KING TRUCKS CASE ANALYSIS BUS 500D: Business Finance Gong Chen MBA Program March 2‚ 2012 Abstract The main purpose of this paper is to have a brief analysis and evaluation on the project provided by Road King Trucks Company. Six main problems offered are the main topics in this paper. After evaluation‚ a recommendation will put out to choose the right engine and on the project. Road King Trucks Case Analysis
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640 Leigh Healey Alex Lutz November 30th | [Marriott Case Study] | Professor Triantis | 1. What is the weighted average cost of capital (WACC) for Marriott Corporation based on its target debt-equity ratio? Use a 34% tax rate. WACC = [(E/D+E) * Re] + [(D/D+E) * Rd(1-Tc)] Be = [1 + (1-Tc) d/e]*Ba 1.11 = [1+(1-.34}.41/.59]*Ba Ba = .76098 Using statistics from page four of the assigned case study: Risk Free rate (Rf) = 8.72 % (10yr rate) Rd = Rf + spread Spread
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Nike Inc. Case 1. What is the WACC and why is it important to estimate a firm’s cost of capital? WACC is weighted average cost of capital‚ which is the expected rate of return on average from all the company’s existing debts and securities. It takes into account all different types of financing in the company’s capital structure. The reason it is important to estimate WACC is because it measures what it costs the firm to take on a project based on its current Debt and Equity mix. When the
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1. WHY IS PARAMOUNT A TAKEOVER TARGET? Paramount is a potential merger target to Viacom and QVC for a few key reasons outlined below: Paramount & Viacom: (1) Synergy creation: The businesses of both companies are famous and highly complementary to each other. (2) Cost reduction: Paramount & Viacom both have economies of scale and are doing business in a similar industry. (3) Addition of enhanced and complementary distribution capabilities‚ which will significantly increase revenue. (4)
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When choosing our risk free rate‚ we decided to base it off of the assumption that the project would last 5-10 years. The 5 year bond yield is 6.22% and for 10 years 6.34% (Exhibit 3) which averages out to a risk free rate of 6.28%. Prevailing Yields on U.S. Government Securities (August 31‚ 1997) | | Annualized Yield to Maturity | | | | | 3-Month T-Bills | 5.24% | | 1-Year Bonds | 5.59% | | 5-Year Bonds | 6.22% | | 10-Year Bonds | 6.34% | | 20-Year Bonds | 6.69% |
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Case 1 Atlantic Corporation Maastricht University School of Business and Economics Corporate Governance and Restructuring 1. Is the acquisition of Royal’s linerboard mill and box plants a sound strategic move? Consider the short- as well as long-term outlook for linerboard prices and the profitability of the linerboard industry. Furthermore‚ what basis‚ if any‚ is there for expecting AtlanticRoyal’s combined linerboard and box mill operations to do better/worse than the industry overall?
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Nike Case Study By Mark Colasurdo‚ Andrew McMullen‚ Jonathan Burd‚ Gaoxing Feng‚ and Jie Leng Background: Kimi Ford‚ a portfolio manager at North Point Group‚ is looking into the profitability of investing in the stocks of Nike for her fund that she manages. She is supposed to base her decision the company’s data which was disclosed in the 2001 fiscal reports. While Nike management had addressed several issues that are causing the decrease in market sales and stock price‚ management presented
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Issue In this assignment‚ we are asked to compute the WACC of Marriott Corporation and each of the company’s three divisions. Our approach is outlined in the next section. We made a series of assumptions regarding either the available data or the missing information. This has been explained below‚ in a separate section. Approach We applied the following formulae to calculate the WACC: Our assumptions are explained in the next section. The table below presents the approach for calculations
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previous revenues have grown at an annual rate of 10% and its stock price regularly outperforms the S&P 500 as well the industry index. It is a conservatively financed firm with total assets of $1.76 billion and zero debt as of 2001. The purpose of this case study revolves around how should they use a $3 billion debt issue to restructure its capital that would add the most value for the shareholders of Wrigley. The decision of how to use the debt will impact the firm’s stock price‚ cost of capital‚ debt
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References: 1. http://annual-report2012.bmwgroup.com/bmwgroup/annual/2012/gb/English/pdf/report2012.pdf 2. http://www.bmw.com/ 3. http://www.intel.com/content/www/us/en/cloud-computing/cloud-computing-odca-cloud-strategy-bmw-case-study.html
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