Zach Savidge [Ying Jiang] Hugo Ou [Gabriel La Spada] ECO 363 4/13/2014 Swedish Match Case 1. The company will save 4.5%×4,000,000,000×28%= SEK 50,400,000 annually. We assume the debt Swedish Match issues is a 10-year maturity coupon bond as the average BBB corporate bond (the CFO believes Swedish Match will receive a BBB+ rating) with the yield closest to that of Swedish Match’s debt is the 10-year maturity. Moreover, we do not assume that this debt will be refinanced into perpetuity
Words: 1834 - Pages: 8
CHAPTER 14 CAPITAL STRUCTURE: BASIC CONCEPTS Answers to Concept Questions 1. Assumptions of the Modigliani-Miller theory in a world without taxes: 1) Individuals can borrow at the same interest rate at which the firm borrows. Since investors can purchase securities on margin, an individual’s effective interest rate is probably no higher than that for a firm. Therefore, this assumption is reasonable when applying MM’s theory to the real world. If a firm were able to borrow at a rate lower
Words: 7128 - Pages: 29
What is the new market value? Is there any gains or losses? Prepare related journal entry. Chapter 18 * Understand the following concepts and the connections between them: authorized shares, issued shares, outstanding shares and treasury stocks. * How do we account for stock issuance and repurchase of stock? * What is stock split? * How does stock
Words: 361 - Pages: 2
narrow in price range. Internet Information The Corporate Website 1. What is the internet address of the corporation? www.target.com 2. Which items appear in the part of the website that relates to investors? * 2014 Annual Report * Dividend & Stock Split History * Proxy Statement * Stock Quote * Financial News * Stock Chart * Upcoming Events * Investor Contacts * Corporate Responsibility * Board of Directors & Executive Officers * Responsible Employer
Words: 4103 - Pages: 17
separately. Then, by analyzing firm’s previous and current circumstance including the change of the CEO, some considerable changes in Apple and the underlying reasons, are worth to discuss. This report concludes that the current payout policy—paying dividends along with the buyback plan—is more suitable for current company. Finally, implications of the new policy will be analyzed through using relevant and irrelevant theories as well as relevant data of competitors in the same industry. This report predicts
Words: 2316 - Pages: 10
following statements about dividend policies is CORRECT? 14.4 pages 567 - 568 e. The clientele effect suggests that companies should follow a stable dividend policy. 2. Which of the following statements is CORRECT? 14.2 pages 563 c. Stock repurchases can be used by a firm that wants to increase its debt ratio. 3. Which of the following statements is CORRECT? 14.13 pages 587 e. If a firm’s stock price is quite high relative to most stocks—say $500 per share—then it can declare
Words: 424 - Pages: 2
The Price of Expansion Executive Summary This report equips our audience with broader approaches to the case of Genzyme and Relational Investor. After an examination of existing issues and accountability of companies operating framework, it can be concluded that companies have a primary responsibility to their shareholders. Nevertheless, this case has a lot of nuances that are relevant to the analysis that we will point out. This analysis is expected to showcase for upcoming and existing
Words: 1512 - Pages: 7
Equity Value Book Value (BV) How to Calculate It Shares Outstanding * Share Price Shareholders’ Equity(1) What It Means How much are we worth? How much are we worth according to our assets rather than the market? How much are we worth to everyone except preferred shareholders? How much are we worth according to our incomeproducing assets? How much money do we make after taxes? How much money is left to pass on to common shareholders? How much in dividends could we potentially issue to each common shareholder
Words: 1938 - Pages: 8
with greater scope for expropriation by the parent firm are more overpriced at listing, and minority shareholders fare poorly after listing as mispricing corrects. Parent firms often repurchase subsidiaries at large discounts to valuations at the time of listing and experience positive abnormal returns when repurchases are announced. * We thank Malcolm Baker, Mihir Desai, Masako Egawa, Alp Ercil, Yasushi Hamao, Sam Hanson, Naoki
Words: 16090 - Pages: 65
Name: Instructor’s Name: Course Title: Date: BYP13-1 Financial Reporting Problem PepsiCo, Inc. (a) Our financial statements include the consolidated accounts of PepsiCo, Inc. and the affiliates that we control. In addition, we include our share of the results of certain other affiliates based on our economic ownership interest. We do not control these other affiliates, as our ownership in these other affiliates is generally less than 50%. Equity income or loss from our anchor bottlers is recorded
Words: 2643 - Pages: 11
