(c) Listing a large firm's stock is often considered to be beneficial to stockholders because the increases in liquidity and reputation probably outweigh the additional costs to the firm. (d) Stockholders have the right to elect the firm's directors, who in turn select the officers who manage the business. If stockholders are dissatisfied with management's performance, an outside group may ask the stockholders to vote for it in an effort to take control of the business. This action is called a tender offer. (e) The announcement of a large issue of new stock could cause the stock price to fall.
Which method would lead to the best decision when a competitor is submitting a lower bid for your product? The absorption cost method will show the profitability and will provide the best references concerning how much money the company will make as compared to the bidder who has the lowest bid. Absorption costing will be more useful to companies that do not sell all of its products manufactured during a certain period. By using absorption costing the cost of the product, is not going to be shown until the time that
What is the project’s net present value? When attempting to finance a project, it is important to know the financial health of the company. The net present value aids with analyzing the profitability of a project. It demonstrates the difference between the present value of the cash inflows and the cash outflows (Titman, Keown, & Martin, 2011). When a negative net present value is obtained, it is a sure indicator that the firm should not continue to invest in a project.
At present, Bessemer’s shareholders are hoping for a higher dividend and cutting it would only upset these shareholders. This decision would also signal poor cash flows, lowering the firm’s value with the cut. Along with this, the firm could be up for a hostile takeover if large blocks of stock are liquidated at once. However, with a lowered stock price, aggressive growth investors may be willing to pick up the slack, thus increasing the stock price and avoiding any possible takeover. Another option for Bessemer is to change their dividend strategy entirely.
The management fees received by GP will be according to industry standards. * In worst case scenario where all the investment is liquidated with negative or no return the investors will get original invested amount with 20% return provided by sacrificing General Partners own wealth. * This fee structure is risky for General Partners as when the investments sour it will hit them badlyWhat are the financial implications of the offer? For Limited Partners:-From Limited Partners perspective this is an attractive offer as they will receive at least 20% returns as per the agreement in worst case scenario and may earn much higher returns if the funds perform well.For General Partners | For General Partners this offer could turn out to be a poison pill if the investments sour(however there are very rare chances of losses as some of the investments had attractive prospects) On the flip side this offer may attract several investors because of guaranteed returns and the partners may be able to raise substantial
A portfolio analysis help a company with making decisions on what products that they must considered to be the main focused and which one they should get rid of. The portfolio analysis raises the issue of cash flow availability for use in expansion and growth for products in the organization. The BCG Matrix and the portfolio analysis would benefit a company to see where they stand with their products and where they should put more focus on to bring that particular product up in the market. Even though there are products that are doing well for the organization they can also become problems. The economy is going through some tough times now and it could be hard to keep the stars the stars and the cash cow the cash cows (Portfolio Analysis,
The importance of revenue is that tells you how much money overall is coming into the business and subtracting the costs you can see what your overall profit is. An increase in revenue could also lead to more investments back into the business, for example by staff training, extending a department etc. A decrease in revenue will mean a decrease in profit, and probably having to cut budgets. If Shafal doesn’t cover her expensive her business shut down. The way revenue helps the business is a by money coming in from different areas such as rent.
Without proper cash management and regardless of how fast a firm’s sales or reported profits on the income statement are growing, a firm cannot survive without carefully ensuring that it takes in more cash than it sends out the door. When analyzing a company's cash flow statement, it is important to consider each of the various sections that contribute to the overall change in cash position. In many cases, a firm may have negative overall cash flow for a given quarter, but if the company can generate positive cash flow from its business operations, the negative overall cash flow is not necessarily a bad
In that time a trend in the business world was the buyout fund commitments, according to the exhibit no.1a. * Both companies want to go in the deal with each other because if they don't react fast enough, the company might go for another auction and the cost of the business will rise substantially. b. Is Orangina a good deal? It seems that Lion and Blackstone are paying a pretty
In that time a trend in the business world was the buyout fund commitments, according to the exhibit no.1a. * Both companies want to go in the deal with each other because if they don't react fast enough, the company might go for another auction and the cost of the business will rise substantially. b. Is Orangina a good deal? It seems that Lion and Blackstone are paying a pretty full price; what angle may the consortium have found to justify it?