I. STATEMENT OF THE PROBLEM Star River Electronics is a CD-Rom manufacturing company based out of Singapore. Star River was founded as a joint venture between Starlight Electronics Ltd.‚ and an Asian venture-capital firm called New Era Partners. Star River became favorably recognized as a supplier of high-quality CD-ROMs as the industry grew quickly during the mid to late 1990s. New Chief Executive Officer Adeline Koh is tasked with navigating the CD-ROM manufacturing company through tough times
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Gordon 12228784 Star River Electronics Ltd. On July 5‚ 2001‚ Adeline Koh‚ the newly introduced CEO of Star River Electronics Ltd.‚ was assigned to make important financial decisions that would affect the firms’ financial future. Earlier in the week‚ Star River’s President and former CEO abruptly resigned‚ admit financial allegations. On the first day of her new job‚ Koh‚ met with her assistant to begin discussing the most pressing issues for the firm. Star Rivers Electronics was originally
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STATEMENT OF THE PROBLEM Star River Electronics Ltd. is a large manufacturer and supplier of CD-ROMS. It was founded as a joint venture between New Era Partners and Starlight Electronics Ltd. It has enjoyed a great deal of success in the past decade‚ due in large part to their excellent reputation. Star River does need to address several issues with the recent resignation of their former CEO. Digital Video Disks are expected to cut into the CD-ROM market in the very near future‚ and with only 5%
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Problem Statement Star River Electronics‚ a Singapore based company‚ is a large manufacturer and supplier of CD-ROMS. It was founded as a joint venture between New Era Partners and Star Light Electronics Ltd. In the past decade‚ Star River has been very successful due its excellent reputation for producing high quality discs. In 1999‚ CD ROM disc drives comprised ninety three percent off all optical disc shipments. This created a high demand and allowed for manufacturing companies of all sizes to
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Florida Atlantic University Star River Electronics Ltd. – Case Analysis Case Summary Star River Electronics is a joint venture company that has gained respect within the industry for producing high quality CD-ROMs to major software companies. In the mid 1990s‚ multimedia products created a high demand for CD-ROMs‚ allowing manufacturing companies of all sizes to enter the market. As a result‚ an oversupply ensued causing prices to decline as much as 40%. Star River survived a period of consolidation
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Case Overview: Star River Electronics Ltd. Star River Electronics Ltd. is a large manufacturer and supplier of CD-ROMS based in Singapore. It was founded as a joint venture between an Asian venture capital firm‚ New Era Partners and Starlight Electronics Ltd‚ UK. It has enjoyed a great deal of success in the past‚ due in large part to their excellent reputation for producing high-quality discs. But due to recent emerge of Digital Video Disks (DVDs) Star River Electronics does need to face
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Star River Electronics Ltd. Team 5 Charlie Small William Rhodes Stephanie DesJardins Jonathan Thomas May 1‚ 2011 005600 20101231 2010 175 HERTZ GLOBAL HOLDINGS INC HTZ 12 17332.2210 2114.8210 0.0000 2114.8210 5067.5000 6238.9290 005600 20111231 2011 175 HERTZ GLOBAL HOLDINGS INC HTZ 12 17673.5270 2234.6560 0.0000 2234.6560 4363.5000 6953.5900 011641 19990930 1999 175 XTRA CORP XTR. 9 1573.0000 337.0000 0.0000 337.0000 94.0000
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than the cost of capital. The cost of capital is the rate of return that capital could be expected to earn in an alternative investment of equivalent risk. If a project is of similar risk to a company’s average business activities it is reasonable to use the company’s average cost of capital as a basis for the evaluation. A company’s securities typically include both debt and equity‚ one must therefore calculate both the cost of debt and the cost of equity to determine a company’s cost of capital
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Cost of debt When individuals use the cost of debt‚ they should know the measurement of the interest rate‚ or the yield paid to the bondholders. When analyzing the cost of debt‚ people should know that it ’s an effective rate that businesses are willing to pay on the current debt that they have accrued. The cost of debt is a measurement of the before or after tax returns. Considering the case that individuals can deduct the interest‚ makes the tax after cost more popular than the before tax. A business
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Cost of Debt and Cost of Equity: Cost of Debt is the interest rate and the Cost of Equity is the expected rate of return demanded by investors in the firm’s common stock. The issue at hand is finding the correct costs of debt and equity in order to find an accurate calculation of WACC. Cohen used the 20-year yield on U.S. Treasuries as the risk free rate‚ which we found to be the correct figure given that Nike Inc. debt was valued over 25 years. Because there is no other given yield that is comparable
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