cost of debt? We measured cost of debt‚ by adding the debt rate premium over US government interest rates. Since ‘Lodging’ segment had a higher useful life‚ we used 30-year US government interest rates here (8.95%)‚ and used 10-year interest rates for ‘Contract services’ and ‘Restaurants’ (8.72%). Since‚ no specific division of debt was given between these three segments‚ we used a simple average. Average US govt. interest rate= (8.95% + 8.72% + 8.72%) / 3 = 8.8% Add debt rate premium to this
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There are currently six operating segments: KFC (U.S.)‚ Pizza Hut (U.S.)‚ Taco Bell (U.S.)‚ Long John Silver’s / A&W (U.S.)‚ Yum Restaurants International (YRI) and Yum Restaurants China. On ‚ Yum announced that it would be creating a new segment‚ Yum Restaurants India. For financial reporting purposes‚ Yum consolidates the four segments into a single reporting segment. As a result‚ data used for forecasting revenues will include the Long John Silver’s / A&W segment‚ although Yum has stated that
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which is a largest car manufacturer in the country‚ located in Brgy. San Juan‚ Monde M.Y San Corporation‚ nations leading biscuit maker‚ Mandaue Foams‚ BF Construction Philippines; BPO Company like of the Teleperformance Inc.‚ Text Switch Unlimited‚ Teletech Holdings; and malls such as SM Savemore‚ SM Hypermarket‚ Puregold‚ Robinson supermarket and Sta. Lucia East Grandmall. Because of this income settings‚ more jobs had been generated and creating Cainta as one of the first class municipalities that
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This accounts for 92 percent of the company’s revenue. The other 8 percent comes from equipment and non Nike brand products‚ such as Cole Haan. When we were considering on whether it was more appropriate to use multiple cost of capitals for each segment we believe that they all mostly share similar risk factors. We therefore decided to calculate two different costs of capitals‚ one using the geometric and the other using the arithmetic method. We believe that Joanna Cohen’s methodology in determining
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VALUATION -PROBLEM SOLVING FOR THE CASE STUDY Name Institution Instructor Course Date Question 1 Potential value creation in the transitions: 1. Use of a risk hedging financial contract‚ the swap. 2. Acquisition of an undervalued target. 3. Evading tax liability. The management under the advisory of analyst believe that the company requires to make intensive‚ heavy investments which is not feasible if the Seagate Inc. remains a public company The other capital reorganisations alternatives are
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Executive Summary The case‚ Marriott Corporation: The Cost of Capital (Abridged)‚ concentrates on making decisions based on capital asset pricing model (CAPM) and the weighted average cost of capital (WACC) to measure the opportunity cost for investments. Dan Cohrs‚ the Vice President of Finance of Marriott Corporation‚ had to deal with making recommendations for the hurdle rates at Marriott Corporation and its three divisions which are lodging‚ restaurant and contract services. In calculating
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manufacturing company. By 1966‚ Interco was a major manufacturer and retailer of consumer products and services. Most of Interco’s growth during this period was through the acquisition of related businesses. In 1988 Interco was made up of 4 main business segments: * Apparel Manufacturing * General Retail Merchandising * Footwear Manufacturing and Retailing * Furniture and Home Furnishing 2) Interco’s Financial Performance The whole company financial performance is showed
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1. Is Mercury a good target for AGI? Discuss strategic fit of brands‚ products‚ customers‚ and distribution. Identify specific sources of value. Discuss AGI’s strengths/weaknesses compared with other bidders. Mercury AGI Brands Acquire an iconoclastic nonconformist image that trying to exploit by adding a line of active casual footwear. Associated with a lifestyle that was prosperous‚ active and fashion-conscious. products Main on men’s athletic footwear‚ and cover the athletic and casual footwear
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itself by addressing both top-line growth and operating performance. The goal was to improve revenues that had plateaued‚ and increase profits that had decreased over the years. One of its strategies to do so was by introducing a mid-priced shoes segment. Nike had revenue growth targets of 8 to 10% and earnings growth target of above 15%‚ which some analysts deemed as extremely aggressive‚ and unrealistic but‚ others considered it realistic. Kimi Ford’s problem Kimi Ford could not get a clear idea
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CASE STUDIES IN FINACE CASE STUDY 3: ESTIMATING THE COST OF CAPITAL QUESTION 1: a)b)c) The Capital Assets Price Model (CAPM) is used to describe the relationship between risk and expected return and is often used to estimate a cost of equity (Investopedia‚ 2009). The cost of equity(COE) of the discount rate is: R = Rf + β*(E - Rf) (1) Rf = Risk free rate of return‚ usually U.S. treasury bonds β = Beta for a company E = Expected return of the market
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