Current Ratio: Current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months. Formula to calculate current ratio is as follows; Current ratio = Current Assets / Current Liabilities From the results of Company G, we can find out that company G has week liquidity position. It is due to increase in current liabilities more than current assets. Current ratio is not only declining as compared to previous year but also below industrial
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- such as the New York Stock Exchange and the NASDAQ are secondary markets. The cash proceeds go to an investor rather than to the underlying company/entity directly. 5. Risk includes the possibility of losing some or all of the original investment. The greater the amount of risk that an investor is willing to take on, the greater the potential return. 6. Security is a fungible, negotiable financial instrument that represents some type of financial value of stocks, bonds, and other investments
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4. Martha Stewart’s Lost Reputation Discussion of ethical issues 1. What was the basis of Martha Stewart’s reputation? 2. Why did MSO’s stock price decline due to Martha Stewart’s loss of reputation? 3. Who is Martha Stewart’s target market? 4. What qualities were associated with the Martha Stewart brand, before the controversy? Which of these were affected by the accusations of insider trading, and how? How would you find out for sure? 5. What level of sales and profits would MSO have
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Professor Frydman BUAD 306 Homework #1 1. The separation of owners (shareholders) and managers in a corporation proves to have both advantages and disadvantages. An advantage of this separation is that owners can readily transfer shares of stock, and as a result, the stockholders in a corporation have limited liability for corporate debt. Essentially, owners are only at risk of losing the particular amount they invested in the corporation. A significant disadvantage of the separation of owners
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Recently, finance headlines have all been about the US government shutdown and debt ceiling. Last Oct. 1, the US experienced its 1st government shutdown in 17 years. Since the shutdown of Oct. 1, the US stock market had been down almost every day while global stock markets experienced a roller coaster ride. This changed last Thursday when a glimmer of hope started to surface. Over the weekend, American politicians engaged in marathon discussions to solve the US government shutdown and the US debt
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for WACC. WACC = wd*kd(1 - T) + wps * kps + wce * kcs wd = weight of debt, kd = cost of debt, T = tax rate, wps = weight preferred stock. kps = cost preferred stock, wce = weight common stock, kcs = cost common stock. Retained earnings and the sale of new common stock are both used in regard to common equity. 2) What are three methods for estimating common stock cost from retained earnings? Capital-asset-pricing-model (CAPM) approach Bond-yield-plus-premium approach Discounted cash flow
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from California to all the States, and from there to the east coast. * Apple’s failures * The success Apple has today did not just come magically. Many bumps and failures of products caused the company to lose money. * Shareholders/Stock * Much of Apple is owned by shareholders and without them the
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on-going acquisitions program had been aggressively ñnanced with debt. At year-end 1998, total debt stood at more than $2.3 billion—more than seven times the amount outstanding five years earlier. Loewen's common stock, which was simultaneously traded on the New York, Toronto, and Montreal stock exchanges, had ended the year at around $8 in New York, down from roughly $40at the end of 1996. Confronted
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RadioShack: Qualities vs. Qualifications As a 1st year MBA student undergoing the recruitment process, I have constantly dealt with the dilemma of determining the fine line between lying and embellishing. Often times, given the scarcity of jobs, candidates are obliged to exaggerate their skills. With predefined skills and experiences that companies look for, previous job descriptions are modified to reflect the traits that are sought after. Furthermore, the MBA setting where people seek to switch
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Company X has two million shares of common stock outstanding at a book value of $2 per share. The stock trades for $2.50 per share. It also has $1 million in face value of debt that trades at 120% of par. What is its ratio of debt to value for WACC purposes? $2 million shares ⋅ $2.50 = $5,000,000 $1 million debt ⋅ 20% = $1,200,000 Total Value = $6,200,000 [pic] 4. What is the after-tax cost of preferred stock that sells for $5 per share and offers a $0
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