After the transaction this shareholder no longer has a controlling interest. Given these facts, to induce the shareholder to sell the block of stock Target Inc. was forced to pay an amount in excess of the current market price of the stock. Target Inc. paid the shareholder $40 per share when the market price was $30 per share. Question How should Target Inc. account for the purchase of this treasury stock? Required 1.Provide a brief written description of the proper accounting treatment, including how the extra $10 paid per share is recorded.
[40%] (c) Discuss why P/E multiples are in general negatively correlated with risk and positively correlated with growth. [20%] Question 2 Mr. Smith wants to invest in two shares: share X and share Y. Share X has an expected return of 12% with a variance of 0.0096, and share Y has an expected return of 9% with a variance of 0.0081. Suppose the covariance between X and Y is -0.0034. Calculate the expected return and standard deviation of his portfolio if he invests: (a) 40% in share X and 60% in share Y.
Usually a discount of 10 percent to 40 percent is applied to private companies due to the lack of liquidity of their shares. Precedents/acquisition comps: At what metrics (same as above) were similar companies acquired? Discounted cash flow (“DCF”): Based on the concept that value of the company equals the cash flows the company can produce in the future. An appropriate discount rate is used to calculate a net present value of projected cash flows. Leveraged Buyout (“LBO”): Assuming an IRR (usually 20 percent to 30 percent), what would a financial buyer be willing to pay?
In 1990, the 2,000th restaurant opened, and in 1992, the 3,000th restaurant opened. Bagels were added to the menu at Dunkin' Donuts in 1996. Breakfast sandwiches were added the following year. Dunkin Donuts headquarters moved to Canton in 2004.Dunkin Donuts began its "America Runs on Dunkin'" marketing campaign in 2006, the same year its parent company had some of private equity firms which were Bain Capital, The Carlyle Group, and Thomas H. Lee Partners. It opened its first restaurant in Taiwan in 2007.During the past several years,
ECO 372 FINAL EXAM 1. Consider if the government instituted a 10% income tax surcharge. In terms of the AS/AD model this change should have a. shifted the AD curve to the left b. shifted the AD curve to the right c. made the AD curve flatter d. made AD curve steeper 2. If the depreciation of a country’s currency increases it aggregate expenditures by 20, the AD curve will a. shift right by more than 20 b. shift right by less than 20 c. shift right by exactly 20 d. not shift at all 3. Suppose that consumer spending is expected to decrease in the near future.
The Deli counter at the local grocery normally prepares 150 Italian Panini’s for the mid-morning rush. 35 of these sandwiches are standing order for a business named Go West Travel. For their special anniversary celebration, Go West Travel orders twice their standing order. How many sandwiches should the Deli counter prepare? 2.
Case Study 2: McDonald’s “Seniors” Restaurant Current Strategies & Results McDonald’s is one of the world’s leading fast food chains operating about 32,478 restaurants around the world restaurants (Business Week, March 8th, 2010). Fortune magazine ranked McDonald's #1 for social responsibility in 2007’s list of Most Admired Food Service Companies (Fortune, 2007) also # 1 in terms of people management in 2009 (Fortune, 2009) . Quinn took number of steps in accordance with McDonald’s corporate philosophy of giving back to the communities it serves. Monthly Special. Every 4th Monday of the month, the restaurant offers breakfast specials for people aged 55 and older.
To help you decide where your next fast food meal will take place, we will take a detailed look at 5 common foods both restaurants offer. We will compare the calories, fat, protein, carbohydrates and sodium to help you choose where the best option will be for you and your family. When selecting French Fries, most people pick which one tastes better to them. Before you seek out that hot, crispy, salty goodness, take into consideration the differences for both McDonald’s French Fries and Burger King’s French Fries. For a medium order of French Fries from McDonald’s, you will absorb 380 calories, 13 grams of fat, 2 grams of protein, 30 grams of carbohydrates and 270 milligrams of sodium (McDonald’s, 2012).
Coincidentally, George Naddaff, owner of 19 Kentucky Fried Chicken franchises, caught on to the “home-cooked” fast food idea and purchased a Boston Market franchise. Boston Market’s direct competition at that point, wanted to participate in their concept which carried them far beyond their current sales and revenue. Some indirect competitors of Boston Market eventually got involved as well. McDonalds ended up purchasing the chain of stores in 1998 and changed a few things to increase the appeal of Boston Market to its consumers. Fortunately for McDonalds, they are a big enough corporate themselves which enabled them to make this deal with Boston Market, whereas the other indirect competitors (local sub shops, Chinese restaurants, etc.)
Julia has decided to sell food. The most popular food items are pizza, hot dogs and BBQ sandwiches. The busiest time will be one hour prior to the game beginning and during half time. Julia was able to secure a deal with a pizza company to deliver 14” pizzas, 8 slices each for $6 before the game and before half time. Julia found a 3’ x 4’ warming oven she can rent for $600 or $100 per game to keep the food warm.