1. Why do think Larry Stone wants to estimate the firm’s hurdle rate? Is it justifiable to use the firm’s weighted average cost of capital as the divisional cost of capital? Please explain. (10% weighting) Answer The hurdle rate is the rate of return a firm has to offer finance providers to induce them to buy and hold financial security. (Arnold‚2007). This is also known as cost of capital or weighted average cost of capital. The returns offered by alternative securities with the same risk
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weighted average cost of capital (WACC) to be 8.3%. I find error in this calculation as a result of the following points of disagreement: a) Weighting of Capital Structure: Use of book values of capital rather than the market values b) Cost of Debt Calculation: Incorrect method for calculating debt c) Tax Rate: Use of a tax rate derived from the summation of state and statutory taxes instead of the firm’s marginal tax rate 2. Revised Calculation of WACC: WACC reflects the weighted average
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Master in Business Administration School of Business and Management Xavier University SEAFOOD AMERICA: CORPORATE RESPONSE TO AIDS Case #3 Dr. Alma Frances R. Hortelano MBA 111B Dynamics of Management CHRISTINE R. LAURENTE MBA 1 SEAFOOD AMERICA: CORPORATE RESPONSE TO AIDS CASE #3 I. Point of View: Case writer II. Statement of the Problem: What can Seafood Industry do for the company & its employees at the prevalence of HIV/AIDS?Predicaments threat on:
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Neptune Gourmet Seafood is facing a problem with oversupply for existing demand. It can either decrease supply to match demand or increase demand to match supply. I recommend the latter. I further recommend the way to increase demand is for Neptune to increase its marketing efforts in its existing markets and to penetrate other markets it currently is not in. The Competitive Environment Neptune is a 40-year-old‚ $820‚000‚000 company‚ specializing in quality shell and non-shell seafood in a $20 million
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Akimasa Marine and Allied Ind. Corp.We are seafood processor mainly tuna‚ swordfish‚ marlin and other species like tiger shrimp‚ snapper‚ grouper with -60C freezing facility. | Contact: Lory T.Yeh - Director | | City: Davao City | | Tel: (63-82) 295-8795 Fax: (082)295-1417 | | Skype: Get Skype Now! | | Email: akimasa.loryeh@gmail.com akimasayeh@gmail.com | | Alfincoles Enterprises. We are engaged in trading of Angel Wing (Diwal). Attached herewith is the picture
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Weird Seafood Each time we visit our town in Zamboanga Del Sur‚ I make it a point to try a variety of seafood of which we could eat fresh from the nearby beach. The mention seafood was literally terrible and I will them weird seafood. Weird in a since that it looks awful that no one can imagine that it could be eaten. I wasn’t not force to eat them neither enjoy my discomfort but I really wanted to since I grew up near the sea. 1. Wood worm (Tamilok)- The tamilok‚ a wood worm which tastes
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Introduction: Clearwater Seafoods (CS) is a seafood exporting firm based in Canada. The firm is suffering value declining from international trade due to the appreciation of Canadian dollars. Hence‚ the company’s value declined for 35% that fails to distribute dividends under income trust since 2002. The company has to hold a conference for shareholders to establish an appropriate strategy to address the value declining problem and change its unit holder’s pessimistic shareholding sentiment. This
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Weighted Average Cost of Capital Introduction and objectives This paper aims at describing a way to compute the Weighted Average Cost of Capital (WACC). This method is often used by company management to determine the economic feasibility of different projects and thus to compute the NPV of a specific project by discounting cash-flows. The WACC determines the return that the company should generate to satisfy its debt-holders. For the company‚ it consists in a tool for projects decision-making
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X. Weighted average cost of capital (WACC) The valuation of Abercrombie & Fitch Co. is based discounting future cash flows and economic profit‚ for that the weighted average cost of capital is needed. The WACC is the opportunity cost when investing in Abercrombie & Fitch Co. opposed to other investments with a similar risk. Investors want their return to excess the WACC before it can be considered a good investment; since people in general are risk averse‚ they want compensation for taking on risk
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The Cost of Capital Project: Internet Version {December 2009} By Wm R McDaniel‚ PhD Objective The assignment is to estimate the weighted average cost of capital (WACC) for an actual corporation as of the current time. Actual managers would need to know their company’s WACC as a starting datum to estimate the discount rate to use in the net present value analysis of new projects or of termination decisions. The student will later need to know the technique for application in some case
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