest and Midwest. The division archived an increasing average rate of 3% on revenue from 2000 to 2004. On the other hand‚ the Products and Systems division was in charge of manufacturing equipment for computing and telecommunication purpose. In 2000‚ Teletech’s managers developed a plan to apply computing technology
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repurchase. Both methods are analyzed in regards to an optimal capital structure and maximizing share holder value (value of the firm). A compilation of historical data and future predictions were used for the basis of this report‚ and recommendations. Literature Review The following paper will draw on Modigliani and Miller’s (1958) theorem of capital structure to determine whether an ‘optimal’ level for Wrigley’s can in fact be reached. A further discussion of agency costs and incentives by
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include: 6) Boeing Corporation is a world leader in commercial aircraft. In the face of competition‚ Boeing often faces a critical decision: whether to develop a new generation of passenger aircraft. 7) A firm cannot simply adopt the industry average debt ratio‚ because differences exist among firms in any particular industry with respect to __________. 8) Studies show systematic differences in capital structures across industries. These are due mostly to differences in __________. 9) Studies
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showing that the shares were undervalued. Woolworths Limited’s intrinsic value was calculated using the same two methods and both also were calculated to be higher than the market price‚ also presenting that the shares are undervalued. The consumer industry is suitable for investors seeking constant dividends and the metal and mining industry is suitable for investors seeking above average returns. Although‚ a higher percentage should be invested in BHP Billiton Limited shares due to the industry demonstrating
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