Investment Analysis (FIN 670) Fall 2009 Homework 8 Instructions: please read carefully • • You should show your work how to get the answer for each calculation question to get full credit The due date is Tue Dec 15‚ 2009. Late homework will not be graded. Name(s): Student ID 1. A constant-growing stock just paid $2 dividend and has a current market price of $30. Determine the stock’s required rate of return if the company’s constant growth rate is 5%. a. 5% b. 7% c. 12%
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Brown’s Chiropractic and Wellness Center Feasibility Analysis Five Force Matrix Importance (1 to 5) Threat to Industry (1 to 5) Weighted Score (Importance X Threat) Rivalry among companies competing in the industry- 3*2=6 Bargaining power of suppliers in the industry- 1*2=2 Bargaining power of buyers- 3*2=6 Threat of new entrants to the industry- 2*4=8 Threat of substitute products- 4*4=16 6+2+6+8+16=38 With a score of 38‚ the market is very attractive to enter. Brown’s Chiropractic
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Suppose your company has just acquired a firm that produces battery-operated lawn mowers‚ and strategists want to implement a market-penetration strategy. How would you segment the market for this product? Justify your answer. Explain how you would estimate the total worth of a business. In order to estimate the total worth of a business‚ I would determine its net worth or stockholders equity. After calculating net worth‚ I would add or subtract an appropriate amount for goodwill and overvalued
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Introduction This project aim is to analyze the diversification strategy of PepsiCo in 2008. PepsiCo is the largest food and beverage business in the world. The benefits of PepsiCo’s diversification strategies are identified. The business strategy is analyzed to determine its efficacy across PepsiCo’s consumer business segments and product portfolio. The value chain match ups are determined and analyzed to ascertain their relevance to the success of PepsiCo’s strategy. The competitive strengths
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1990. However‚ we can see that LA Gear had a much better performance in the previous two years with a precipitous RoE in 1990 as compared to the previous two years. Reebok on the other had has reported a stable RoE in the last three years. Looking at the component ratios of RoE we can see some some differences why LA Gear has had a huge drop on RoE lately. The three components of RoE are illustrated below: Profit Margin Cost control Pricing Asset Turnover Ratio Asset utilization Financial
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Financial Ratio Analysis PROFITABILITY - Ability to sell a product for more than the cost of producing it. - Not an exact estimate of the company’s pricing strategy but give a good indication of financial health. - Without an adequate gross margin‚ a company will be unable to pay its operating and other expenses and build for the future. - Should be stable should not fluctuate much from one period to another‚ unless the industry it is in has been undergoing drastic changes which will
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enough current assets to pay off current liabilities. The debt situation may make it difficult to raise the cash needed to invest in the Challenger bikes. Baldwin currently has about an 8% ROE‚ which is well below the industry average of 15%. By accepting the offer and using a 50% tax rate the ROE is estimated to be around 13%‚ which is significantly better but still below the 15% industry average. Q7. How would you describe Baldwin’s strategic position at the end of 1982? Is the challenger
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immediately an opposition emerged. The Roman Catholic Church had long criticized abortion as a form of infanticide. Many fundamentalist Protestant ministers joined the outcry. The National Right to Life Committee formed with the explicit goal of reversing Roe v. Wade. Religious traditions throughout the world have very different views on unborn children. In Japan‚ the Bodhisattva Jizo is the guardian of unborn children and expectant mothers. Legend has it that when babies die‚ they are sent to the underworld
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Maria Lucia Rodriguez PANTHER ID 3579558 Lucent Technologies Case 1- ROE decomposition 1998‚1999 AND 2000. What factors contributed to the differences in Lucent’s performance between those quarters? ROE Period NET INCOME X SALES X TOTAL ASSETS SALES TOTAL ASSETS COMMON EQUITY EQUITY MULTIPLIER ROE Dec-99 1175 0.12 9905 0.26 38684 2.41 9905 38684 16079 Sep-99 972 0.09 10575 0.27 38735 2.84 10575 38735 13622 Jun-99 829 0.09 9315 0.25 37156 3.00
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importance of debt capacity in a growing business. Suggested Questions 1. In what ways can Susan Collyns facilitate the success of CPK? 2. Using the scenarios in case Exhibit 9‚ what role does leverage play in affecting the return on equity (ROE) for CPK? What about the cost of capital? In assessing the effect of leverage on the cost of capital‚ you may assume that a firm’s CAPM beta can be modeled in the following manner: L = U[1 + (1 − T)D/E]‚ where U is the firm’s beta without leverage
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