Being that Eskimo Pie is a small operation with fairly thin margins‚ they would not qualify for an A or AA bond rating. Thus‚ I am assuming that any bonds they have issued have a BB rating. The long-term bond yield for BB bonds is 11.44%. The case does not provide any information regarding the required return on equity. However‚ by imputing the data from Exhibit 8c into a spreadsheet we can calculate Beta for comparable companies. I calculate the Beta for Ben & Jerry’s to be 1.5994. I calculate
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acquire Mercury Athletic Footwear‚ the results of the financial analysis below indicate Active Gear should proceed with the acquisition. Based on the Free Cash Flow Method‚ considering the financial projections and assumptions for Mercury Athletic‚ indicate the acquisition has a positive net present value of $112‚778‚000 [Present Value of Future Cash Flows (59‚440‚000) + Terminal Value ($276‚921‚000) – Purchase Price ($223‚583‚000)]. There are also possible synergies that could make the project even more
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José A Valdés 3 de octubre de 2013 Sem. De Contabilidad Prof. Alejandro Méndez Case 11-1 Polluter Corp Facts of Case: Polluter Corp is an SEC registrant and manufacturer household cleaning products. In the course of operations‚ Polluter Corp emits emission pollutants; The Company receives emissions allowances‚ (EAs‚) from the government for 2010 to 2030. Polluter Corp will upgrade their production facilities in 2014 in order to reduce their pollutants. Emissions Allowance
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Introduction Cooper Industries was unsuccessful in acquisitions until it established a basic criteria for future acquisitions. That new criteria worked well‚ and when they went to acquire their fourth company since implementing their strategy‚ they faced fierce competition. They have to decide whether or not to pursue this company of interest‚ and then make an offer that will be selected over the others. Background Facts Cooper Industries is a manufacturer of heavy machinery. They began
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The farthest point costs for obtaining 5 stocks were set just about a month prior extending from 15% to half down‚ which appeared to be verging on difficult to achieve at the time. It demonstrates the level of my ability to purchase these stocks around then‚ yet today‚ I am not entirely certain in the event that I am willing to purchase them with the set costs. When I at long last had an opportunity to open up my investment fund‚ it was past the point of no return. It was verging on startling to
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CompuTech was founded by Marco Garibaldi in 1983. The founder developed a user-friendly word processing computer program‚ which received wide acceptance from both the academic and the business communities. A presentation package was developed by the company’s programmers‚ and the software also received wide market acceptance. However‚ Computech had a hard time when it decided to enter the financial spreadsheet market. Due to late entrance into the market‚ the company would face fierce competition
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free cash flow method. Free Cash Flow: The first step is getting the free cash flow for the next five years. The basic steps to get free cash flow is Net Income+Depreciation and Amortization-Changes in Net Working Capital-Capital Expenditure‚ but there are two extraordinary items 1.Undistributed earnings in unconsolidated subsidiaries: this will be there when income is earned but not distributed back to the parent company‚ it should be subtract from net earning because no real cash flow from
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Specifically they perform the following activities: a.) Loan Program Design b.) Loan Application Processing c.) Supervising Loan Servicing d.) Default Management Oversight e.) Securitization Process Oversight and Coordination Also‚ as noted in the case‚ First Marblehead is not a lender‚ guarantor or loan servicer‚ rather they receive fees from the services provided in connection with processing and facilitating the securitization process. 3. How does First Marblehead make money- be specific and
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stable cash flows. Fiscal year 1988 was solid‚ net sales increased by 13‚4% and the company had healthy operating margins. In the same period operating cash flow had a steady level of 9‚6% of net sales. ROE increased to 11‚6%‚ but was still below the target of 14-15%. Table 1 - Operating ratios 1986 1987 1988 1Q ´88 Net sales Growth na 4‚0% 13‚4% -0‚4% Operating income growth na 7‚0% 10‚3% 1‚7% Operating cash flow growth na 7‚2% 11‚2% Operating income margin 7‚7% 7‚9% 7‚7% Operating cash flow margin
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MEMORANDUM DATE: TO: FROM: SUBJECT: Aquarius – Pub Valuation Overview The Greens are looking to sell Aquarius Ales‚ their pub located in Austin Texas as they are looking to fully retire and take up golfing and quilt making. Recently they have received their first offer to buy the business which was $450‚000 from Marc Johnston and John Sheridan‚ two University of Texas graduates who miss the college scene. The Greens are seriously considering the offer but feel that it
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