et powerECO204: Homework Assignment 3 1. True, False, Uncertain a. A firm that enjoys economic rents earns higher economic profits than other firms without the economic rents. b. Relative to the perfectly competitive equilibrium, the equilibrium outcome for a market dominated by a monopsonist will be higher prices and lower levels of good demanded.
In other words, the return on equity ratio shows how much profit each dollar of common stockholders' equity generates. Based on Nike, Inc.’s ROA of 14.4%, it can be determined that Nike, Inc. is may be more efficient in managing the utilization of its asset base versus Under Armour, whose ROA is 11.1%. The higher the ratio the better profit gain the company produces. Financial Leverage Percentage | 2012 | Under Armour | 4.7% | Nike, Inc. | 7% | The financial leverage percentage measures the advantage or disadvantage that occurs when a company’s return on equity differs from its return on assets. Under Armour’s financial leverage ratio (4.7%) is lower because it utilizes less debt in its capital structure and it is not earning as high on its assets, compared to Nike, Inc. (7%).
| | | | | Coach Inc. Study Case | October 1, 2014 | | Table of Contents Coach Inc. 1 Study Case 1 What are the dominant economic characteristics of the luxury goods market? Does it appear that the industry’s prospects for growth and attractive profits are good? 1 How strong are the competitive forces confronting Coach and other accessible luxury market participants? Which one of the five competitive forces is the strongest? Explain your decision.
Kroger has greater ROA performance at 6.4% in comparison to 6.0%. However they do have a weaker profit margin at 2.0% vs. 2.4%. Kroger overpowers this profit margin weakness by displaying quicker asset turnover at 3.171 (Kroger) vs. 2.509 (Safeway). 3. Which company was the more profitable in 2004?
Despite scouting for smaller opportunities, a first round of $250 million funding may not be sufficient for Brazos to invest in any more than a few firms which gives them limited scope for diversification. This places greater pressure on a first time fund and in particular, Brazos’ motivation to add value by simply promoting organic growth in cash flow and operational efficiency in the hope of enhancing industry scale. Additionally, the existence of dependable cash flow and management make it easier to acquire debt financing and increase leverage which suits a first time fund. Furthermore, Brazos’ previous relationships and experience in the market allowed it to mitigate aspects of first fund bias which inhibit the entry of many prospective VC firms into the industry. Brazos’ GTT method is one of its points of differentiation which appear limited in its application to a variety of firms outside the ‘family-owned business’ model.
These two segments are fundamentally different and do not have the same risks. By using a company wide hurdle rate the risks of these two segments are not taken into account. Looking at industry wide equity betas we can see that telecommunications services industries are less risky at an average of 1.04 while telecommunications equipment and computer equipment industries are riskier and have an average beta of 1.36. Investors should ask for a much higher return from the Products and Systems segment than from the Telecommunications segment. To calculate the separate hurdle rates the cost of equity for each segment must be determined first.
Using named examples, assess the relative importance of political, economic and social factors in explaining unequal access to technology (15) All three factor's economic, social and political factors all play an important role in explaining the technological advancement of a nation. Countries with a higher GDP tend to have a higher use of technology, shown by the N/S divide (Brandt line). Without money people cannot afford even the simplest technology e.g. jiko stoves. Many technologies are dependent on a higher HDI e.g.
QUESTIONS TO ANALYSE: 1. Please help Haberland support his decision on where should Genicon go next? When entering a new market it should be taking into account the different variables, economic, historical and behaviors toward growth in the sector in which you are working on. The four countries taken into account have advantages and disadvantages compared to what the company is looking for; as each country is different and has different markets and economies, some have growing economies, large population and others have them both their population is not willing to use the services and products offered by the company, it would be a good decision to enter the Chinese market as it is an economy with very high growth levels , besides the increase in the population while is growing, requires more care and as shown in the government reports China is investing heavily in the health sector so they need medical equipment providers to serve all its people who are willing to spend 20% of their income on the offered products. 2.
Since it’s a two-option system, the game theory model works for both factors and there often is a parallel correlation between the decisions made for politics and those made in the economy. On the other hand, the diamond could almost be seen as the optimal scenario generated from the game of inclusive vs. extractive. An inclusive political system could be interpreted as the same thing as an Enabling Political System, in that one could assume that only an political system that enables the transfer and development of power could be deemed inclusive. An inclusive economic system is the root of stimulating the other three pillars in the diamond framework. Effective financial systems allow for vibrant entrepreneurship and with both you have an inclusive economic system.
Problem 1 The merger transaction was designed with a degree of complexity to offer best possible financial structure that benefits the companies. Essentially it was more like merger than an acquisition as the two companies sought mutual advantages by combining the two companies. Therefore there was enough room for the two companies to cooperate in negotiations, to make the best deal out that gives enough flexibility and investment options for companies and their shareholders. At the end of the transaction, Rhone-Poulenc obtained 68% of Rorer's common stock (91.6million shares), which allowed Rhone-Poulenc to consolidate Rorer's results for financial reporting. The transaction was structured into three stages as following: 1.