Mini Cases: Cost of Capital Part A: Cost of Debt Mini Case 1: Cost of perpetual/Irredeemable debt Ashok Leyland issued Rs 100 Lakhs 12% debentures of Rs. 100 each. Calculate the cost of debt in each of the following cases. (Assume corporate tax rate being 40%). Case (a) If debentures are issued at par with no floatation cost. Case (b) If debentures are issued at par with 5% floatation cost. Case (c) If debentures are issued at 10% premium with 5% floatation cost. Case (d) If debentures are issued
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CEG GSB 703 Mini Case Assignment #1 Adam Ohanesian Email: Adam.Ohanesian@nichols.edu Table of Contents I. Intended roles of each of the institutions and intermediaries. a. Venture Capitalists b. Investment Bank Underwriters c. Sell-Side Analysts d. Buy-Side Analysts and Portfolio Managers e. Accounting Profession f. FASB II. Properly aligned incentives g. Venture Capitalists h. Investment Bank Underwriters i. Sell-Side Analysts
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The keys to the company’s future value and growth are profitability (ROE) and the reinvestment of retained earnings. Retained earnings are determined by dividend payout. The spreadsheet sets ROE at 15% for the five years from 2006 to 2010. If Reeby Sports will lose its competitive edge by 2011‚ then it cannot continue earning more than its 10% cost of capital. Therefore ROE is reduced to 10% starting in 2011. The payout ratio is set at .30 from 2006 onwards. Notice that the long-term growth rate
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In order to decide on an IPO price‚ we must look at the current financial position of the company‚ as well as make projections for possible future scenarios. From the data given‚ we know that Prairie Home Stores (PHS) has a current book value of $80‚000‚000. With 400‚000 outstanding shares‚ the book equity per share is $200. There are two possible paths for future performance to consider. The first‚ a constant growth scenario‚ assumes that PHS will continue on its current trajectory of paying
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Belmont Lodge Health Care Center is a nursing home located in Pueblo‚ Colorado. Belmont Lodge Health Care Center is a 120-bed facility. Belmont Lodge Health Care Center provides its services to long-term and short-term residents. Belmont Lodge Health Care Center provides assisted living and resident care facility to elderly residents. Belmont Lodge Health Care Center has been named on the Special Focus Facility (“SFF”) Initiative for five months as of April 2017. The Centers for Medicare & Medicaid
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INTRODUCTION As a part of the MBA programme‚ I have undertaken Project Work i.e.an Organizational Study of State Bank of Mysore‚ which I completed as per the requirements of the organization as well as project rules. This internship did enable me to understand the nuances of the service sector and get an on-hand experience of application of theoretical knowledge. In fact it gave me a look-through to gimmicks of the game and assured me of the fact that „Business is
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( Answers to Mini-Case Questions BioCom Inc. This mini-case provides a review of the methodology and rationale associated with the various capital budgeting evaluation methods such as payback period‚ discounted payback period‚ NPV‚ IRR‚ MIRR‚ and PI. 1. Compute the payback period for each project. |Time of Cash Flow |Nano Test Tubes |Microsurgery Kit | |Investment |−$11‚000.00 |−$11‚000.00
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Trident University International Willie Bates Module 2 Case ITM524: Foundations of Information Technology Management Dr. Mina Richards Introduction We live in an environment which changes often. In the business world‚ what is in demand today for an organization may not be a requirement for tomorrow. Smart managers know that organizations that succeed do so because they adjust to keep up with the changes that are taking place (Harmon‚ 2007). Change in business comes in many forms and
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HISTORY OF STATE BANK OF VIETNAM The development of the Vietnam banking system has closely linked with the national cause of revolution and construction. Before the August Revolution in 1945‚ Vietnam was a feudal-colonial country under the French colonialists’ rule. The banking and credit system was founded and protected by the French colonialists through the Indo China bank. Its functioned as both the central bank of the whole Indochinese region (Vietnam‚ Laos and Cambodia) and a commercial
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Mini-Case Study: McDonald’s Corporation: Firing on all cylinders while preparing for the future McDonald’s Corporation is the largest fast food restaurant chain in the world‚ operating more than 32‚000 restaurants in 118 countries. In 2008‚ McDonalds and Wal-Mart were the only stocks in the Dow Jones to end the year with a gain. From 2007 to 2008 they raised revenues in billion dollars earning above average returns. Its ability to create value for its stakeholders is impressive‚ but this trend
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