Macadam case analysis by UCT group of MBA students Company overview: Macadams Bakery Supplies Holdings (Macadams) is a manufacturer of oven and other appliances for the baking industry. Their financial statements for 1996 highlight a very strong year. Turnover grew by 59% to R125.3m and profit increased by 81%. An acquisition of Livanos Brothers (February 1996) took place in response to the increased demand in the local market as well as an expansion of market base in foreign markets. Depreciation
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investigates the capital structure choices that firms make in their initial year of operation‚ using restricted-access data from the Kauffman Firm Survey. Contrary to many accounts of startup activity‚ the firms in our data rely heavily on external debt sources such as bank financing‚ and less extensively on friends and family-based funding sources. This fact is robust to numerous controls for
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new product line to generate cash inflows in the following five years. Another factor that plays into the decision-making is that notes payable will decrease after 2011. This allows Flash Memory to use its income from the new product line to pay off debt‚ which suggests that the new line will begin to generate a cash inflow in just two years. Flash was presented with two financing alternatives. One option was that they could acquire financing through a private sale of common stock. By issuing 300
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Tutorial 2 Business Structures Question 1 Advise Violet and Sonny regarding their liability to Friendly Bank in relation to the Busy Bee Florist Shop. Your answer must make reference to relevant provisions of the Partnership Act and precedents. Introduction In order to advise Violet and Sonny regarding their liability to Friendly Bank in relation to the Busy Bee Florist Shop‚ firstly it is necessary to examine whether a partnership relationship exists between (a) Violet and Busy Bee Florist
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Andrews 1 Alexandra Andrews Dr. Van Bergen-Rylander ENC 1101-00M 11 Sept. 2014 Is College Debt To Much Everyone who wants to go to college is often faced with the same fact‚ how will I pay? Students often go with the options of taking loans‚ after much consideration and research‚ research sometimes based on essays written by authors. Even though Carey and Wilson both address the debt college could put someone in. Wilson provides a more convincing argument due to the fact that he gives more
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equity value.) (ii) Investors may not be aware of the project at all‚ but they may believe instead that cash is required because of‚ say‚ low levels of operating cash flow. (iii) Investors may believe that the firm’s decision to issue equity rather than debt
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the early 1980s and the early 1990s‚ Proventus carried out almost 70 restructurings. In 2003‚ Daniel Sachs was appointed as CEO of Proventus. Since 2005‚ Proventus began to focus increasing on proving development capital to midsize companies through debt investments‚ such as public corporate companies bonds or leveraged loans‚ or private corporate loans. In September 2009‚ Proventus initialed a co-investment vehicle‚ Proventus Capital Partners (PCP). PCP began to invest in Corral bonds in the summer
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discounting the appropriate cash flows against the appropriate hurdle rates. Without knowing the cost of capital‚ Marriott would not be able to determine hurdle rates that would help Marriott’s growth. Also‚ knowing the cost of debt would allow Marriott to optimize the use of debt in the company’s capital structure. Knowing the hurdle rates on a divisional level would also enable Marriott to reward their managers using incentive compensation. By using hurdle rates‚ Marriott managers would be “more
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acquiring 25 new electric power generating plants‚ Moreover‚ at a cost of roughly $500‚000 per Megawatt (MW) for a BB rated company with total assets of only $1.7 billion and a debt-to-capitalization ratio of 79%‚ financing would not be easy. To get to 15‚000 MW in five years‚ they needed to raise at least $4.5 billion from debt and equity markets assuming Calpine generated $1.5 billion of cash from operations as projected. In the near term‚ however‚ they needed to finance four merchant plants with a
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Question 1: What is the problem in the case? The problem in the case deals with merger and acquisition. The buyer is Intercontinental Capital‚ Ltd.(ICL)‚and the target firm is Consolidated Supply S.S. (CSSA)‚ a leading global supplier of medical products to hospitals and a subsidiary of AtlantisMed Systems‚ a major manufacturer of medical products and suppliers in the United States. The problem arises when ICL asked Deutsche Bank Securities to arrange the financing and propose a deal structure that
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