Holding nearly 80% of the market share in the smokeless tobacco industry‚ UST Inc. has been generating large and stable income. However‚ the leading company in a certain industry tends to react slowly to market share erosion by competing firms and lack of creativity in the introduction of new product‚ a situation UST Inc. is now undergoing. Concerning the declining sales growth and gradual loss of the market share‚ UST Inc. is now considering recapitalizing by issuing debt amounts to $1 billion
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Income distribution or redistribution as some call it takes place when money is taken away from someone and given to someone else. Most of the time it is taken away from someone who has earned it and given to someone who has not. Why does this happen and when did it begin? What are the benefits and what are the unintended consequences? I will try to answer these questions and give another option in the next few paragraphs. The beginning of social safety nets began‚ in the United States‚ during the
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Assignment Instructions: For this homework you will have to predict the future financial statements of the Body Shop. There is a template provided. Use the figures for 2011 and the forecasting assumptions on the template to forecast the income statement and balance sheet for the next three years. For some variables there are no assumptions provided since they should be calculated rather than predicted (e.g. retained earnings). Cash and Debt are the two plugs. Assumptions for the cash and
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Finance Policy Recommendation and Pro Forma Budget: Boeing Henry Aguirre‚ Patrick Buckley‚ Sheri White-Manning‚ Ted Ortiz‚ and Becky Wilson FIN 571 June 5‚ 2013 Dr. Tom NeSmith Boeing Working Capital Policy Analysis Boeing is an aerospace cooperation that has been around since 1916. William E. Boeing‚ and a former U.S. Navy officer named Conrad Westervelt discovered the cooperation. They started out with a two seated single-engine seaplane called B&W. About a year later‚ the company
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“UST Inc” case study The primary business risks associated with UST are as follows: First‚ legal challenges will cause litigation expenses‚ lawsuits expenses and settlement payments‚ which will decrease the operating income and cash flow and will increase the risks of debt default. From the industry level‚ the smokeless tobacco manufactures have faced less exposure to health related lawsuits than cigarette manufactures because the scientific evidence linking smokeless tobacco to cancer is less
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Debt Policy at UST Attributes and Risks of UST UST is the market leader in the moist tobacco segment. In a struggling tobacco industry‚ UST has shown consistent growth over the past few decades. Despite the decrease in demand for smoked (cigarette) tobacco‚ there is a growing demand for UST’s products. The perception that smokeless tobacco is healthier than smoked tobacco has helped the company to build a strong customer base. Therefore‚ despite some legislative setbacks‚ the company is growing
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Introduction: The case “Debt Policy at UST Inc.” deals with the progressively lowering growth and the company’s board decision to borrow up to $1 billion over five years to accelerate its stock buyback program. The case talks about how the company has seen its commanding market power decline over the years due to price challenge from smaller companies and has been experiencing slow growth rates due to lack of innovation in recent years. The investors had concerns regarding the future of the company
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Question 1 How would you characterise the economics of UST business? What are the primary business risks associated with UST [Hint:Compile a list of factors that a credit analyst would take into account when evaluating the proposed recapitalisation]? UST is a principal producer of moist smokeless tobacco products‚ controlling roughly 77% of the overall market. It has $913.3m of assets of which tobacco accounts for 54.5%. The net income for UST has been growing at 11% compounded annual growth rate
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Landforms Australia’s major landforms Mountains Many of Australia’s mountain ranges are the result of folding or faulting – for example the Flinders ranges and the Stirling Ranges. Fold Mountains are formed when one plate slides down under another .Some rocks are forced down while others are forced upwards and bent into wave-like forms. Fault Mountains are formed when layers of rock are fractured and one section moves down and another section moves up. Until about 600 million years ago‚ the area
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MEMORANDUM TO: UST Inc. Investors CC: FROM: DATE: SUBJECT: Debt Policy at UST Inc. ADD INTRO PARAGRAPH From the viewpoint of the bondholder‚ UST Inc. has various attributes that make the company a safe‚ yet sometimes risky investment. Qualities that make UST Inc. a superior investment include their excellent A-1 credit rating and their strong brand name and market position‚ which has made UST Inc. one of the most profitable companies in corporate America. While their asset tangibility
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