It would be my advice for Mr. Jones to not buy the stock because of the liability of current and future tax obligations which Mr. Jones would incur from the purchase of the stock. Since the tax identity of Smithon corporation would have not ceased, it is not a favorable purchase for Mr. Jones. Ina a case where the tax identity of a firm does not cease not to exist, the tax aspects will remain the same and so will the existing tax schedule. So in this case it would mean that Mr. Jones would not be allowed to change the financial year to end on December 31. The buyer in cases where he can’t change the legal entity is in a non -benefice situation, the buyer is limited to follow the current tax basis on the company’s assets even if the buyer paid more for the
But the amount that a manager can hold stocks should be limited because the ownership would be split in this way as it is not good for Brazos itself to decrease its ownership. The real estate subsidiary is a good idea that Brazos could purchase it as an asset and they can still control the operation and employees. Since Brazos can not only buy tangible assets but also intangibles asset which is Goodwill $34.7 million. Brazos
I priced my high end Mercedes line accidentally at the price I had planned for my mainstream Workhorse line and vice-versa. I did not look closely enough at my pro forma cash flow or income statements to recognize the forecasted loss and as a result did not dig deep enough to see the reasons and to make the adjustments in pricing. I was overly focused on cash at that point to fund production capacity. I discovered the error when evaluating second quarter actuals. Going into third quarter planning, I looked at the pro forma cash flow and income statements to determine that my cash balances would not require any emergency borrowing while allowing me to expand production levels to meet or exceed my forecasted sales.
The value to the separate transitions would be higher than a combined one. Being the value of the disk drive business diluted in the Veritas stock value, a separation based deal would trigger a valuation of the Veritas business close to its stock price value, plus a higher price for the disk drive business. Finally Silver Lake Partners’ aims to acquire the disk drive operations and probably are not interested in the Veritas stock, that is a very close exchange of money for stock. Transaction Winners and Losers: Main winners would be Seagate shareholders. Will avoid taxes on the Veritas stock swap and acquire a more liquid asset.
The constant hurdle rate results in a flat line and doesn’t correlate risk with return. With nearly $2 billion being invested in upcoming capital projects, the discount rate to be used within the firm needs to be more accurate, account for risk, and not destroy shareholder’s value. Currently the firm is not accurately assessing their future. Telecommunications Services is returning capital below the corporate hurdle rate and Products & Systems is above the rate, but the firm is not factoring in riskiness of the segments individually. Question 2 [pic] Use CAPM model to estimate their cost of equity.
By not buying a gem from a supplier until a customer purchases it, it strongly limits the amount of risk and cash tied up at any point. I also like that they have a very lean supply chain that strives to eliminate middle men, keep costs low. This allows them to sell their products to the customer at very competitive prices. I do not like their marketing aspect being completely based upon the internet. A
does not have to accrue the liability because the exact amount of the liability cannot be reasonably estimated. The company has to make a note disclosure and state all the facts of the case and the high chance of losing the case because this lawsuit (and the possibility of 20more) is relevant to the future financial position of the company and thus the users of the financial statement should know about the situation. Part C - 5 Marks i.) Lower of cost and net realizable value method (LCNRV) is a method of inventory valuation in which the company reports its cost of goods sold as either the cost or the net realizable value depending on which is lower (in accordance with the relevance and prudence criteria of accounting). This is in order to ensure that their inventory and income statement are not overstated.
Variations in business cycles are able to be seen as short-term and long-term progression developments and they could shift. Cycles are calculated using the real gross domestic product of a country. Not like the more organized phases of economics, business cycles do not follow a foreseeable or mechanical form. However, they should be factored into considering an economy.
The equation below must be satisfied: Σ 225 stocks before changeDivisor before change= Σ 225 stocks after changeNew divisor From the point of view of one who does not like a lot of risk and wants to minimize it. So, I would like to sell stocks that will be deleted and then will be stocks that will be added one day before the effectiveness date. In this case, if I would be able to swap the deletions and additions at the date, I would bear no risk. 2) What would you do if, instead, you were at the proprietary trading desk of Goldman Sachs? There are two possible trading strategies.
The paradox of efficient market hypothesis is that some investors have to believe that market for the market to continue to be efficient. Explain your understanding of the above paradox. Include in your discussion the forms of market hypothesis. The paradox of efficient market is that if every investor believed a market was efficient, then the market would not be efficient because no one would analyze securities. In effect, efficient markets depend on market participants who believe the market is inefficient and trade securities in an attempt to outperform the market.