Northern Caribbean University
College of Business and Hospitality Management
Group Assignment 1

An assignment in Partial Fulfillment of The requirements of the course:
FNCE 437: Risk Management and Insurance

Presented to:
Mr. John McAllister, MBA

Prepared by:
Mark Jackson – 60100164
Candece Hamilton - 18100252

Television station WMSD is located in a midwestern city of 1,750,000 people. The station is incorporated, with the majority of the stock owned by one family. The grandfather, age 68, who founded the station, has already begun to make gifts of the stock to other family members. His daughter, age 47, is currently the vice president and will manage the station her father retires or dies. The station is affiliated with one of the three national television networks.
WMSD has 156 employees. Of these, 20 appear on the air, 7 are managers or officers, and 129 are clerical, production, or marketing employees. The payroll for a recent year amounted to $43,550,000. WMSD’s assets include buildings and a transmission tower valued at $47.5million on the books, but with a replacement value of $62 to $64 million. The station’s equipment, including cameras, videotape machines, six autos, three trucks a leased helicopter, and sophisticated electronic equipment and computers, has a book value of $52.6million and a replacement cost of $73.5 million. In recent years, the station’s earnings after taxes were as: year 1, $58 million; year 2, $65 million; year3 $ 40million. The income was derived from selling commercial in the local network revenue. Interestingly, in recent years one sales representative was responsible for almost one-quarter of the local advertising revenue. WMSD is the second-ranked station in the market and has become aggressive in the past three years in trying to increase its market share. The station management has faced an uphill battle