yesterday in a filing with the Securities and Exchange Commission‚ and separately in a letter to Teletech’s CEO‚ Maxwell Harper. “The firm is misusing its resources and not earning an adequate return‚” the letter said‚ “The company should abandon its misguided entry into comput-ers‚ and sell the Product and Systems Segment. Management must focus on creating value for shareholders.” Teletech issued a brief statement emphasizing the virtues of a link between
Premium Investment Net present value Internal rate of return
Teletech Case 15 1. How does Teletech Corporation currently use the hurdle rate? Teletech Corporation currently uses a single hurdle rate for both of their divisions. The divisions are Telecommunications Services and Products and Services. They use the hurdle rate based on the cost of capital which is a rough estimate of the Teletech’s WACC. They calculate it at 9.3% based on the cost of capital‚ beta‚ and WACC. 2. Please estimate the segments WACCs for Teletech (see worksheet Exhibit 1)
Premium Mathematics Weighted average cost of capital Investment
Over the Hurdle Executive Summary Currently‚ Teletech Corp. is using a single corporate hurdle rate to evaluate its investment decisions in its products and systems segment as well as its telecommunications segment. Using only one hurdle rate doesn’t take into account the risk that the company faces within each segment. Investors demand higher returns for riskier investments. Victor Yossarian is concerned about the low returns for the high risk in the products and systems segment‚ this
Premium Profit Weighted average cost of capital
How does Teletech Corporation currently use the hurdle rate? Currently Teletech uses a single hurdle rate for both their Telecommunications Services and Products and Services divisions. The hurdle rate is the cost of capital based on an estimate of the corporation’s WACC. 2. Please estimate the segment WACCs for Teletech (see the worksheet in case Exhibit 1). As you do this‚ carefully note the points of judgment in the calculation. Corporate Telecommunications Products & Systems MV
Premium Weighted average cost of capital Investment
Introduction The Randolph Corporation is a multidivisional producer of electric sanders‚ sandpaper‚ industrial grinders and sharpeners‚ and coated ceramics. The Corporation also has a real estate development division. The diverse product lines of the company divide the corporation into four divisions‚ namely‚ real estate‚ ceramic coatings‚ equipment manufacturing and home products. The Randolph Corporation Stock performed below expectations recently‚ when compared to other player in the industry. The
Premium Weighted average cost of capital Finance Risk
Corporation 1. What is a hurdle rate? How do you use it in a project evaluation? Hurdle rate is the minimum amount of return on a project the company is willing to accept before starting a project. It is used in project evaluation to evaluate the amount of return on the project. A common method for evaluating the hurdle rate is apply the discounted cash flow method to the project‚ like net present value. 2. How does Teletech Corporation currently use the hurdle rate? They used it based on
Premium Net present value Weighted average cost of capital Internal rate of return
Smith Midland Energy Resources‚ Inc.: Cost of Capital Case Questions This case provides an opportunity to determine what cost of capital firms should use when firms are evaluating investment opportunities. The case addresses what inputs should be used in estimating the opportunity cost of capital for investors as well as which firms should be identified as comparables. 1. How are Mortensen’s estimates of Midland’s cost of capital used? How‚ if at all‚ should these anticipated uses affect
Premium Economics Risk Weighted average cost of capital
is the financial asset and it becomes is a liability of the government upon the time you found the cash. So‚ the taxpayers will have to make up for the government liability. 2. The average rate of return on investment in large stocks has outpaced that on investments in T-Bills by about 8% since 1926 in US. Why‚ then‚ does anyone invest in T-Bills? Answer: This is because T-bill is regarded as an almost risk free asset as it is backed by the government. Therefore‚ it has lowest volatility as compared
Premium Investment Interest Rate of return
Financial Investment Opportunities o Kim Tuy n – Sally – F04-193 A report on Investment and Taxation Decisions Prepared for: Ms Joey Lai (Lecturer) Unit 39: Financial Investment Opportunities Banking Academy‚ Hanoi BTEC HND in Business (Finance) Prepared by: o Kim Tuy n – Sally – Class F04A Registration No.: ITP F04-193 Submission Date: 21 November‚ 2012 1 Financial Investment Opportunities o Kim Tuy n – Sally – F04-193 TABLE OF CONTENTS INTRODUCTION .....................................
Premium Risk
Midland Energy Introduction: Midland Energy Resources‚ Inc. is a global multi-division energy company with operations in oil and gas exploration and production (E&P)‚ refining and marketing (R&M)‚ and petrochemicals. On a consolidated level‚ the company had 2006 operating revenue and operating income of $248.5 billion and $42.2 billion‚ respectively. Its largest division is R&M with the Petrochemical division being the smallest. Midland’s most profitable segment is its P&E division which generates
Premium Weighted average cost of capital Generally Accepted Accounting Principles Corporate finance