If you were a new investor who wanted to invest in stock, would you prefer to invest in registered public stock, or unregistered private stock? Why? (2-4 sentences. 1.0 points) 12. Describe an alternative investment that you might invest in someday, and explain why this investment is appealing to you.
What is the right cost of capital for the various Equity options? Measure and explain the cost of capital for each equity option. 4. Now imagine you are HPI’s investment banker and you are proposing an ADR on the NYSE. You have to convince HPI’s bearer of the price at which they should issue the shares?
3. Preferred Stock: A security that has preferential rights compared to common stock. C) What information about securities must companies disclose? Discuss how Merliss should report the proposed preferred stock issue. a.
Inversely, when a share repurchase is seen as treasury stock, the cost of the treasury stock is naturally disclosed as a decrease in total shareholders’ equity. Alcoa would report the purchase of the treasury stock by debiting treasury stock and crediting cash for the charge of the purchase. The treasury stock ought to be disclosed independently in the shareholders' equity area of Alcoa’s balance sheet as an unallocated cut of shareholders' equity. These shares are treated as issued although not part of common stock outstanding. If subsequently resold for a sum larger than the cost, Alcoa should report for the sale of the treasury stock by debiting cash for the sale cost, crediting treasury stock for cost, and crediting additional paid-in capital from repurchased stock for the excess of the selling price over the cost.
The $2.55 billion gain in Berkshire`s market value of equity and the 6.28% jump on Scottish Power`s stock means that the acquisition was a win-win situation, creating value for both companies. Berkshire Hathaway`s
After academic research documented superior performance by value stocks in a multitude of countries, DFA began to create a variety of international value-stock and small-stock investment funds. The company was highly successful, despite missing out on the great 1990s growth-stock boom. DFA's assets under management grew from $8 billion to $40 billion between 1991 and 2002. With value stocks having performed well in the first two years of the new decade, DFA is experiencing continued growth of its investor base and is now seeking new areas in which it can add value for investors while continuing to claim to have no special "stock-picking" ability. Dimensional Fund Advisors Case 1.
So initially we aggressively brought new vendors on board and within the first 3 months we saw the monthly revenue growth from INR 6 lakhs to INR 30 lakhs. But there wasn’t any increase in the profits as the additional profit went in to marketing activities. So I proposed a plan to the management to introduce our private label where we could control the margins as well as the quality of the product. It was a pretty challenging task as not being from the industry was a factor against us. Eventually, we were able to find few vendors who were ready to manufacture for us and at industry competitive prices.
The EVA trend seems to be almost mandatory for the larger companies, but there is no reason that it shouldn’t work just as well for their smaller firm. The implementation of this decision tool would benefit the company in three distinct ways. First of all, EVA data would provide stockholders and potential investors with comparable data to their competitors. If the investors are looking for EVA valuations to help make their assessment of companies, then it would be dutiful for OSI to provide this data. Stock prices are determined by
o Points to Consider: 1. Proceeds from public Shares: ➢ The most common reason CFOs choose to provide an IPO on their firm is to create public shares for use in future acquisitions. While “Rosetta Stone (‘RS’)” may not have immediate acquisition plans, the public offering of their shares will provide new capital for them to continue to expand. ➢ Only 5% of their revenue comes from outside of the United States, and with increased capital from an IPO, RS can look to pursue new markets. Whether they plan to increase their market share through internal investment or acquisitions of competitors, the increase in available capital is a huge advantage for a firm with such an aggressive growth strategy in mind.
The 1990s proved to be an excellent decade for WorldCom, particularly after the 1997 purchase of MCI, which was the largest national long-distance phone carrier at the time, and resulted in the largest corporate merger in the history of the United States. Bernard Ebbers was credited with saving the fledgling company and the stock became extremely valuable. Much of the increase in stock value can be attributed to the creative accounting practices of Scott Sullivan, chief financial officer of WorldCom. Mr. Sullivan's methods were designed to increase the company's value and stock price though a series of acquisitions. The methods utilized gave the shareholders the image that WorldCom was a growing company with steadily-rising income that was reliable and would offer a large return for their investment (Boatright, p.44).