...Merger for Synergies with Dell Computers Courtney Ternullo TUI Introduction and Purpose of this Paper Though Dell is one of the largest computer companies in the world, the recent past has been very tough for the company which can be seen in its stagnant revenues, declining margins and subpar performance compared with industry peers such as Apple and HP. There are multiple reasons for this performance such as Dell operating at the standards based commodity end of the business, with limited presence in the margin rich high end products, and it not being able to scale up to the creativity and innovativeness of companies such as Apple which have completely changed the dynamics of the technology industry. In addition to this, competitors like HP and Acer have caught up with the Dell advanced supply chain and with the networked environment, the competitive advantage that Dell had with the direct model has come down. Dell has in the past five years have made multiple smaller acquisitions such as Alienware to boost its capabilities in high margin and high end products, but has not been able to adequately answer the challenges posed by Apple and HP, leading to declining market share. Also, Dell has diversified into consumer electronics and mobile products, but has not been able to capture a strong position there due to intense competitive and more innovative companies. This paper looks at recommending some attractive merger and acquisition option for Dell that would bring in value...
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...Chapter 1 A Brief History of Risk and Return 6. Cherry: RA = 8.60% Var = 1/4[(.17 – .086)2 + (.11 – .086)2 + (–.02 – .086)2 + (.03 – .086)2 + (.14 – .086)2] = 0.00623 Standard deviation = (0.00623)1/2 = 0.0789 or 7.89% Straw: RB = 10.20% Var = 1/4[(.16 – .102)2 + (.18 – .102)2 + (–.06 – .102)2 + (.01 – .102)2 + (.22 – .102)2] = 0.01452 Standard deviation = (0.01452)1/2 = 0.1205 or 12.05% 7. The capital gains yield is ($49 – 56)/$56 = –.1250 or –12.5% (notice the negative sign). With a dividend yield of 1.3 percent, the total return is –11.20%. 8. Geometric return = [(1 + .17)(1 + .11)(1 - .02)(1 + .03)(1 + .14)](1/5) – 1 = .0837 or 8.37% 9. Arithmetic return = (.21 + .12 + .07 –.13 – .04 + .26) / 6 = .0817 or 8.17% Geometric return = [(1 + .21)(1 + .12)(1 + .07)(1 – .13)(1 – .04)(1 + .26)](1/6) – 1 = .0730 or 7.30% 20. Stock A: RA = (0.08 + 0.08 + 0.08 + 0.08 + 0.08)/5 = .0800 or 8.00% Var = 1/4[(.08 – .08)2 + (.08 – .08)2 + (.08 – .08)2 + (.08 – .08)2 + (.08 – .08)2] = 0.000000 Standard deviation = (0.000)1/2 = 0.000 or 0.00% RG = [(1 + .08)(1 + .08)(1 + .08)(1 +.08)(1 + .08)]1/5 – 1 = .0800 or 8.00% Stock B: RA = (0.03 + 0.13 + 0.07 + 0.05 + 0.12)/5 = .0800 or 8.00% Var = 1/4[(.03 – .08)2 + (.13 – .08)2 + (.07 – .08)2 + (.05 – .08)2 + (.12 – .08)2] = 0.001900 Standard deviation = (0.001900)1/2 = 0.0436 or 4.36% RG = [(1 + .03)(1 + .13)(1 + .07)(1 + .05)(1 + .12)]1/5 – 1...
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...Initial Public Offerings In order to gain funds for their organization, companies use initial public offerings (IPOs) to introduce their first sale of stock to the market, which is available to investors. An IPO allows a company to tap a wide pool of investors to provide itself with capital for future growth, repayment of debt or working capital (Wikipedia.com). Avaya, a global leader in business communications and phone systems, is considering an IPO in the near future but is uncertain of which method of IPO to use. Since Avaya has been a publicly traded company in the past, and it’s recognized and established global brand has seen no hint of decline in its profits or popularity (thetelecomblog.com), it would be best for the company to use an auction based IPO. Based on current analysis and findings, it would be best that the executives of Avaya Corporation use the auction based type of IPO because it could bring the highest profit per share to the company. Since the company has been publicly traded before, investors may already have knowledge of the company’s potential and bid higher for the shares. In return, Avaya could make more than anticipated if they were to set the value of the shares. In the auction based IPOs the bids are open to a larger investor pool, which include investors that have been in the business for decades and those that are new to the investing process. This expansion in investors can raise the bids higher because of the added competition in the auction...
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...Qualifying Project in Management | 3 | Wulf | Saturday* | 8:30–Noon | | Blended | 20914 | BUS522 | 191 | Global Business Experience: China | 3 | Zeng | Saturday^ | 8:30am -4:30 pm | TBD | Blended | 21318 | BUS598 | 1960 | Globalization, Social Responsibility and Org. Strategy | 3 | Sweeney | Saturday* | 1:00-4:30 pm | | Blended | 21320 | BUS598 | 1960 | Introduction to Health Systems | 3 | Johnson | Saturday* | 1:00-4:30 pm | | Blended | 22067 | BUS598 | 191 | Introduction to Sustainability Management | 3 | O’Brien | Thursday | 6:00-8:50 pm | FL 311 | Worcester | 20915 | ETR596 | 191 | Selling and Sales | 3 | Delvy | Tuesday | 6:00-8:50 pm | SL 406 | Worcester | 20916 | FIN501 | 191 | Economics for Managers | 3 | Wang | Tuesday | 6:00-8:50 pm | WB 323 | Worcester | 20917 | FIN501 | 1960 | Economics for Managers | 3 | Wang | Saturday* | 8:30-Noon | | Blended | 21761 | MIS571 | 191 | Database Applications Development | 3 | Strong | Tuesday | 6:00-8:50 pm | WB 229 | Worcester | 20918 | MIS573 | 191 | Systems Design and Development | 3 | Wilson, V. | Wednesday | 6:00-8:50 pm | GH 227 | Worcester | 20919 | MIS581 | 191 | Information Technology Policy and Strategy | 3 | Loiacono | Monday | 6:00-8:50 pm | SH 304 | Worcester | 20920 | MIS582 | 1960 | Information Security Management | 3 | Wilson, V. | Saturday* | 8:30–Noon | | Blended | 20921 | MIS584 | 191 | Business...
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...Initial public offerings Initial public offerings Keith Broomfield Jr Trident University FIN501 Strategic Corporate Finance Professor: John Halstead Summer 2013 Keith Broomfield Jr Trident University FIN501 Strategic Corporate Finance Professor: John Halstead Summer 2013 Module 1 Case Module 1 Case 1) What type of IPO should AVG use—a traditional IPO or an online auction? Based on your analysis and findings, what would you recommend to the executives of AVG? Explain your reasoning in detail. As I understand the formula/process. Most IPO's are underwritten by an investment banking organization that specializes in providing venture capital to launch an organization toward a public offering. Once the valuation of the company whose public offering is being considered is established then shares are created. These shares represent a certain value or stock domination as based on the company's worth through their product, service or manufacturing capability as identified by the Investment Banking Firm. In other words what current market share does the pending IPO company have, their current net worth and the future of their product and the market they currently affect, oh yes and do they have a proprietary product or patent and what's their competition about. This is a rather simplistic formula and for the sake of time will work for now. Those initial shares are first offered to large institutional investors. These institutions are capable of providing large capital...
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...Taking a Risk with Apple: Cost of Equity TUI University Monessa Catuncan Module 3 SLP FIN501- Strategic Corporate Finance Dr. William Anderson 26 March 2012 Introduction Debt Ratio and Debt to Equity Ratio Calculations for Apple Inc. Total Liabilities (L) = 39.756B Total Equity (E) = 76.615B Short-term Liabilities (SL) = 0 Long-term Liabilities (LL) = 0 (finance.google.com) Debt Ratio =LL+E= 39.75639.756+76.615= 39.756116.371=0.342 Debt to Equity Ratio =LE= 39.75676.615=0.519 Short-term Debt Ratio =SLL+E= 039.756+76.615= 0116.371=0 Short-term Debt to Equity Ratio =SLE= 076.615=0 Long-term Debt Ratio =LLL+E= 039.756+76.615= 0116.371=0 Long-term Debt to Equity Ratio =LLE= 076.615=0 Analysis of Apple Inc. Ratios and Debt Throughout the past decade, Apple’s tremendous success has allowed the company to achieve record-breaking values in total revenue, market capitalization, and cash flows, among many other values. While the calculations above show a debt to equity ratio of almost 0.6, Apple Inc. has not endured debt since 1999; therefore this value can be a slightly misleading. The total liabilities number above represents a wide variety of items such as payrolls, inventory purchases, taxes, etc. If Apple’s debt value were used as the total liability value, this ratio would be zero. The short- and long-term debt to equity ratios also equate to zero. While Apple currently enjoys a debt-free environment, the company has not always seen...
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...Trident University Module 5- SLP FIN501 Dr. Glenn Tenney Jeremy Stack Net present Value, Mergers and acquisitions When brainstorming on the possible ideas of mergers or acquisitions it was easy at first to automatically think similar corporations within the same market either small or big or even in direct competition. Upon researching and reviewing the required readings I realized there are numerous types of mergers and acquisitions that could and should be considered in the terms of better business for my company (Target), for the market, and for the consumers in general. The Target Corporation is an American retailing company. It is the second largest discount retailer behind Walmart. With that being said it would at first be a natural thought maybe to think of a merger with Walmart, but as Target being second to them it wouldn’t necessarily be a merger as it would be an acquisition by Walmart and probably wouldn’t make the most business sense even if both were allowed to remain as separate entities. Beyond that certain regulatory bodies would probably find a merger or acquisition to constitute a monopoly and threaten competition within the respective industry. So what would be a company worth merging with or acquiring? One such company that comes to mind which I believe would be considered a Horizontal merger would be the Kmart Corporation as they are in direct competition. Kmart is listed as the 3rd largest discount retail chain behind Walmart and Target...
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...|TRIDENT UNIVERSITY INTERNATIONAL | |WALMART | |FIN501 SLP 1 | In 1962, Sam Walton traveled the country studying everything he could about discount retailing. He became convinced American consumers wanted a new type of store. Trusting his vision, Sam and his wife Helen put up 95 percent of the money for the first Wal-Mart store in Rogers, Ark. In 1972, Wal-Mart stock was offered for the first time on the New York Stock Exchange. its initial public offering in 1970, the company has performed well, recording numerous splits and providing a return of more than 160,000 percent to its initial investors The company initially offered 3000,000 shares at $16.50 per share.[1] With this infusion of capital, the company grew to 276 stores in 11 states by the end of the decade. Today, there are 10,130 stores and Sam's club locations in 27 countries employing 2.2 million associates, serving more than 176 million customers a year! As of yesterday, Walmart sold at $59.01 a share.[2] Personally I'm a fan of Wal-Mart and its prices. Although we are military and have the Exchange that offers us quality items tax-free, the selection at Walmart still can't be beat...
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...FIN501: FINANCIAL MANAGEMENT The Research Project CHINA’S DEVALUATION OF YUAN SLAMS U.S STOCKS 201505021 TRAN THI THANH BINH (SARA) SolBridge International School of Business Winter 2015 China's Devaluation of Yuan Slams U.S. Stocks (Aug 11 2015, 1:21 pm ET) NEW YORK -- China's 2 percent devaluation of the yuan on Tuesday pushed the U.S. dollar higher and hit Wall Street and other global equity markets as it raised fears of a new round of currency wars and fed worries about slowing Chinese economic growth. U.S. stock indices dropped more than 1 percent and stocks also fell in Asia and Europe as investors contemplated the implications of a move designed to support China's slowing economy and exports. The MSCI All World Index of global shares fell 1.16 percent. "What is good for growth in China is unfortunately bad for everybody else," said Bill McQuaker, co-head of multi-asset at Henderson Global Investors. The Dow Jones industrial average fell or 1.4 percent to 17,368.54. The S&P 500 lost 1.17 percent and, to 2,079.64 and the Nasdaq Composite dropped or 1.31 percent to 5,035.01. Companies that sell to China were hit hard, with heavy equipment maker Caterpillar losing 3.13 percent and Germany's Volkswagen dropping 4 percent. Energy and materials shares also tumbled on China demand concerns, with Exxon Mobil dropping 1.76 percent. The pan-European FTSEurofirst 300 index lost 1.68 percent, led lower...
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...[pic] Strategic Corporate Finance FIN501 Instructor Dr. Joshua Shackman In two to three paragraphs, explain why the concept of present value is so important for corporate finance and is often the very first topic taught in any finance class. Present Value is the process of determining what a cash flow to be received in the future is worth in today's dollars. Therefore, the Present Value of a future cash flow represents the amount of money today which, if invested at a particular interest rate, will grow to the amount of the future cash flow at that time in the future. The process of finding present values is called “Discounting” and the interest rate used to calculate present values is called the “discount rate”. Thus, the Present Value is an important concept in financial management. It can be used to compare investment alternatives and to solve problems involving loans, mortgages, leases, savings, and annuities. Time Value of Money is based on the concept that a dollar that you have today is worth more than the promise or expectation that you will receive a dollar in the future. Money that you hold today is worth more because you can invest it and earn interest. After all, you should receive some compensation for foregoing spending. For instance, you can invest your dollar for one year at a 6% annual interest rate and accumulate $1.06 at the end of the year. You can say that the future value of the dollar is $1.06 given a 6% interest rate and a one-year...
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...International Islamic University Faculty of Management Sciences Program Requirement Duration Undergraduate Core Courses Undergraduate Electives Undergraduate Specialization Project / One Additional course Internship Total Credits Hours 4 Years 60 24 12 3 6-8 Weeks 135 SCHEME OF STUDIES FOR BBA (HONS) 4 YEARS PROGRAM Summary General Courses Undergraduate Core Courses Undergraduate Electives Undergraduate Specialization Project / One Additional course Total Credit Hours 36 60 24 12 3 135 Undergraduate Core Courses S.NO C. CODE TITLE 1. ACT201 Principles of Accounting 2. ACT501 Financial Accounting 3. ACT301 Cost Accounting 4. FIN201 Business Finance 5. FIN505 Financial Institutions & Markets 6. FIN501 Financial Management 7. MKT201 Principles of Marketing 8. MKT507 Marketing Management 9. MGT202 Principles of Management 10. MGT502 Human Resource Management 11. MGT501 Organizational Behaviour 12. MGT507 Operations Management 13. MGT401 Entrepreneurship 14. MGT506 Business Research Methods 15. GEN501 Business Communication & Report Writing 16. ECO201 Principles of Microeconomics 17. ECO202 Principles of Macroeconomics 18. GEN303 Creative Thinking and Reasoning 19. FIN301 Islamic Banking & Finance 20. QNT501 Mathematics & Statistics for Business Sub Total Approved Scheme of Study BBA (Hons) 4 Year Program 60 GENERAL COURSES S.NO 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. C. CODE GEN103 GEN104 GEN110 GEN113 GEN111 GEN107 GeN108 MGT201 ITM201 GEN202 GEN301 GEN302...
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...Net present Value, Mergers and acquisitions FIN501 - Strategic Corporate Finance Net present Value, Mergers and acquisitions To start I would like to explain the difference and meaning of the present value of the future cash flows from an investment and the amount of investment. Present value of the expected cash flows is computed by discounting them at the required rate of return. For example, an investment of $1,000 today at 10 percent will yield $1,100 at the end of the year; therefore, the present value of $1,100 at the desired rate of return (10 percent) is $1,000. The amount of investment ($1,000 in this example) is deducted from this figure to arrive at net present value which here is zero ($1,000-$1,000). A zero net present value means the project repays original investment plus the required rate of return. A positive net present value means a better return, and a negative net present value means a worse return, than the return from zero net present value. It is one of the two discounted cash flow techniques (the other is internal rate of return) used in comparative appraisal of investment proposals where the flow of income varies over time (BusinessDictionary.com, 2013). Part I: Given that Google's cost of capital (discount rate) is 11%, below is the projected net present value using the following data which was provided; Year Cash Flow, (0) -$2,425,000, (1) 450,000, (2) 639,000, (3) 700,000, (4) 550,000, (5) 1,850,000. To calculate present value (PV)...
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