Corporate Finance and Investment 1. Define “Working Capital” Working Capital=Current Assets-Current Liabilities =Accounts Receivable + Inventory - Accounts Payable “Working capital is how much in liquid assets that a company has on hand. Working capital is needed to pay for planned and unexpected expenses‚ meet the short-term obligations of the business‚ and to build the business.” 2. Give concrete measures how w.c. can be optimized (receivable‚ inventories (JIT
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Structuring the Research Paper Formal Research Structure For emphasis‚ the primary purposes for formal research are repeated here: • find and understand raw data and information • enter the discourse‚ or conversation‚ of other writers and scholars in your field • learn how others in your field use primary and secondary resources For the formal or primary academic research assignment‚ where you will take your place in the scholarly conversation‚ consider an organizational pattern typically used
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WORKING CAPITAL AND FIXED CAPITAL AND ITS ADVANTAGES Introduction: A firm requires funds to acquire two types of assets : fixed assets and current assets .Fixed assets include land biulding ‚ plant‚ and machinary ‚ vehicles ‚ equipment etc.These assets relatively permanent in nature and are necessary for carrying on the bussiness .Current assets ‚on the other hand ‚are kept for supporting day-to-day operations and keep changing during the course of the business.They liquidated within short period
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I will be the first to admit that there are people in this world that has done some pretty terrible things. Maybe to themselves or to other people! Even though those people may have no remorse over the things they have done us as human beings have to be the ones to say when enough is enough. The history of the death penalty is a long and brutal one. From the stoning and crucifixion killings of the B.C. era to today’s methods of the electric chair and lethal injection‚ governments of one kind or
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under the old fashioned premise that “cash is king‚ and debt is bad”. As of late their capital structure has become a big issue amongst investors. They are concerned that the current unlevered structure is not maximizing value and are wary of the risks associated with the companies large and growing cash balances. Currently BBBY is facing the issue of trying to decide wether their current capital structure is optimal moving into the future‚ and if not‚ what decisions they need to make to achieve
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Case Questions Case #5 – Marriott Corporation: The Cost of Capital 1. Are the four components of Marriott’s financial strategy consistent with its growth objective? 2. How does Marriott use its estimate of its cost of capital? Does this make sense? 3. What is the weighted average cost of capital for Marriott Corporation? a. What risk free rate and risk premium did you use to calculate the cost of equity? b. How did you measure Marriott’s cost of debt? 4. If Marriott used a single corporate
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Chapter 8 The Cost of Capital 236 CHAPTER 8—THE COST OF CAPITAL TRUE/FALSE 1. Capital refers to items on the right-hand side of a firm’s balance sheet. 2. The component costs of capital are market-determined variables in as much as they are based on investors’ required returns. 3. The cost of debt is equal to one minus the marginal tax rate multiplied by the coupon rate on outstanding debt. 4. The cost of issuing preferred stock by a corporation must be adjusted to an after-tax
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forms of financing are not cost equivalent in the presence of capital market imperfections‚ despite both being credit forms. The case presents two opposing anecdotes: one about a trading company that bought its office and profited hugely from this decision as the market and capital values move upwards‚ but then faced huge losses as the market declined; and another from a comparable trading company leasing office space‚ and applying its capital to grow the trading business without diversion. The Company
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A company’s capital structure is a very important component of a company’s financial health and longevity. The capital structure should maximize total net profit and overall shareholder wealth. An optimal proportion of equity and debt as a company’s capital structure is an indication of a well-managed and successful company and should be a goal for most corporations. Beverly Flax and Rick Rosenfield founded California Pizza Kitchen (CPK) in 1985 in Beverly Hills‚ California. It is a casual dining
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Cost of Capital Definition: cost of capital is the rate of return that a company must earn on its project investments to maintain its market value and attract funds. The cost of capital to a company is the minimum rate of return that is must earn on its investments in order to satisfy the various categories of investors‚ who have made investments in the form of shares ‚ debentures and loans. The cost of capital in operational terms refers to the discount rate that would be used in determining the
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