Financing and investment are two major decision areas in a firm. In the financing decision the manager is concerned with determining the best financing mix or capital structure for his firm. Capital structure could have two effects. First, firms of the same risk class could possibly have higher cost of capital with higher leverage. Second, capital structure may affect the valuation of the firm, with more leveraged firms, being riskier, being valued lower than less leveraged firms. If we consider
Words: 1142 - Pages: 5
Synopsis and Objectives This case examines the question of financial leverage at California Pizza Kitchen (CPK) in July 2007. With a highly profitable business and an aversion to debt, CPK management is considering a debt-financed stock buyback program. The case is intended to provide an introduction to the Modigliani-Miller capital structure irrelevance propositions and the concept of debt tax shields. With the background of a pizza company, the case provides an engaging context to discuss
Words: 2393 - Pages: 10
Modern Corporate Finance FINE622 Professor: Dr. Adolfo de Motta Case: Massey Ferguson Due date: Sunday March 3rd Students: Chang, Kent #260474847 Itakura, Joseph #260532789 Prithweenarayana Bhat #260507101 Rizwan Ahmad # 260550158 Udagawa, Nao #260432352 Q1. Describe and assess the product-market and financial strategy Massey pursued through 1976. Where possible, compare Massey's strategy with those of its leading competitors. Massey Ferguson, a true multinational
Words: 2400 - Pages: 10
journal is available at www.emeraldinsight.com/0307-4358.htm Analysis of the effects of ESOP adoption on the company cost of capital Stoyu I. Ivanov Accounting and Finance Department, College of Business, San Jose State University, San Jose, California, USA, and ESOP adoption 173 Janis K. Zaima Accounting and Finance Department, San Jose State University, San Jose, California, USA Abstract Purpose – The purpose of this study is to examine whether employee stock ownership plans (ESOPs)
Words: 8393 - Pages: 34
Corporate Financial Management BA 7020 – Section 200 Fall 2012 Marriot Corporation [pic] Group 9 Timothy Muer Adnan Qureshi Valerie Schmidt Joshua Swartz December 16th, 2012 December 16th, 2012 Dan Cohrs Marriot Corporation Vice President of Project Finance RE: Marriott Corporation Consultant Summary Dear Mr. Cohrs, We are pleased to offer our consulting opinion in regards to the cost of capital, debt, and equity. We have reviewed and analyzed the industry
Words: 1398 - Pages: 6
2003 (4 times more debt than Equity!), except in the aftermath of the crisis in 2002 where the ratio was negative due to negative equity. This can be explaining by a strong in-debtment from France Telecom to make up for a decrease in earnings and to finance acquisitions. As a result, France Telecom appears heavily indebt. Regarding the ROCE (Return on Capital Employed), it is lower than the ROE but doesn’t suffer from the crisis: this indicates the ability of France Telecom to make up for the difficult
Words: 2726 - Pages: 11
Initial Public Offerings Jay R. Ritter Cordell Professor of Finance University of Florida Gainesville FL 32611-7168 (352) 846-2837 jritter@dale.cba.ufl.edu http://bear.cba.ufl.edu/ritter Warren Gorham & Lamont Handbook of Modern Finance Edited by Dennis Logue and James Seward reprinted (with modifications) in Contemporary Finance Digest Vol. 2, No. 1 (Spring 1998), pp. 5-30 This is the modified version. Abstract In the 1990s, thousands of firms have gone public around the world. This article
Words: 2814 - Pages: 12
MULTINATIONAL FINANCIAL MANAGEMENT Groupe 5 Case study ASPEN TECHNOLOGY INC.: Currency Hedging Review 1) What are Aspen Technology’s main exchange rate exposures? How does Aspen Tech’s business strategy give rise to these exposures as well as to the firm’s financing need? The main exchange rates exposures are: British pounds, Deutsch Mark, Japanese Yen and Belgian Francs. Aspen faces foreign currency risks due to sales and expenses in those foreign currencies. Expenses include R&D
Words: 669 - Pages: 3
Financial Officer (CFO) for Nationwide Express Courier Services Berhad. Throughout his career, he had worked in Permodalan Nasional Berhad (PNB), Permodalan Terengganu Berhad (PTB), Securities Comission Malaysia (SC) and Malaysian Industrial Development Finance Berhad (MIDF). An interview session was set with him on 2/12/2011 at his office in the headquarters of Nationwide Express Courier Services Berhad in Shah Alam, Selangor. 2.0 FINDINGS 2.1 Free Cash Flow In definition, FCF is the cash flow
Words: 2347 - Pages: 10
expenditure items can be prioritized. Payments of bills, which can be delayed, can be prearranged for the days with sufficient cash arrival. It is essential to buy stocks at the right time in right quantities. Cash flow forecast facilitates the Board of finances too (BusinessCaseStudies, n.d.). It can be
Words: 567 - Pages: 3
