The Wm. Wrigley Jr. Company: capital structure‚ VALUATION and cost of capital Introduction: Blanka Doborynin a managing partner of AURORA BOREALIS LLC tries to initiate a research for a potential investment in Wrigleys. They are trying to recapitalize the firm. Wrigley’s which is 100% equity financed has a market value of $13‚103‚000‚000 the question begins if it is totally equity financed is it running at its efficient level? Or Is it better to recapitalize the structure and thereby bring
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FAMILY NAME: ______________________________________ OTHER NAME(S): ______________________________________ STUDENT ID: ______________________________________ SIGNATURE: ______________________________________ PAPER ID: 00615 THE UNIVERSITY OF NEW SOUTH WALES AUSTRALIAN SCHOOL OF BUSINESS SCHOOL OF BANKING AND FINANCE FINS1613: BUSINESS FINANCE SEMESTER 1 2012 FINAL EXAM 1. TIME ALLOWED – 3 hours 2. THIS EXAMINATION PAPER HAS 19 PAGES 3. TOTAL NUMBER OF QUESTIONS – 45 Multiple Choice
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Valuation of AirThread Connections By: Chris Cruz Zach Hatoum Michael Peña Kevin Reilly Ali Zaidi American Cable Communications (ACC) 48.5 million homes had ACC cable passing through 24.1 million video subscribers 13.2 million high speed internet 4.6 million landline telephone Expected consolidated revenue of $30.9 billion (2007) Expected Net Income of $2.6 billion (2007) AirThread Connections One of the largest regional wireless companies in the United States Service more than
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financing were used. When you suggested this to your new boss‚ she encouraged you to pursue the idea‚ but to provide support for the suggestion. In today’s market‚ the risk-free rate‚ r RF‚ is 6% and the market risk premium‚ RPM‚ is 6%. CD’s unlevered beta‚ bU‚ is 1.0. CD currently has no debt‚ so its cost of equity (and WACC) is 12%. If the firm were recapitalized‚ debt would be issued and the borrowed funds would be used to repurchase stock. Stockholders‚ in turn‚ would use funds provided by the
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Finance Case Study Dilemma of Asian Bags Asia Paper Bag has since 1990 operated as a manufacturer of plastic carrier bags supplying them on a contract-manufacturing basis to well-known supermarket chains‚ fast-food outlets‚ pharmacies and department stores. Lately‚ Asia Paper Bag exports customized plastic carrier bags to Marks n Spencer and Boots Pharmacy in the United Kingdom. During the Asian financial crisis‚ Asia Paper Bag had
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a balloon payment is a large lump sum payment at maturity of a debt. 2. a company that seeks to pay a fixed dollar amount in dividends each period will likely experience a decrease in its payout ratio over time. 3. a particular asset has a beta of 1.2 and an expected return of 10%. The expected return on the market portfolio is 13% an the risk-free is 5%. Which of the following statement is correct? This asset lies below the security market line. 4. all else equal the higher the call premium
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the borrowing rate‚ we use 5.70% regarding Deluxe’s bond rate A from Exhibit 8. The marginal tax rate is is projected to be 38%. We use 5.41% for the risk free rate of return with respect to the 20 years U.S Treasury bond. The equity risk premium and beta are given at 6% and .85‚ respectively. Since the beginning of 2002‚ Deluxe had retired all of its long term debt‚ we calculate the total debt by adding the short-term debt and the long-term debt due within one year to arrive at $151 million; for the
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&RPage |1 Entrepreneurial Finance 2013 - Case Assignment Questions R&R R&R case brings up major themes that we will see over and over again in this course. This case also differs significantly from most of the other case you will read in this course as it provides a full story of an entrepreneurial venture. In most other cases in this course‚ the entrepreneur is faced with a decision/dilemma at the time of case. In these cases I will ask you to put yourself in the entrepreneur’s shoes and come
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Harris seafood As a shrimp industry Harris Seafood Inc. is one of the biggest producers of frozen shrimp in the United States. Company has reached approximately $33mln of sales by 1979. Despite the risks of supply and demand of shrimp‚ company has been very successful in terms of average profitability. Our role as analysts was to decide whether processing plant project is a worthwhile addition to Harris Seafoods. Analyst assumptions The valuation of the firm starts in year 1980. The 48% marginal
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Pharmaceutical Industry The pharmaceutical industry includes companies that research‚ develop‚ market or distribute generic and branded drugs. The industry expanded during the 1980’s and drugs to treat heart disease and AIDS were prominent. Consumer demand for nutritional supplements and alternative medicine increased during the 1990’s with the Internet facilitating direct purchases of drugs. Advertising for direct consumption of pharmaceutical drugs became more prominent; pharmaceutical companies
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