...Business Law Written Assignment 3 Case Study 1 Parks, a 7-foot, 265-pound center for the San Diego Slick, objected when his contract was assigned from the ABC Corporation to the XYZ Corporation, the team’s new owner. The change of owners did not cause a change in the composition of the team although a new coach was hired. Parks’s compensation and his responsibilities remained the same. Was this contract assignable? Facts of the Case: 1) Parks contract was assigned from the ABC Corporation to XYZ Corporation. 2) Parks compensation and his responsibilities remained the same. Issues: 1) The reason why we are in court today is to identify if Park’s contract was assignable. Rules of the Law: 1) Personal Service Contract – The parties agree that a personal service contract may be assigned. This allows the trade of an athlete from one team to another team. 2) Notice of Assignment – Assignee is under a duty to notify the obligor that the assignment has been made and performance must be rendered to the assignee. 3) Anti-Assignment Clause – Prohibits the assignment of rights under the contract. 4) Approval Clause – requires that the obligor approves any assignment of contract. Analysis & Conclusion: Since we do not have all the facts we can assume the following: 1) Parks contract did include the Personal service contract. 2) Notice of assignment was made by XYZ Corporation. 3) Parks contract did NOT include Anti-Assignment...
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...Magisteruppsats 30 hp | Vårterminen 2013 The Effect of External Debt On Economic growth – A panel data analysis on the relationship between external debt and economic growth. Av: Dereje Abera Ejigayehu Handledare: Joakim persson Handledare: [Handledarens namn (teckenstorlek: 12p)] Abstract The impact of external debt on economic growth is a debatable issue between scholars since the onset of the debt crisis in 1980’s. This thesis examines whether external debt affects the economic growth of selected heavily indebted poor African countries through the debt overhang and debt crowding out effect. This is carried out by using data for eight heavily indebted poor African countries between 1991 to 2010.The result from estimation shows that external debt affects economic growth by the debt crowding out effect rather than debt overhang. Moreover, in an attempt to mark out debt servicing history, the thesis found the selected countries are not paying (servicing) more than 95% of their accumulated debt. Key Words: External Debt, Debt overhang, Debt crowding out, debt servicing and Table of Contents CHAPTER ONE .....................................................................................................................................1 INTRODUCTION ..................................................................................................................................1 1.1 Background of the study.................................................................
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...buying price is financed via debt and equity. The cash flow or assets of the target company are used to secure the debt and repay it. The returns on equity increase as the debt increase as debt has a lower cost of capital compared to equity. In other word a LBO is a method of acquiring a company with money that is nearly all borrowed. To conduct an LBO, the acquirer ensures that the target’s assets are adequate as collateral for the loan needed to purchase the target. The acquirer must also create and study financial forecasts of the combined entities to make sure that they generate enough cash to cover the principle and interest payments. Once the buyer has determined that the LBO is financially feasible it works on acquiring enough cash for the acquisition by incurring debt. Doing an LBO is expensive and the process can be complex. LBO’s are popular in merger and acquisition as the acquiring organization uses money borrowed to fund the acquisition. The assets of the target organization are used as collateral to get the loan. LBO enables organization to make a big acquisition without using a lot of capital. Purpose of the paper This paper seeks to analyze the acquisition of Tribune Corporation by Grave Dancer. The entire process was characterized by miss-steps such as failure to do due diligence and proper structuring of the deal. Discussion Was this an LBO, multiple LBOs or something like an LBO? Grave Dancer used debt to acquired Tribune Corporation...
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...| 9/26/2014 | | | | | | | | | | | | Coke vs PepsiWeek 5 Case Study | | | | | | | | | | | | | | | | | | | | | | | | Artesia Stivison, Robert Higdem & Rocky Edmondson | Coke vs Pepsi Week 5 Case Study Question #1 Question #2 Question #3 Question #4 Can you make poor investment decisions and be profitable? What evidence do you see from the companies’ results that indicate how well they made investment decisions (capital budgeting). A company can make poor investment decisions and still remain profitable, but only for a time. A company cannot continually make poor investment decisions and remain profitable forever. When looking at the Coke vs Pepsi case study, we find that Doug Ivester, then CEO of Coke, made a bad investment decision when he chose to increase the rate charged for syrup to franchisers. As a result, bottlers raised prices to improve profitability, and in turn there was a decrease in overall sales volume. During the time Ivester was CEO, the net income for Coke fell 41% and he ended up without a job. Had this been a trend that continued, Coke would have been out of business, but they rebounded and remain profitable. This example shows that a company can make a bad decision and continue to be profitable in the long run. But, repeat bad investment decisions and a company will go broke. Question #5 How does WACC change over time? What do you think might drive the changes? WACC...
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...Case 9 Kota Fibers, Ltd. Kota Fibers, Ltd. was founded in Kota, India in 1962. Kota produced nylon to provide synthetic fiber yarns to local textile weavers. The synthetic fiber yarns were mainly used to make traditional women’s colorful dresses in India called the saris. One sari averaged eight yards of fabric. Indian women usually purchased three saris every year. India’s female population is around 500 million, with a demand for saris accounting for more than twelve billion yards of fabric and a stable business. The demand was being supplied by domestic textile mills that fulfilled their yarn requirements from suppliers like Kota Fibers. Kota used new technology and domestic raw materials to produce their quality product. Demand for synthetic textiles was characterized by a stable year to year growth with fluctuation based on special Indian festivals and celebrations. The most important festival was the Diwali celebration in mid-autumn, which made a seasonal peak in demand for new saris. Therefore, mid-summer was the seasonal peak demand for nylon yarn from Kota. Unit industry growth was expected to be 15% per year. Consumers purchased their saris from cloth merchants located all around the country. Cloth merchants were important local figures that were well known to the area residents who granted credit in order to support their sales. The suppliers were very competitive in order to keep the merchant’s business. The suppliers were aggressive in price, service, and credit...
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...State of Connecticut Municipal SWAP Case Study An Analysis and Recommendation of Synthetic Fixed Rate Derivatives State of Connecticut Municipal Swap Case Study: An Analysis and Recommendation of Synthetic Fixed Rate Derivatives Dear Mr. Benson R. Cohn, We, the State of Connecticut, have typically financed the long-term capital needs of the State through tax-deductible General Obligation bonds. This allowed us to achieve a lower costof-debt than similar taxable bonds. In stark contrast to the fixed-rate long-term debt financing, short term municipal financing for our State was often achieved through innovative methods developed by Wall Street. These new funding options, commonly referred to as Variable-Rate Demand Obligations (“VRDO’s”), afforded us the ability to offer a shorter maturity, lower variable rate bond that is both callable and puttable. Puttable downside risk is covered by a Letter of Credit (“LOC”) typically provided by a Japanese Commercial bank. We have been approached by two Wall Street Banks to bring these innovations to the long-term debt market. It is in our best interest to explore these options as alternatives to raising the $325 million in tax-exempt, twenty-year debt for our state’s capital spending requirements. We know it is preferable for us to pay fixed payments for the foreseeable future in order to budget properly. The problem is that fixed rate loans for the long period of time we need require a higher rate to be paid to any willing investors compared...
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...Case Study Report Sleeman Brewery Limited As Investment Portfolio Option Executive Summary I am writing this report for Chantal Dumont as to give recommendation whether or not she should invest in Sleeman Brewery Limited. We then recommend you to invest in this company if you are seeking for long term growth in your portfolio. Introduction This report is made by Ryan Tan to for Chantal Dumont as part of the assessment to determine and to help her to come to a decision whether to include or exclude Sleeman Breweries Limited in her portfolio. The report itself will look deeper into the case and the explanation behind the case to provide Ms. Dumont with the sufficient data and knowledge to make decisions for her portfolio. Critical Success Factor Sleeman Breweries Ltd’s strategy is to use differentiation to market their products. They are categorized as the microbreweries which market their product mostly on premium price and compete regionally rather than nationally. Recent transaction determined that SBL had purchased a right to produce, sell and distribute Stroh Brewing Company, which focus more on low to medium quality beers. This reflects the changes in SBL as they are trying to grow their market of low and medium quality beers. As a microbrewery, the secret of their success is to produce in quality by making beers in small batches to ensure their quality and taste. In this type of industry, every...
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...Jacqueline Bell Case Study 3: Firm Valuation and Impact of Financial Leverage on Firm Value (Chapter 16) BUS-F301 Financial Management, Fall 2010, Class No. 23780 December 5, 2010 Case Study 3 1. If IRE would like to maximize its total market value, should it issue debt or equity to pay for the rental property? Briefly explain. Levered or unlevered, if IRE purchase the large rental property, their new capital structure will still be below the optimal capital structure amount of 45% debt. However, issuing debt to purchase the large rental property will net IRE the higher market value. VL = $1,855,759,259 - VU = $1,768,259,259 2. How does the market value balance sheet of IRE look like before the firm makes the announcement on the rental project? Explain and construct the market value balance sheet. Before IRE takes on any debt, the market value of their assets is entirely equal to the market value of their equity. Indiana Real Estate Inc. Market Value Balance Sheet - Before Land Purchase Assets $1,359,000,000 Equity $1,359,000,000 Total assets $1,359,000,000 Total Debt & Equity $1,359,000,000 3. What is the present value of the rental project, assuming that IRE issues equity to finance it? NPV of Project | $ 159,259,259 | 4. How will IRE’s market value balance sheet look like after the firm makes announcement on the rental project which will be financed by equity? Explain and construct the market value...
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...paying an increased dividend at a later stage. Whether to issue dividends and what amount, is determined mainly on the basis of the company's unappropriated profit (excess cash) and influenced by the company's long-term earning power. When cash surplus exists and is not needed by the firm, then management is expected to Payout some or all of those surplus earnings in the form of cash dividends or to repurchase the company's stock through a share buyback program. Management must also choose the form of the dividend distribution, generally as cash dividends or via a share buyback. Various factors may be taken into consideration: where shareholders must pay tax on dividends, firms may elect to retain earnings or to perform a stock buyback, in both cases increasing the value of shares outstanding. Alternatively, some companies will pay "dividends" from stock rather than in cash. Our group have selected 3 journals related to the dividend policy in our quest to understand the factors/determinant of the latter and its relationship with investment opportunities and corporate finance. Further the chosen journals concentrated on the research dividend policy affecting firm’s in the emerging market. The following are the reviews of the said journals. 2.0. Journal Review 1 Nguyen Thi Xuan Trang. (2012)....
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...the financing in organization. Different books and journals have been used to prepare the assignment. Contents Introduction 3 Requirement 1 3 Task 1.1 : Business needs finance and available sources of finance to a business 3 Equity financing 4 Debt Financing 4 Lease Financing 4 Task 1.2 : Accessing and comparing the implication of the different sources of finance 4 Implication of equity financing 4 Implication of debt financing 4 Implication of lease financing 5 Task 1.3: evaluation of the appropriate sources of finance for the above mention businesses. 5 M1: Critically evaluate each available sources of finance to that particular firm. Evaluation should include the pros and cons, and legal aspects of each source. (Merit M1). 5 Case study 1: An engineering firm 5 Equity financing for this firm 5 Debt financing 5 Lease financing 5 Case study 2: Individual financing 5 Equity financing for this firm 5 Debt financing 6 Lease financing 6 Case study 3: Large plc. 6 Equity financing for this firm 6 Debt financing 6 Lease financing 6 Case study 4: Local Do It yourself firm 6 Equity financing for this firm 6 Debt financing for this firm 6 Lease financing 6 Case study 5: Rugby club 6 Equity...
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...Report based on case study “ A successful business development”. Contents: 1. Types of business entity 2.1. Explanation of each entity 2.2. Advantages and disadvantages of each type of entity 2.3. Objectives of each entity 2. Stakeholders 3.4. Definition of stakeholder 3.5. List of stakeholders of each entity 3.6. Interest of each stakeholders 3. Organizational structure 4.7. Comparison of two structures presented in the case study 4. Human Resource Management 5.8. The role of HR within the structures presented in case study 5.9. Different methods of HR functions has been delivered of each type of entity 5. Reference 1. Types of business entity In the attached case study we have examples of following business entity: * Section 1: Sole trader * Section 2: Partnership * Section 3: Company: Private Limited Company * Section 4: Public Limited Company Sole trader: Sole trader is an individual who is run his own business. It is a self-employed person who bears risks and losses and takes the profits and the benefits. Partnership: Partnership is type of entity which is organized and managed by at least two people and where all profits and debts are share between the partners. Private limited Company: Private limited is type of business entity which is run and managed by shareholders who has limited liability and shares are exchange privately. There are restrictions define...
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...essential to make sound business decisions. For example, in local government, conducting research on finances assists with budgeting and planning. Since I work in local government, I searched for articles on research studies within local government agencies and their financial performance measures. The research study I found is called, “Local Government Measurement and Use of Performance Accounting and Financial Reporting Data in Planning and Budgeting Decision Support” (2009). The study used a multi case study approach. The study was done to identify debt obligation performance in financial reports to assess the measurement of debt performance. The researcher selected three county government agencies to perform the study. The selection of the county agencies was based on history and similarity of the use of performance measures and the use of debt performance data in their budget decision making. The counties also share similar characteristics in city age, population, general fund revenues and geographic region. The counties selected for the study are Solano County in California, Prince William County in Virginia and Kent County in Michigan. The study used the Comprehensive Annual Financial Reports and budget for each county to examine the debt obligation performance. The researcher used these reports because they are audited and seem more credible than self-reported financial reports. Financial performance measurement information provides information to Council...
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...University Of Finance And Administration Faculty Of Economic Studies Business Management And Corporate Finance Field of Study: Trade Management Case Study: Accounts Receivable Management Jan Budaev summer semester 2016 Introduction Receivables can be defined as a company's right to payment of an amount of money from the debtors, which clearly belong among the assets. The assets can be divided into current and long term by the expected maturity at the time of their creation. Receivables are often created from trading - for the delivery of our products, goods or services on the basis of the document, that is usually called invoice, which is issued among the traders. Receivables affect the financial performance of the company, because the creation of receivables generates revenue for the company. Therefore, it is very important to monitor the development of receivables in volume, structure and time. Unpaid receivables are also related to the costs of their recovery. Outstanding receivables adversely affect the liquidity of the company. All the risk factors could be eliminated with the proper tools and methods in the Accounts Receivable Management. The main objective is to outline the main purpose of Accounts Receivable Management, describing the phases of Receivables Management, determination of credit terms. and options for managing receivables. Phases and Practical...
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...Bankruptcy laws help people who can no longer pay their creditors get a fresh start by liquidating assets to pay their debts or by creating a repayment plan. Bankruptcy laws also protect troubled businesses and provide for orderly distributions to business creditors through reorganization or liquidation. Most cases are filed under the three main chapters of the bankruptcy code. They are Chapter 7, Chapter 11, and Chapter 13. Federal courts have exclusive jurisdiction over bankruptcy cases. This means that a bankruptcy case cannot be filed in a state court. Below is a high-level summary on each bankruptcy code: Chapter 7 – Liquidation under the bankruptcy code: The chapter of the Bankruptcy Code providing for "liquidation," ( i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.) Chapter 11 - Reorganization under the bankruptcy code: The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.) Chapter 13 – Individual debt adjustment: The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.) To some extent, Chapters...
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...is a legal procedure for liquidating a business which cannot fully pay its debts out of its current assets. Two major objectives of a bankruptcy are first of all, fair settlement of the legal claims of the creditors through an equitable distribution of a debtor’s assets. The second objective is to provide the debtor and opportunity to a fresh start. Bankruptcy can be a very tough process that causes losses for all stakeholders. For example, is a society...
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