2) Who are DFA’s clients, and what are their concerns? What new clients is DFA trying to serve, and what are some of the new issues DFA will face in meeting these clients’ needs? DFA began by managing money for major institutions, including corporate, government and union pension funds, college endowments, and charities, and these original clients made up the majority of its business. DFA’s institutional clients, who accounted for $25 billion of DFA’s portfolio, were mainly concerned in long-term performance, portfolio diversification and transaction costs. These clients were rarely worried about tax implications because they were mostly not-for-profit or were granted tax-exempt status for managing retirement plans.
Real World Case 12-6 Corporations frequently invest in securities issued by other corporations. Some investments are acquired to secure a favorable business relationship with another company. On the other hand, others are intended only to earn an investment return from the dividends or interest the securities pay or from increases in the market prices of the securities—the same motivations that might cause you to invest in stocks, bonds, or other securities. This diversity in investment objectives means no single accounting method is adequate to report every investment. Merck & Co., Inc., invests in securities of other companies.
An example of this is China. They realised that they may need to import fossil fuels from the Middle East in the future so they have started to build good relationships with countries from the Middle East. Although they did not have any long-standing strategic interests in the Middle East they realise that the relationship between them and the region where most of its oil comes from is becoming increasingly important. One of the key components to them forming good relationships with the Middle East is by cultivating with Saudi Arabia. While China have been doing this the countries In the Middle East with the oil have been trying to shift away from having a customer base from over dependence on the Western market and so they have been looking at rapidly growing markets like China.
Investors investing in an IPO are aware that it takes time to see a solid return/profit when a company is expanding into new ventures and that risks are involved. Most importantly, investors know that a risk has to be taken for continued growth and for the health of the company. CanGo needs to offer an IPO so that they have the funding to expand and grow. Issue 4 Hidden costs The team at CanGo hasn’t even considered what the hidden costs to the business might be if they branch out into the new projects they are currently exploring. They are not adding additional staff, equipment, or software so spreading the resources out could cause the quality of the existing products to suffer.
As a C-corporation the business, not the owner, would be held liable for any financial damages. Any accidents involving employees or customers would be the responsibility of the corporation to settle. Financially speaking incorporating is the best option because as a sole proprietorship the owner is currently paying a much higher tax rate versus the corporate tax rate. With the tax code being different for corporations there is better profit retention and security. The client also mentioned the issue of partnership and the selling of stock in order to expand the company.
Banks focused mainly on making profits rather than regulations, so they did not pay premium for F.D.I.C. when they were in good time, then they suffered in bad time that they could not pay back. Bair asked the banks to pay premium and fund building. Basel II advocated banks to self-regulated, which made banks keep a low capital, thus Ms. Bair disagreed with Basel II and later facts of deeper crisis proved she was right. With regarding to bailout by several banks, Ms. Bair held different views from Geithner`s.
I. Introduction a. Ben & Jerry’s Homemade was on the table for takeover by other firms; specifically four, Dreyer’s, Unilever, Meadowbrook Lane and Chartwell. With the increased competitive market and declining financial performance, takeover bids were coming in. Co-founders Ben Cohen and Jerry Greenfield knew that in order for B&J to maintain its social stature, it would need to remain an independent company; but chief executive Perry Odak felt that the shareholders would be best served by selling the company. II.
Delaware Corporation Law Have you ever wonder why majority of the fortune 500 companies has chosen to incorporate their business in Delaware? Well it’s not because of taxes, although Delaware like every other state tries to keep its corporate tax rates low and competitive. There are a few advantages why companies decided to incorporate in Delaware, for instance; • As a state that welcomes corporations with open arms, Delaware provides such financial incentives for corporations as freedom from personal property tax, intangible property tax and even sales tax. A bigger incentive is the absence of a corporate income tax, provided the corporation is not doing business within the state. Furthermore, Delaware corporations pay
We are going to discuss the level of business risk for some of those factors. In the later part we will also calculate the volatility of some important accounts of the financial statements from the historical data given in the case to get the overall idea about its business risk. Centralized Authority:It has both pros and cons depending on the size of an organization. In a small organization the more the authority is centralized the less it faces business risk. But following centralized organizational structure in a huge corporation like AHP is questionable.
General Electric didn’t always favor joint ventures. They had always been noted as being the sole ownership of a corporation. The New York Times stated that if GE were to run a business they needed to run the business and to be in total control of it, but in the past few years they have shown an ever greater willingness to hook up with other companies, even if it meant taking a minority position. They had been just buying smaller business and turning them into General Electric, but now they have turned. They have realized that taking on the little companies and partnering with them, makes the market more diverse and their able to spread both risk and capital around.