Question 1
question also can be seen in the FILES You are recruited by the founder of a start-up company to advise her on the optimal capital structure for her company. The sole project of the company will require an initial outlay (at date 0) of ?150,000, and is expected to generate a single cash flow in one year (at date 1). The project cash flow at date 1 will take one of two equally likely values depending on the state of the economy: if the economy is strong, then the cash flow will be high at ?300,000; in a weak economy the cash flow will be only ?140,000. Based on evidence of companies with comparable projects, the project's cost of capital has been estimated as 10% per annum. The rate of return on effectively risk-free treasury securities is expected to remain constant over the project life at 5% per annum. . a) Suppose the entrepreneur finances the project using only equity (zero debt). Assuming that the company operates in perfect capital markets, calculate the market value of (unlevered) equity at date 0. . b) Now suppose that instead of using all-equity financing as in part a), the entrepreneur finances ?50,000 of the initial project outlay using debt and the rest using equity. The company promises to repay the debt along with a single interest payment of ?2,500 at date 1, and the company can borrow the ?50,000 of debt at a cost of debt capital of 5% per annum. Assuming that the company operates in perfect capital markets, calculate the current market value at date 0 of the ?levered equity? of this company. . c) Compare and contrast the expected return to shareholders in the all-equity financed company in part a) and in the levered company of part b), and explain the difference (if any). . d) Suppose the company has to pay corporate tax at the statutory rate of 35% per annum. All other assumptions of perfect capital markets continue to hold. Compare and contrast the current market values (at date 0) of the all- equity financed firm of part a) and of the levered company of part b). Explain the difference (if any). e) Now suppose corporate tax is abolished and the company again operates in perfect capital markets. The entrepreneur decides to issue zero-coupon debt with a face value of ?150,000 that matures at date 1. The details of the project are as in part a), and the risk-free rate is 5% per annum. i. Explain how and why the equity and debt of the levered company can be interpreted and valued as options, and how to determine the underlying asset(s), the maturities, the strike prices and the payoffs at maturity to the holders of these options. ii. Using the option framework of the previous part e)i., briefly outline the main agency conflicts between shareholders and debtholders. ? iii. Using the replicating-portfolio approach in the binomial model and put- call parity, calculate the values of the call and put options in part e)i. For the purpose of your calculation, assume the firm pays no dividends, and there is just a single share outstanding (so the share price equals the market value of the firm?s assets). Clearly show your workings and explain each step in your calculation.
Question 2
Rachel, my deadline for this to be submitted is seriously in 4 hours. Knowing this I cannot increase your deadline 20 hours. Will you not be able to help me? It does not have to be perfect. I would be happy with at "B" Paper. You asked: """"Amazon is one of a number of companies (Sony is another) which have developed electronic devices which deliver books, newspapers and other printed matter without using paper. This is a growing market, with technology evolving rapidly. In the not too distant future it is thought that mobile phones and other devices will perform a similar service. How though are such devices priced? Case Question Write a 2-3 page paper in which you answer the following case question: Amazon's Kindle 2.0 was priced at $359 and delivery started in February 2009. The price was dropped to $300 in July after a newer model with a larger screen, the Kindle DX, was launched, priced at over $400. In January 2010 Apple announced the launch of the iPad, the lowest priced version of which was to sell for $499. Assume that you are in charge of the pricing of the Kindle models. Explain what methods are open to you to price your products and the factors that you should take into account in deciding on these prices. Then assume that you are responsible for deciding the future pricing of Kindle models over the next year. What prices are being charged now and what would you recommend Amazon charge? Why? In answering this case question aim to demonstrate your learning not only of the materials from MOD05, but also those from MOD01-04. Ensure that you repeat the case question in full and verbatim on the title page of your submission. Excluding your title and reference pages, your paper should be no more than three pages long. Place any detailed calculations in an appendix, (not counted in the page limit), after the references. Please submit your case for grading by the end of this module. CASE EXPECTATIONS It is expected that you will use information from the background readings as well as the case articles and any good quality sources you can find. Please cite all sources and provide a reference list at the end of the paper. The following will be assessed in particular: Your demonstrated understanding of the marketing concepts central to the case question. Your demonstrated understanding of factors related to the development of an effective pricing strategy through the analysis you conduct in the context of the case. The criteria used for assessment will be those explained on the MOD01 Home page, namely: Focus. Breadth. Depth. Critical thinking. Effective and appropriate communication skills. Case-Related Articles and Links Anonymous, (2010) iPad costs give Apple room to cut prices, says researcher. (2010, February). Network World Middle East. February 11. Retrieved February 22, 2010, from ProQuest Computing. (Document ID: 1962300801). Anonymous, 2009. Business: Well read; Electronic-book readers. The Economist. Feb 14. 390:8618. Viewed using the Proquest database February 20, 2010. Anonymous, 2009. AMAZON'S KINDLE 2 The Independent. Feb 13. Viewed using the Proquest database February 20, 2010. Anonymous, 2009. Amazon.com; Introducing Amazon Kindle 2. Telecommunications Weekly. Feb 25. Viewed using the Proquest database February 20, 2010. Anonymous, 2009. National Federation of the Blind; National Federation of the Blind Responds to Authors Guild Statement on the Amazon Kindle 2. Life Science Weekly. Feb 24. Viewed using the Proquest database February 20, 2010. MacMillan D. 2009. Amazon's Kindle 2: No iPod for Books. Business Week Online). Feb 10. Viewed using the Proquest database February 20, 2010. Amazon.com 2009 Kindle 2: Amazon's New Wireless Reading Device (Latest Generation). Viewed at Amazon.com on February 20, 2010. (If you have access to the Amazon.com website, you should read the consumer reviews there). Ryan Kim. (2009, August 10). New market may be turning a page. San Francisco Chronicle,p. DC.1. Retrieved February 20, 2010, from ProQuest Newsstand. (Document ID: 1824378911). Patel, N. (2009, June 19), Amazon Kindle DX review, viewed at http://www.engadget.com/2009/06/19/kindle-dx-review February 20, 2010. "
Question 3
"Wal-Mart Stores, Inc. operates retail stores in various retailing formats in all 50 states in the United States. The company's mass merchandising operations serve its customers primarily through the operations of three segments. The Wal-Mart Stores segment includes its discount stores, Super-centers, and Neighborhood Markets in the United States. The SAM's Clubs segment include the warehouse membership clubs in the United States. The International segment includes all of its operations in Argentina, Brazil, Canada, China, Japan, Germany, Korea, Mexico, Puerto Rico and the United Kingdom. The company's subsidiary ,McLane Company, Inc. provides products and distribution services to retail industry and institutional foodservice customers. Information taken from Wal-Mart's fiscal year 2003 annual report follows: The Company and certain of its subsidiaries have long-term leases for stores and equipment. Rental (including for certain leases, amounts applicable to taxes, insurance, maintenance, maintenance, other operating expenses and contingent rentals) under all operating leases were $1,091 million, $1,043 million, and $893 million in 2003, 2002, and 2001, respectively. Aggregate minimum annual rentals at January 31, 2003, under no cancelable leases are as follows ( in millions): Note 9: Commitments Fiscal Year Operating Leases Capital Leases 2004 $589 $589 2005 576 431 2006 560 428 2007 546 419 2008 515 412 Thereafter 5202 3152 Total minimum-rentals $7,988 A Less estimated rentals $57 Net minimum lease payments B Less imputed interest at rates ranging from 6.1% to 14.0% C Present value of minimum lease payments D Excerpts from Wal-Mart's 2003 consolidated balance sheet follow: ($ in millions) 1/31/2003 Liabilities and Shareholders' Equity: Current Liabilities Commercial paper $1,079 Accounts Payable 17,140 Accrued Liabilities 8,945 Accrued income taxes 739 Long-term debt due within one year 4,538 Obligations under capital leases due within one year 176 Total Current Liabilities $32,617 Long-term debt $16,607 Long-term obligations under capital leases 3,001 Deferred income taxes and other 1,761 Total Long-term Liabilities $21,369 Required: 1. Solve for the unknowns (A, B, C, and D) in Note 9 2. Make the journal entry to account for Wal-Mart's fiscal year 2004 capital lease payment (Ignore allocating the executory cost portion because there is insufficient information to do so.) 3. Assume that the amount of Wal-Mart's operating lease payment due each year after 2008 its equal and is paid at the end a of each fiscal year. Assume that all of these leases terminate at the end of 2010. Using an interest rate of 8%, calculate the present value of the operating lease payments at January 31, 2003. C12-2. Wal-Mart: Lessee reporting - Capital versus operating lease treatment - Comprehensive Requirement 1: A. Total minimum rentals is just the sum of the annual payments of capital leases: 2004 2005 2006 2007 2008 2009 Total Sum of Annual Payments for Capital Leases 0 0 0 0 0 0 0 Total B. Net minimum lease payments is equal to: 0 Executory Costs 0 Net Minimum Lease Payments 0 C. Amount representing interest is equal to: Net Minimum Lease Payments 0 Present Value of Minimum Lease Payments 0 Interest 0 D. Present value of minimum lease payments: Total Present Value of Minimum Lease Payments 0 Obligations Under Capital Leases Due in 1 Year 0 Long-Term Obligations Under Capital Leases 0 Requirement 2: DR Interest expense (plug) $- DR Obligation under capital leases $- CR Cash $- a From current liability section of balance sheet. Represents portion of next lease payment that goes toward reduction of principal of lease obligation. (Note: Ignores the executory cost portion.) Requirement 3: The following table presents the calculation of the present value of the operating lease payments based on an interest rate of 8%. Year Operating Lease Payment PV Factor PV of Operating Lease at 8% 8% 2004 $- 0.92593 $- 2005 $- 0.85734 $- 2006 $- 0.79383 $- 2007 $- 0.73503 $- 2008 $- 0.68058 $- 2009 $- 0.63017 $- 2010 $- 0.58349 $- 2011 $- 0.54027 $- 2012 $- 0.50025 $- 2013 $- 0.46319 $- 2014 $- 0.42888 $- 2015 $- 0.39711 $- 2016 $- 0.3677 $- 2017 $- 0.34046 $- 2018 $- 0.31524 $- 2019 $- 0.29189 $- Total PV $-,sorry I need it tonight. Thanks for your help anyway,yes unless another tutor could answer in the specified time frame
Question 4
THE FOLLOWING QUESTIONS ARE FOR A HUMAN RESOURCE INFORMATION SYSTEMS CLASS:1. HR has moved from an administrative function to a transformational function. This change is based on automating HR functions through an HRIS system. Explain how HR evolved throughtout this process. Describe the trends that HR is facing, and will face, through technology. 2. Organizations are now relying more and more on HR?s ability to provide employee data. Explain how HR is now able to provide the organization employee information through technology and move towards meeting organizational goals. Provide an example. 3. Keeping track of employee information has been a laborious task of HR. Through technology, this task has been automated in a variety of ways. Describe how obtaining employee information through technology has now included HR as a strategic partner within the business. 4. As HR continues to migrate to being a strategic partner within a business, it is also involving employees in this transition, to allow them more control over their work lives. Explain in detail how web-based HR systems assist with employee retention. 5. HRIS systems have allowed HR to automate a variety of functions, including performance management, training, employee development staffing, compensation, and benefits among others. Choose two of these HR functions listed, and describe how technology has created a more efficient process for this function. Provide an example of each.,These responses to each questions only need to be 200 words or less and cite references if used. Thanks!,These responses to each questions only need to be 200 words or less and cite references if used.
Question 5
11. Typical Inc. is a typical large publicly traded corporation that was incorporated in 1990. Which of the following individuals is most likely employed by Typical Inc. to manage its day-to-day affairs? a. Typical Inc.?s President b. Typical Inc.?s Incorporator c. Typical Inc.?s Outside Director d. Typical Inc.?s Registered Agent 12. Assume the facts stated in the prior question. Typical Inc.?s current directors were most likely elected by its: a. Incorporators b. Registered Agents c. Officers d. Shareholders 13. Cool Ventures Inc. was incorporated in the state of South Carolina. In Florida, Cool Ventures Inc. is referred to as: a. A reciprocal corporation b. A domestic corporation c. A foreign corporation d. An alien corporation 14. Which of the following is MOST ACCURATE considering ORX Resources, Inc. v. MBW Exploration, LLC? a. Business owners are never personally liable if the entity in question was formed as a Corporation (instead of an LLC) b. Members of an LLC can be personally liable if a court pierces the ?LLC veil? to prevent the use of the LLC form to default creditors c. Members of an LLC are never personally liable d. Members of an LLC are always personally liable 15. Which of the following documents is most likely NOT filed with a SOS? a. An LLC?s Operating Agreement b. An LLC?s Articles of Organization c. A corporation?s Articles of Incorporation d. A limited partnership?s Certificate of Limited Partnership 16. Which of the following is MOST ACCURATE considering Meinhard v. Salmon? a. Unlike partners, joint adventurers do not owe one another a duty of loyalty b. Joint adventurers are always entitled to equal pay for equal work c. The duty of loyalty can be breached when a partner takes an opportunity for herself (without first disclosing the opportunity to the other partners) d. All of the above 17. Which of the following actions will most likely to require shareholder approval: a. Issuing common stock that has previously been authorized b. Hiring a new person to run the marketing department of a services company c. Increasing the number of authorized shares of stock d. Increasing the price of a frequently sold product 18. Which of the following is MOST ACCURATE considering Guth v. Loft, Inc. (the Pepsi case)? a. Directors and officers are free to use a corporation?s assets for their personal uses (so long as such assets would otherwise be sitting idle) b. Fiduciary duties are sometimes breached when a director pursues an opportunity (i.e., in her individual capacity) without first offering that opportunity to the corporation she is serving c. Unless they agree in writing, corporate officers and directors owe no fiduciary duties to the corporations they serve d. Directors and officers are free to pursue whatever personal interests they desire ? so long as they do so after business hours (i.e., after 6:30 PM) 19. Which of the following is MOST ACCURATE about the Business Judgment Rule? a. It allows directors and officers to avoid liability to corporations and shareholders for honest mistakes of judgment b. It will never protect directors from bad business decisions c. It will never protect officers from bad business decisions d. All of the above 20. Which of the following is MOST ACCURATE considering SEC v. Texas Gulf Sulphur Co. (the insider trading case)? a. Information relating to an initial test, or sample, is never sufficient to be considered a ?material? under Rule 10b-5 b. The SEC brought its action because Texas Gulf Sulphur Co. was raising more than $5,000,000 as part of the stock issuance in question c. Texas Gulf Sulphur Co. was liable because the shares in question were not registered with the SEC and such shares did not fit within an exemption from registration d. Courts may consider what insiders actually did with information when determining whether such information is a ?material? under Rule 10b-5 Background Information for the Next TWO Questions The following companies plan to raise capital by issuing shares of stock as follows: Company: Make-it-Happen Inc. Mover Inc. World Shaker, Inc. Shares being offered : 1,100,000 250,000 800,000 Price per share: $1.00 $1.50 $0.50 Total amount of offering: $1,100,000 $375,000 $400,000 21. Which company is LEAST likely to rely on Rule 504 (of Regulation D) for its exemption from registration under the Securities Act of 1933 (ignore the recently passed Crowdfund Act)? a. Mover Inc. b. Make-it-Happen Inc. c. World Shaker, Inc. d. Each of the above companies may rely on Rule 504 for its exemption from registration 22. For this question only, assume that each company will rely on a Regulation D exemption from registration. Assume further that each company will issue shares of its stock to unaccredited investors as part of its offering. Which company MUST prepare an ?offering document? in connection with its offering (again, ignore the recently passed Crowdfund Act)? a. Mover Inc. b. Make-it-Happen Inc. c. World Shaker, Inc. d. Each of the above companies must issue an offering document or private placement memorandum in connection with its offering 23. Barack and Mitt recently started a for-profit fitness center (i.e., gym/club). They are co-owners of the business. No documents were ever filed with the SOS on behalf of the business. Which of the following is TRUE: a. The business is a partnership b. Barack and Mitt should consider obtaining insurance to reduce certain risks related to the business c. Barack and Mitt Should consider using contracts to reduce certain risks related to the business d. All of the above 24. Britney?s sole proprietorship enters into a joint venture with Crazy Inc. (a Delaware corporation). Britney?s personal liability for the joint venture?s activities is: a. Limited to the amount of her investment in the joint venture b. Limited to the amount of her investment in the joint venture and any profits c. Limited by state statute (and the specific amount varies from state to state) d. Unlimited 25. Assume that Julie properly forms a corporation ?S Inc.? S Inc. then enters into a partnership with Cash Capital Inc. Julie?s liability exposure for the partnership?s activities is most likely: a. Limited to the amount of S Inc.?s investment in the partnership. b. Limited to the amount of her investment in S Inc. (that is to say, S Inc.?s liability is unlimited with regards to the partnership?s activities but Julie?s liability is limited with regards to S Inc.?s activities). c. Limited to the one-half of the amount of S Inc.?s investment in the partnership. d. Unlimited. 26. Charlene and Karla form a consulting firm called ?C & K Partners.? For federal tax purposes, C & K Partners most likely: a. Is a separate tax-paying entity. b. Needs to file an informational tax return with the IRS but is not a separate tax-paying entity. c. Pays ? of the taxes if there are two partners. d. Never files an informational tax return or pays any taxes. 27. Yan and Lazara, both U.S. citizens, want to market a new computer game. They wish to form a business entity that avoids U.S. income taxes at the entity level (they want the tax obligations to pass through to their individual returns). Which of the following entities could help Yan and Lazara achieve their goal: a. IT Inc. (a Delaware corporation that has successfully elected to be taxed as an S Corporation). b. IT Partners (a Delaware partnership) c. IT LLC (a Delaware limited liability company) d. Each of the above entities could help Yan and Lazara achieve their goal of avoiding U.S. income taxes at the entity level. 28. Anthony is an Officer of Toy Inc. (a large corporation). Without informing Toy Inc. or Play Inc., Anthony has taken an additional position as an Officer of Play Inc. Play Inc. is in direct competition with Toys Inc. Thus, Anthony is an Officer of both corporations and has not disclosed this fact to either corporation. By taking these actions, Anthony most likely: a. Has NOT breached any duty because he has not made any misstatement of fact b. Has breached his duty of loyalty to Toy Inc. c. Has breached his duty of loyalty to Play Inc. d. Both ?b? and ?c? 29. Co-founders Max, Grinch, and Cindy-Lou have written a business plan and are now launching the startup company in Illinois. Max and Grinch agree with Cindy-Lou when she says: ?If we waste time and worry about forming an entity and drawing up agreements with each other, our business will lose paying customers and the three of us will lose profits. That?s just dumb. After 3 or 4 years of solid sales, we can find an attorney to draw up the papers and incorporate us as either an LLC or Corporation.? Over the next TWO years, which of the following laws will most likely govern the Max, Grinch, and Cindy-Lou business relationship? a. Illinois?s partnership laws b. Illinois?s corporation laws c. Illinois?s limited liability company laws d. Both Illinois?s corporation and limited liability company laws 30. Kendra, an employee of Big Company, files a sexual harassment suit against Archie, her supervisor. Kendra wins against Archie. Big Company, however, would also most likely be liable if it had harassment policies and complaint procedures in place: a. But Kendra failed to follow such policies and procedures b. And Kendra followed such polices and procures but Archie?s discrimination persisted c. But Archie failed to follow such policies and procedures d. But Big Company seldom gives its employee of the month awards to its female employees 31. Which of the following statements is MOST ACCURATE? a. There are statutory and public policy exceptions to the at-will employment doctrine b. There are NO exceptions to the at-will employment doctrine c. The at-will employment doctrine is no longer applicable d. There are only statutory exceptions to the at-will employment doctrine (i.e., public policy by itself is never sufficient to create an exception) 32. Which of the following is MOST ACCURATE considering Mims v. Starbucks Corp.? a. Once an employee becomes a manager, she no longer desires overtime pay b. In order for an employee to be considered a manager (and thus not entitled to overtime), she must spend more than 50% of her time performing management duties c. When an employee spends only 30% of her time performing management duties, management may still be considered her primary duty d. When determining whether or not employees are managers (and thus not entitled to overtime), courts will only consider official job titles (i.e., courts will not consider the tasks actually performed by the employees) 33. Alan is bringing a lawsuit under the Age Discrimination in Employment Act of 1967. Which of the following items is Alan NOT required to show in order to establish a prima facie case? a. That he was a member of protected age group b. That he was qualified for position from which he was discharged c. That he was discharged under circumstances giving rise to inference of discrimination (e.g., age-related comments) d. That he was not materially late for work on the date he was terminated,thanks,thank you is due tomorrow at latest 6:00 pm eastern time
