Asian Journal of Technology & Management Research [ISSN: 2249 –0892] Vol. 01 – Issue: 01 (Jan - Jun 2011) CORPORATE RESTRUCTURING - A FINANCIAL STRATEGY Vikas Srivastava1 Ms. Ghausia Mushtaq2 ABSTRACT This paper serves the very purpose of defining the corporate restructuring as a financial strategy adopted towards the financial development and enhancement of an organization suffering from a major set back at any level of operation. Technological advancement and environmental or political
Words: 2710 - Pages: 11
for a price greater than the downround valuation and the new preferred stock gets a 400 percent return plus its share of the remaining equity while the common stock gets little or nothing, the directors may be sued personally for breach of fiduciary duty.(website: http://apps.americanbar.org/buslaw/blt/2003-05-06/blomberg.html) In this case, capitalization consist of multiple series of preferred stock while founders held the common stock, therefore it will be hard to secure financing. At first
Words: 278 - Pages: 2
by Allen Michel and Israel Shaked RJR Nabisco: A Case Study of a Complox Lovoragod Buyout Several features of RJR Nabisco made it a particularly attractive LBO candidate. Its operations exhibited moderate and consistent growth, required little capital investment and carried low debt levels. Its problems—a declining return on assets and falling inventory turnover—appeared fixable. And it offered significant break-up value. Valuing RJR's equity at the time of the LBO requires detailed knowledge
Words: 8011 - Pages: 33
Compute (i) Current assets (ii) Current liabilities (iii) Working capital, (iv) Shareholders’ equity for the corporation. (b) If the firm had a net income of $550,000 after taxes, what is the earning per share? (c) When the firm issued its common stock, what was the market price of the share? | | |Table 1. Balance Sheet Statement as of December 31,2009
Words: 1453 - Pages: 6
Ratio Analysis of Financial Statements | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | Working Capital Working capital is the excess of current assets over the current liabilities. It is calculated by deducting current liabilities from current assets. Working capital = Current assets - Current liabilities 2005 | 2006 | Current assets | Current liabilities |
Words: 2362 - Pages: 10
(PTFC) has a target capital structure of 20% debt, 10% preferred stock, and 70% common equity. Currently PTFC has a capital structure of 70% debt, 10% preferred stock, and 80% common stock. The after tax cost of debt is 4.5%. The preferred stock has a par value of $100 per share, a $5 per share dividend, and a market price of $70 per share. The common stock of PTFC trades at $97 per share and has a projected dividend (D1) of $2.60. The stock price and dividend are expected to continue to grow at
Words: 894 - Pages: 4
information and how information is interpreted, both personally and in business. Efficient market: “Market where all pertinent information is available to all participants at the same time, and where prices respond immediately to available information. Stock markets are considered the best examples of efficient markets” (Business Dictionary, 2013 p. 1.) · Primary Market: A market that issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or
Words: 1370 - Pages: 6
also limited liability. Unfortunately, corporations are subject to double taxation and have to follow many government regulations. C- Corporations sell stock to the public to help the firm grow. A corporation’s ability to grow depends on its interaction with financial markets when ti comes to borrowing capital, investing, and selling stock. An agency problem happens when the stockholders are partial owners to a company and may make decision based on their best individual interests and not the
Words: 907 - Pages: 4
(PTFC) has a target capital structure of 20% debt, 10% preferred stock, and 70% common equity. Currently PTFC has a capital structure of 70% debt, 10% preferred stock, and 80% common stock. The after tax cost of debt is 4.5%. The preferred stock has a par value of $100 per share, a $5 per share dividend, and a market price of $70 per share. The common stock of PTFC trades at $97 per share and has a projected dividend (D1) of $2.60. The stock price and dividend are expected to continue to grow at
Words: 894 - Pages: 4
| (TCO G) Beranek Corp. has $410,000 of assets, and it uses no debt—it is financed only with common equity. The new CFO wants to employ enough debt to bring the debt to assets ratio to 40%, using the proceeds from the borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio? | | | Student Answer: | | $155,800 | | | | $164,000 | | Instructor Explanation: | b: 40% × $410,000 = $164,000. | | | Question 4. | Question
Words: 1828 - Pages: 8
