BILLABONG INTERNATIONAL LTD Completed as part of the requirements for ‘Corporate Finance’‚ 25765 Contents 1.0 Introduction 1 2.0 Executive Summary 1 3.0 Capital Structure 2 3.1 Types of Funding Utilised by Billabong 3 3.2 Recent trend in the level of leverage 3 3.3 Capital expenditure and financing: 5 3.4 Capital Structure of Similar Firms 6 3.5 Company Characteristics and Leverage policy 7 3.5.1 Taxes 8 3.5.2 Trade off Model 8 3.5.3 Pecking Order of Financing Choices 9 3.5.4 Signalling
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A-3 (Coverage ratio) The firm in the two preceding problems also had $6 million of principal repayments during the latest 12 months. Its marginal tax rate is 40%. Calculate the debt service coverage ratio. Debt-Service Coverage Ratio = (EBIT + 1/3 Rentals) / (Interest Expense + 1/3 Rentals + Principal Repayments / (1 - T)) = ($30 + $15 / 3) / ($10 + $15 / 3 + $6 / (1 - 0.40)) = 1.40 A-4 (WACC with rebalancing) Nathan’s Catering is a gourmet catering service located in Southampton‚ New York
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payout ratio is when a firm pays out stated dollar amount based on a percentage of its earnings that year. Linear Technology currently pays a $0.05 dividend per share‚ which accounts for 15 percent of their total earnings. Based on FY 2002 the dividend per share is still $0.05; however‚ it accounts for 27.3 percent of earnings (54/197.6=27.3) THIS MAY CHANGE THE FOLLOWING The reason why the payout is relatively low is because the company wants to sustain this ratio over time‚ which will help prevent
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1. Executive Summary The financial performance of CWT Limited for the last five years‚ from year 2010 till 2014‚ will be critically analysed in this report. CWT Limited is a leading provider of integrated logistics and supply chain solutions. Its key competitor is Neptune Orient Lines Limited (Hoover’s‚ 2015) which has a long-standing influence in Asia since 1968. A competitor analysis will be done for both companies based on the data from their published financial statements. CWT Limited has experienced
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restrained as appropriate at one end and under an axial tensile load of 500 KN applied to the other end face. It has been initially designed with a thickness of 50 mm. This gives a hand calculated stress value of 25 MN/m2‚ which is 1/8 of the material’s Yield Stress‚ of 200 MN/m2‚ giving a factor of safety of eight‚ which is deemed to too conservative. The flat bar now requires stepped down in size from W to h‚ forming a shoulder with fillet‚ at the middle of the bar along its length. For a given radius
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Econ 136: Financial Economics Problem Set #10 Due Date: April 30‚ 2014 1. In the spreadsheet Markowitz-01.xlsx some of the entries in the long/short and longonly portfolio data sections are missing (the missing data locations are highlighted in yellow). Use the Solver to calculate the following to replace this data: (a) The mean excess return‚ standard deviation‚ and portfolio weights for the minimum variance portfolio. (b) The mean excess return‚ standard deviation‚ and portfolio weights for the
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TABLE OF CONTENTS TOPICS PAGE NO. 1.0 Executive Summary………………………………………………………3-4 2.0 Objectives…………………………………………………………………..5 3.0 Economic Analysis………………………………………………………..6-7 4.0 Industry Analysis…………………………………………………………..8-10 5.0 Company Profile..………………………………………………………….11 5.1 Key Financial Ratios………………………………………………11-12 6.0 Valuations………..…………………………………………………………15 6.1 Dividend Valuation Model…………………………………………14-16 6.2 Price-Earnings(P/E) Model.………………………………………..17
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return higher than stockholders could earn in other investments. It would be better for the company to invest in such opportunities than to pay out dividends and thus one would expect the company to have a low dividend payout ratio. 16-5 The dividend yield is the dividend per share divided by the market price per share. The other source of return on an investment in stock is increases in market value. 16-6 Financial leverage results from borrowing funds at an interest rate that differs from the rate
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Common equity 60 ---- 100% LEI’s expected net income this year is $34‚285‚72; its establish dividend payout ratio is 30 percent; its federal-plus-state tax rate is 40%; and investors expect earnings and dividends to grow at a constant rate of 9 percent in the future. LEI paid a dividend of $3.60 per share last year and its stock currently sells at a price of $60 per share. LEI can obtain new capital in the following ways: Common:
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wo of the largest and most profitable corporations in the United States are the Atlanta‚ Georgia based Coca-Cola Company and the New York based Pepsi Cola Company. While both are called "colas" they both attempt to address the same target tastes but from different approaches. Coke was the first on market with what is still a "secret" formula and Pepsi followed with a similar (not exact) taste. Since taste is very much a factor of your personal likes‚ either or neither may appeal to you or seem sweeter
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