...Facebook Prospectus Project Review the Facebook Prospectus and answer the following questions. 1. How many total shares of stock are being offered by Facebook? -180,000,00 2. How many shares are new shares, and how many are existing shares being sold by current shareholders? -421,233,615 3. Describe the classes of shares, and the voting rights the shares will have. * Shares of Class A common stock are entitled to one vote per share. * Shares of Class B common stock are entitled to ten votes per share 4. Which class of stockholders will hold control of the company? -Class B 5. Does any one shareholder have control of the company? If so…who? -A dual class common stock holder 6. On which exchange will Facebook be traded? NYSE 7. At what price is the stock offered to the public? - $38.00 per share 8. What is the Underwriters Commission? * Underwriting commission is the compensation that an underwriter receives for placing a new issue with investors. It is the fee which an investment banker charges for underwriting a security issue 9. What are the net proceeds expected by Facebook. - $998 million 10. What investment banks make up the Underwriting Syndicate? * ALLEN & COMPANY LLC CITIGROUP CREDIT SUISSE * DEUTSCHE BANK SECURITIES RBC CAPITAL MARKETS * WELLS FARGOSECURITIE 11. Review the risk factors. Which 3 or 4 cause you the greatest concern? If we fail to retain existing users...
Words: 496 - Pages: 2
...deductions to reflect the corporation’s operating losses. The commissioner disallowed deductions above the $10,000 bases from original investment. The appellants contend that the adjusted basis in their stock should be increased to reflect a $300,000 loan. The loan was obtained by VAFLA from bank and was guaranteed by the shareholder-guarantors. VAFLA made all of the loan payments, principals and interest to the bank and the appellants did not. Neither VAFLA nor the shareholder-guarantors treated the loan as constructive income taxable to the shareholder-guarantors. Because the bank lent the loan to the shareholder-guarantors and then they contributed the funds to the corporation, the appellants present that the loan is a capital contribution from appellants to VAFLA. If it is characterized as equity, they should be entitled to add a pro rata share of the loan to their adjusted basis. The Tax Court disallowed such increase in basis. Issues: The issue is whether the shareholder-guarantors should add a pro rata share of the loan to their adjusted basis and deduct operating losses to the extent of the basis. Court holdings: U.S Court of Appeals affirmed the Tax Court decision, concluding that shareholders’ basis in stock wasn’t increased by personal guarantees given as collateral and proportionate shares of NOL was limited to initial investment. Analysis and Discussion: To increase the basis in the stock of an S corporation, there must be an economic outlay on the part of...
Words: 317 - Pages: 2
...For around 25 shares of Re 1 of CBoP, an investor will get one share of Rs 10 of HDFC Bank. In last two days, share price of CBoP moved from Rs 49.85 on Wednesday to Rs 56.40 on Friday. However, it seems, investors of HDFC Bank did not like the development. The share price of HDFC Bank on Thursday moved up from Rs 1,534.50 to Rs 1,543. But on Friday, it fell sharply to Rs 1,475. Prior to this, in August 2007, CBoP was merged with Lord Krishna Bank. * 2008 HDFC Bank acquired Centurion Bank of Punjab. The swap ratio is expected to be around 1:25-30,” said a banking source. The merger will make HDFC Bank the country’s seventh largest bank after Bank of India (BoI) and ahead of IDBI Bank, from the current 10th position. The merger talks between the two banks began in January 2008 after the principal shareholders of CBoP – Bank Muscat with 14.02 per cent stake, Sabre Capital with 3.48 per cent stake and Kephinance Investment (Mauritius) with 6.13 per cent — decided to exit. 1) HDFC Bank Board on 25th February 2008 approved the acquisition of Centurion Bank of Punjab (CBoP) for Rs 9,510 crore. BENEFITS FROM THIS DEAL * The HDFC Bank, which currently spans India with its chain of 746 branches, will add to itself 394 branches of the CBoP to itself, to make its network bigger and stronger. The merger talks between the two banks began in January 2008, after the principal shareholders of CBoP – Bank Muscat with 14.02 per cent stake, Sabre Capital with 3.48 per cent...
Words: 948 - Pages: 4
...operating. Money can come from in many way depend on the firm credit to finance market, their idea etc. Fist way of rising fund is to find investor, by selling firm idea and expressing how firm can make money back. Issuing stock or IPO is a famous way of getting huge amount of finance but in order to does so company need to pass certain regulation. Issuing a bond is also common among big firm since customer know that the odd of company going bankrupt is very low Discuss why each of the following may not be appropriate corporate goals? 1) Increase market share. Increase market share may be a good idea but it may harm the firm if it needs to spend money to do so like advertising or reducing cost so it can penetrate into the market. Especially where it is competitive industry which will require a lot more money. 2) Minimize costs. Minimize cost may gain company customer or more market share but doing so will reduce the firm profit and may hurt the firm brand image 3) Expand profit. Expanding profit should not be firm goal because firm cannot clarify which year they want to expand their profit, thus it should be every year. Investing more in the profit may be a good long term strategy but this will reduce a return to shareholder. However as a value investor I love this idea. Describe the difference between Corporation and Sole Proprietorship. [Hint: Please review our lecture notes slides and answer from four categories: Who owns the business...
Words: 645 - Pages: 3
...Question 1: Pan-Europa must strengthen the right hand side of the balance sheet now that the price war is over. Summary of the financial figures in Table Exhibit 2 show that the gross sales are almost stagnant over the 3-year period, earnings per share have steadily declined during the same time period, and the market value of shareholder’s equity is at the moment lower than its actual book value. Furthermore, the net income is also down over this 3-year period, and this is where Pan-Europa needs to focus its efforts (capital projects should assist in this effort). Earnings per share, dividends, and shareholders’ equity all fuelled by increase in net income will become critically important to the company and its shareholders in this coming year. Increase in net income would in turn strengthen the shareholders’ equity, earnings per share and dividends, and this would discourage buying shares by those considering a hostile takeover. Trudi Lauf as a proponent of reducing leverage on the balance sheet and understanding the shareholders anxiety should lead the way of Pan-Europa. ___________________________________________________________________________ Question 2: There are three NPV – NPV at Corp WACC (10,5%), NPV at minimum ROR and equivalent annuity. Ranking all projects against each of this category provides slightly different results. However, I used NPV at Corp WACC (10,5%) as this includes the most recent estimated weighted-average cost of capital for Pan-Europa. The results...
Words: 382 - Pages: 2
...Strategic investment: own more than an passive amount, not enough to control, has power to participate in financial and operational decision of investee IAS28. Classification require professional judgement. * Presentation of board of directors * Interco transaction and relationship * Who own the other shares * Any debt financing intermingled * Sharing technology and patent * Participation in policy making process Investor need to disclose share of investment income, * Also disc, opns * Error correction * Acct policy changes, * Capital transaction included amount in OCI Have influence or not : 20% Users and objectives 1. Public shareholder: a. investors are interested in the performance of the company b. owner: tony Antonio: the liquidation of the company, if its performing well and be able to generate profit. Ability to distribute dividend. 2. Government/CRA: due to the variety of the investment, if it records the investment recognize it properly. Prepare consolidated financial statement under necessary circumstance. Report the income tax and deferral properly. Constraints: 1. IFRS since it becomes public in 2005 Identify issues * Bach Burgers Inc: 80% which is more than passive amount, under IAS28, Teresa;Antonio’s wife has power to participate financial and operational decision. * One of the 12 board of directors * 20% of the shares is owned by other 11 directors...
Words: 609 - Pages: 3
...the decision as to what method would be the best for financing of my business. Borrowing money from the bank, selling the supply, or licensing my product; are all selection I that are essential to be taken into to deliberate and examine prior to reaching the finalized conclusion. For the subsidy of my business, the best legal form of business I have decided upon, marketing stocks would be the finest for the corporation. In corporation stock is a minor portion of proprietorship. The proprietorship is divided into small portions are identified as shares. To establish how much of the business each individually shareholder maintains, shares are purchased and retailed to any person that wants it. If a company is doing well with the stock market, the cost of the share would be raised. If the business was not doing well, with their stock market, the cost of the share would drop significantly. Fundamentally, when shareholders possess more shares, clearly their profits will be increased as well as the quantity of significant administration judgments that would have to be constructed. With the absence of management understanding that I have,...
Words: 1129 - Pages: 5
...Some investors have warned that Marc Bolland who leads retailer Marks and Spencer (M&S) will face renewed scrutiny if its Christmas and New Year trading figures to be released next week disappoints the market, the Financial Times reported. The report cited the offloading of UK-based Standard Life Investments' share of the retailer during the past six months, presumably due to concerns over the performance of M&S. The shares sold by the Standard Life, one of the largest fund management groups in UK, were substantial: from holding over 2% of the company's shares as the 11th largest shareholder of the retailer, Standard Life Investments now holds an "underweight" position of only 1.43%, the report said. The call of other investors is for M&S to begin delivering, especially in clothing where the past few months placed its overhauled women's wear range under crucial test. One of the investors of M&S was blunt when telling FT about the vulnerability of Bolland's position. The report quoted the investor as saying, "Of all the retail chief executives, Mr Bolland's position is possibly the most vulnerable. We would not start urging his resignation at this stage, but if next week's results are weak and the group fails to tackle its problems on clothing over the next six months, then his position will come under pressure." Another investor told the FT that they have not been pleased with the retailer's performance. The investor added that Bolland had made plenty of promises but...
Words: 320 - Pages: 2
...Define the cost and equity methods or accounting for an investment. Equity method of accounting of investment is the accounting of investment in which value of each stock/share is counted based on the book value of the stock as reported by the investee corporation. Cost method of accounting of investment is the accounting method in which the purchase price of the stock is taken as the value of the investment. Both are used to report financial assets, liabilities and give and are options available to account for investment holdings. Under the cost method, equity securities with readily determinable fair values must be adjusted at year-end under FASB statement 115. The investor will then recognize income from the investment when the issuer as a dividend distributes income. The cost method is utilized when insignificant influence of the investor exists. The equity method is which the value of each stock or share is counted based on the book value of the sock and is reported by the investee corporation. Under what circumstances would you use the cost or equity method of accounting for an investment? The equity method of accounting treatment of investment is used when the investor in the corporation is able to exercise significant control over the operation and policies of the corporation i.e., when the investor owns at least 20% of voting stock on the corporation, then equity method of accounting treatment is used. Furthermore, The equity method is a method used...
Words: 491 - Pages: 2
...The role of the financial manager has in maximizing shareholders value is key to the achieving the goals of the shareholders. The financial manager performs double duty working toward achieving profits for the company and optimizing the shareholders value. The flexibility of having the ability to hear viewpoints from different angles to achieve the goals of both the shareholders and the company’s manager. Today’s financial manager must have the skills and strength to evaluate and assess risks to help their company maintain a competitive edge. The responsible of the financial manager in maximizing shareholders and use real-time financial information to take advantage of the latest opportunity to capitalize on an investment. According to the text the financial managers works to achieve the goals of shareholders because shareholders are the owners of the company that employs the financial manager. This can give rise to conflict when a manager makes decision because of the needed to make decisions based on shareholders approval and what is best for the company ongoing success. Sometimes the goals of shareholders can tempt the financial manager to make unethical decision in managers attempt to maximize the goals of the shareholder value. Other times companies will have a disregard of shareholders values and not only disregard reducing expenses but foster an environment where financial abuse takes place from renting luxury cars to doing business at the most expensive...
Words: 738 - Pages: 3
...publicly held company. NGR paid cash plus common stock that, after issuance, would be equal to roughly 15% of NGR’s outstanding shares, which would in turn make Major Motors the largest shareholder by a considerable margin. The question resulting from this transaction is whether or not the equity method must be applied to Major Motors’ 15% interest in NGR. After reviewing the appropriate accounting literature, we have determined that the equity method is, in fact, appropriate for Major Motors’ interest in NGR under FASB ASC 323, Investments—Equity Method and Joint Ventures. According to accounting literature, Major Motors meets the requirements for applying the equity method. If an investor holds significant influence in an investee, then using the equity method to account for the investment would be the most appropriate. FASB ASC 323-10-15-6 outlines the criteria for significant influence: a. Representation on the board of directors b. Participation in policy-making processes c. Material intra-entity transactions d. Interchange of managerial personnel e. Technological dependency f. Extent of ownership by an investor in relation to the concentration of other shareholdings. Major Motors satisfies three of the six criteria pertaining to significant influence above. Through the deal, Major Motors will hold 15% of NGR’s common shares. Although this is not the 20% minimum needed for the equity method as given in FASB ASC 323-10-15-8, Major Motors will become...
Words: 840 - Pages: 4
...or provide and answer with the question included. Using your annual reports, answer the following questions: 1. Does the company issue bonds? Explain in DETAIL (interest rates, payments, amortization of premiums/discounts, amounts remaining, etc.). CVS issued two $1.25 billion portions of 2.25 percent, five-year notes at a relative yield of 85 basis points more than similar-maturity Treasuries and 4 percent, 10-year securities at a spread of 125 basis points, according to data compiled by Bloomberg. The company also sold $750 million slices of 1.2 percent, three-year debt at 65 basis points and 5.3 percent, 30-year bonds at 145. 2. Explain in detail the various types of stock the company sells. Include par values, shares, amounts, etc. 3. Does the company have treasury stock? Does it use the cost or par value method to record the transactions? 4. Does the company use stock warrants? Explain in detail. 5. Does the company use stock options? Explain in detail. 6. What types of dividends does the company pay? Explain in detail. Include amounts, dates, etc. |Declared |Ex-Dividend |Record |Payable |Amount |Type | |03-06-2014 |04-18-2014 |04-22-2014 |05-02-2014 |$0.275000 |Regular Cash | |12-18-2013 |01-17-2014 ...
Words: 741 - Pages: 3
...Stocks and Bonds People all over the world purchase stocks and bonds everyday form many different companies. A person’s financial goals, business interests, or current wealth are factors in helping them decide how much to invest in stocks or when to purchase bonds. The main difference between stocks and bonds; is stocks equal equity while bonds equal debt. A person buying stock in a company usually has a desire to own part of that corporation or business, whereas a person buying bonds will become a creditor to that company and usually has wants no decision making responsibilities. Apple, Inc. is one of the worlds richest companies and its stock prices has had a roller-coaster ride since Steve Jobs and Steve Wozniak founded it in 1976. On the other hand, the purchase of U.S. Treasury Bonds by bondholders has had a long history of helping America in the country’s times of need, especially during wars and other financial recessions. Buying bonds has also helped many Americans save for their retirement years or helped put their children through college. Apple began in a garage when both men had to sell their personal items and take out loans just to fulfill their first order of the Apple 1 computers they sold. Since then Apple has become one of the largest revenue companies in the world and is changing people’s lives everyday with their technology and products. Just like many other companies in the world Apple’s stock has had both good and bad years over the last twenty years,...
Words: 1126 - Pages: 5
...only £35.90 is borrowed money. This could result in the potential for further borrowing because the ratio is very low. The higher the level of borrowing, the higher the risks to a business, since the payment interest and repayment of debts are not optional in the same way as dividends. The ratio indicates that a significant proportion of the 14 million could be borrowed, as Out and About seem to be a well-established business that would be financially stable to finance its activities using debt. Out and About plc could raise their capital because the gearing uses long-term debt, which is normally cheap, and reduces the amount that shareholders have to interest in the business. An advantage is that it will reduce interest payments, so more investment can occur elsewhere and the firm can have more cash flow to take on bigger and potentially more profitable projects. This would be helpful in the consideration of extending and diversifying their business. However, the poor profitability and liquidity problems could deter potential creditors. The current ratio is 0.87:1 and the acid test is 0.47:1. This shows significant liquidity problems, which further relates to the point above. Furthermore, the stock turnover is 2.14 or 170 days. This is very low for this type of business. The quicker a business turns over its stocks, the better. But, it is more important to do that profitably rather than sell stocks at a low gross profit margin or worse at a loss. This could be a problem when...
Words: 740 - Pages: 3
...manage Robust directly instead of using the original management. The new management was not familiar with the Chinese Beverage Market and Robust struggled, resulting in its milk and tea products almost disappearing from the markets. Wahaha was a company established by Zong Qinghou in 1987 that sold a nutritional drink for kids. A joint venture was formed in 1996 between Danone Group and Wahaha Group. The structure of the joint venture (JV) consisted of three participants: Hangzhou Wahaha Food Group, Danone Group and Bai Fu Qin (Baifu). The Wahaha Group owned 49% of the shares. Whereas, the Danone Group and Baifu joint forces and formed Jin Jia Investment (Jinjia), a Singapore corporation. This corporation owned 51% of the shares. Since 1997, Wahaha had set up many subsidiaries and the JV allowed for five new subsidiaries to be formed that attracted big investments, allowing Wahaha to use these investment funds to buy world-class advanced production lines. The JV came across many issues that...
Words: 990 - Pages: 4
