Growth In International Markets

Assignment 1: Individual Research and Short Paper—Growth in International Markets

Once a company has identified a market favorable in terms of profit and market share potential, growth prospects and planning begin to evolve.

For this assignment, you will use the University online library resources and Internet resources to compare the risks of further expansion in an existing market with the risks of expanding into a new market.

  1. Select an MNC that has decided to further expand into the U.S. and address the following questions:
    1. Did the company have to consider the same risks as companies entering into a new market? Present a comparative analysis of the risks. Identify some of the risks a company expanding further would need to consider.
    2. Are the growth considerations and strategies of expansion similar to those related to entering a new market?
    3. What economic incentives do municipalities offer for companies planning on investing? Are there any constraints the company needs to consider?
  2. Select a U.S. company that has decided to further grow in an existing international market, then address the following questions:
    1. What type of regulatory considerations does the company need to investigate prior to expansion? Are the regulatory considerations similar to those of entering into a new market?
    2. What type of benefits would a company avail when deciding on further expansion into the market?

Write a 4-page paper in Word format. Apply current APA standards for writing to your work.

By Wednesday, May 29, 2013, submit your assignment

 

 

Assignment 2: Course Project Task 4—Legal and Economic Risks of Expansion( Ikea- USA)

In this assignment, you will investigate your chosen MNC’s expansion activities in existing markets. Concentrate your study on the regulatory concerns that need to be addressed while expanding.

Carry out individual research using the University online library resources and Internet resources. Then, discuss the following in your group. Support your conclusions with examples.

Discuss the impact of the following factors on your chosen MNC:

  1. Taxation issues
  2. Distinguish U.S. GAAP versus IFRS
  3. Political
  4. Foreign exchange
  5. Legal
  6. Economic
    • Pricing
    • Product regulations
  7. Corporate governance
    • Policies
    • Issues
    • Organizational structure

By Thursday, May 30, 2013. submit your assignment.

· Read the overview for Module 4

· From the textbook, International business law and its environment, read the following chapters:

· National Lawmaking Powers and the Regulation of U.S. Trade

· GATT Law and the World Trade Organization: Basic Principles

· Law Governing Access to Foreign Markets

· From the Argosy University online library resources, read:

· Desai, M., Foley, C., & Hines Jr., J. (2004, December). Foreign direct investment in a world of multiple taxes.Journal of Public Economics, 88(12), 2727–2744. (LIRN Article A152498641)

· Gunter, H. (2006). Global expansion plans broaden horizons. Hotel & Motel Management, 221(18), 1–49. Retrieved from EBSCO database http://search.ebscohost.com/ login.aspx?direct=true&db=buh&AN=22746846&site=ehost-live

· International growth. (2009). Franchising World, 41(2), 93. Retrieved from EBSCO databasehttp://libproxy.edmc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bsh&AN=36530783&site=ehost-live

 

Growth in International Markets

Can managers afford to be conservative when taking decisions related to potential growth prospects?

 

After a company has successfully entered a foreign market, it may decide to continue to grow. Decisions to invest further can become easier to make based on the company’s experience in that market.

 

In early 2009, the Hongkong and Shanghai Banking Corporation (HSBC), Europe’s largest bank, announced that it was retreating from its expansion plans in the U.S. HSBC had recorded a $16 billion bad-debt loss in 2008. The loss was from an acquisition that initially cost the bank $14.8 billion. HSBC also had an additional $10 billion write-down on goodwill from its acquisition. The decision was primarily influenced by the eroding U.S. real estate market and a decline in the lending portfolio value of Household Financial, a six-year-old acquisition. Federal policies and regulations such as reduced interest rates, increased money supply, and Troubled Assets Relief Program (TARP) funds were contributing factors.

 

Raising capital, finding labor, and leveraging existing distribution channels all play a part in the decision to grow further. However, growth in international markets continues to be a challenge despite any circumstances.

http://myeclassonline.com/ec/courses/AUO_files/AU_img.gifModule 4 Overview (2 of 2)

 

http://myeclassonline.com/ec/courses/AUO_files/AU_spacer.gif

 

 

Growth in International Markets

This module will cover the risks associated with growth in international markets.

You will compare the risks of further expansion in an existing market with the risks of expanding into a new market. In your assignment, you will also investigate economic incentives offered to companies that plan on investing. You will also look at the various regulatory issues companies need to take into account prior to further expansion.

· Read the overview for Module 4

· From the textbook, International business law and its environment, read the following chapters:

· National Lawmaking Powers and the Regulation of U.S. Trade

· GATT Law and the World Trade Organization: Basic Principles

· Law Governing Access to Foreign Markets

· From the Argosy University online library resources, read:

· Desai, M., Foley, C., & Hines Jr., J. (2004, December). Foreign direct investment in a world of multiple taxes.Journal of Public Economics, 88(12), 2727–2744. (LIRN Article A152498641)

· Gunter, H. (2006). Global expansion plans broaden horizons. Hotel & Motel Management, 221(18), 1–49. Retrieved from EBSCO database http://search.ebscohost.com/ login.aspx?direct=true&db=buh&AN=22746846&site=ehost-live

· International growth. (2009). Franchising World, 41(2), 93. Retrieved from EBSCO databasehttp://libproxy.edmc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bsh&AN=36530783&site=ehost-live

 

Growth in International Markets

Can managers afford to be conservative when taking decisions related to potential growth prospects?

 

After a company has successfully entered a foreign market, it may decide to continue to grow. Decisions to invest further can become easier to make based on the company’s experience in that market.

 

In early 2009, the Hongkong and Shanghai Banking Corporation (HSBC), Europe’s largest bank, announced that it was retreating from its expansion plans in the U.S. HSBC had recorded a $16 billion bad-debt loss in 2008. The loss was from an acquisition that initially cost the bank $14.8 billion. HSBC also had an additional $10 billion write-down on goodwill from its acquisition. The decision was primarily influenced by the eroding U.S. real estate market and a decline in the lending portfolio value of Household Financial, a six-year-old acquisition. Federal policies and regulations such as reduced interest rates, increased money supply, and Troubled Assets Relief Program (TARP) funds were contributing factors.

 

Raising capital, finding labor, and leveraging existing distribution channels all play a part in the decision to grow further. However, growth in international markets continues to be a challenge despite any circumstances.

http://myeclassonline.com/ec/courses/AUO_files/AU_img.gifModule 4 Overview (2 of 2)

 

http://myeclassonline.com/ec/courses/AUO_files/AU_spacer.gif

 

 

Growth in International Markets

This module will cover the risks associated with growth in international markets.

You will compare the risks of further expansion in an existing market with the risks of expanding into a new market. In your assignment, you will also investigate economic incentives offered to companies that plan on investing. You will also look at the various regulatory issues companies need to take into account prior to further expansion.

 
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Finance Homework

1

Homework #3. (Due: Oct 5) Name: (ID: ) Note: Hand-write your answer in the blank, then upload your (scanned or photo-copied) work in Canvas. 1) You run a regression of a stock’s returns versus a market index and find the following: Please interpret the above results in the context of CAPM. 2) What is the expected return on the market? If a stock is 100% more risky than the market, what is the expected return of this stock? In this economy, what is the risk free rate?

 

 

 

 

 

2

3) If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each situation independently, and assume the risk-free rate is 5%. (Hint: compute expected return for the below four case, using CAPM)

 

 

 

 

 

 

4) The risk premium for exposure to aluminum commodity prices is 4%, and the firm has a beta relative to aluminum commodity prices of .6. The risk premium for exposure to GDP changes is 6%, and the firm has a beta relative to GDP of 1.2. If the risk-free rate is 4%, what is the expected return on this stock? (Hint: Use APT) 5) There are two independent economic factors, M1 and M2. The risk-free rate is 5%, and all stocks have independent firm-specific components with a standard deviation of 25%. Portfolios A and B are well diversified. Given the data below, write a proper pricing model?

 

 

3

6) Consider the single factor APT. Portfolio A has a beta of 1.3 and an expected return of 21%. Portfolio B has a beta of 0.7 and an expected return of 17%. The risk-free rate of return is 8%. If you wanted to take advantage of an arbitrage opportunity, you should sell (take a short position in) portfolio __(A or B)__ and buy (take a long position in) portfolio __(A or B)_. Write your reasoning. 7) Florida Enterprise has bonds on the market making annual payments, with the eight-year maturity, a par value of $1,000, and selling for $948. At this price, the bonds yield 5.9%. What must the coupon rate be on the bond? (a coupon rate is coupon payments over the face value)

 

 

4

8) A coupon bond that pays interest (coupon) semiannually has a par value of $1,000, matures in 5 years, and has a yield to maturity of 6%. If the coupon rate is 8%, the intrinsic value of the bond today will be __________. 9) Suppose that you are converting a well-diversified portfolio (Portfolio P) into an arbitrage portfolio.

The excess returns of Portfolio P can be explained by two factor APT model (i.e., = + ( ) +

( )

+ , where < 0 ( ) = 0, represent the two factors and the excess returns of Benchmark 1 and Benchmark 2). In this economy, there is a risk-free asset, the rate of which

is zero. Suppose α = −3%, ( ) = 1.2, ( ) = 0.8. To construct the arbitrage portfolio by using Portfolio P, do you need to sell or buy the portfolio? Show your arbitrage portfolio (i.e., you need to provide the weights of required assets). For this question, assume that your amount of buying or selling Portfolio P is one unit. What is your arbitrage profits (in percentage)?

 

 

5

10) Compute the covariance and correlation between asset 1 and asset 2 and the covariance and correlation between asset 2 and asset 3.

 

State Probability Asset 1 Asset 2 Asset 3

Bad 0.3 0.03 -0.02 0.02

Normal 0.5 0.07 0.04 0.01

Good 0.2 0.11 0.05 -0.01

 
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FIN-320 Principles Of Finance 3-2 Project One: Financial Analyst Job Aid

Competency

In this project, you will demonstrate your mastery of the following competency:

  • Describe the purpose and function of financial management in an organization

Scenario

You have been an entry-level financial analyst for six months. Your supervisor, who is about to fill another entry-level financial analyst position on your team, has asked you to create a job aid about the financial analyst role to help the new hire transition smoothly. The job aid needs to describe the responsibilities of a financial analyst, the essential elements of the role, and the impact the role has on a business.

Directions

Create a job aid for a new hire to an entry-level financial analyst position. Your job aid should be thorough yet easy for someone new to the field of finance to understand. You are encouraged to use the Project One Financial Analyst Job Aid template in the Supporting Materials section to complete this assignment.

Specifically, you must address the following:

  1. Financial Analyst Job Aid: In this job aid, you will give a general overview of financial management and its importance to a business.
    1. Financial Responsibilities: Describe the responsibilities of a financial analyst.
      1. In this section, outline the responsibilities a financial analyst has in terms of financial management. Add 5 to 7 specific bullet points outlining these responsibilities, and use complete sentences so that expectations are clear.
    2. Financial Management Decisions: Discuss the importance of using financial management for business decisions, and provide examples to support your claims.
      1. Consider the bullet points you outlined above. How do those responsibilities help to inform management decisions, and what would happen if management didn’t have this information? This should be a brief paragraph with examples.
    3. Accounting Principles: Explain how accounting principles are used to analyze a business’s financial health, and provide examples to support your claims.
      1. Write a brief paragraph that explains accounting principles and how they are used within financial management in relation to analyzing financial health. What accounting information and approaches do financial analysts rely on, and how do they use it? What would happen if that information was not available or was not accurate?
    4. Financial Statements: Describe how financial statements are used to help businesses make finance-related decisions, and provide examples to support your claims.
      1. Consider identifying the information contained in financial statements and what financial analysts would need in order to do their job. What types of finance-related business decisions would this information help to inform? Provide real or fictional examples to help show this.
    5. Financial Terminology: Explain how a financial analyst would use the financial terms in their day-to-day responsibilities in a clear, easy-to-understand way.
      1. Define each term listed below and provide a 1- to 2-sentence explanation of how a financial analyst might use the term, especially when communicating information to management or clients, or when relaying information to inform important decisions:
        • Financial statement
        • Liquidity
        • Working capital
        • Diversification
        • Time value of money

What to Submit

To complete this project, you must submit the following:

Financial Analyst Job Aid
Submit your job aid as a 2- to 3- page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Or, you may use the Project One Financial Analyst Job Aid template to help you complete this assignment. Sources should be cited according to APA style.

FIN 320 Project One Financial Analyst Job Aid

 

[Note: To complete this template, replace the bracketed text with your own content. Remove this note before you submit your job aid.]

 

The goal of this job aid is to provide an overview of the day-to-day responsibilities of a financial analyst and to describe the role financial management plays in an organization.

 

Financial Responsibilities

[In this section, outline the responsibilities a financial analyst has in terms of financial management. Add 5–7 specific bullet points outlining these responsibilities, and use complete sentences so that expectations are clear.]

 

· [Responsibility 1]

· [Responsibility 2]

· [Responsibility 3]

· [Responsibility 4]

· [Responsibility 5]

· [Responsibility 6]

· [Responsibility 7]

Financial Management Decisions

[In this section, discuss the importance of using financial management for business decisions, and provide examples to support your claims.

 

Consider the bullet points you outlined above. How do these responsibilities help to inform management decisions, and what would happen if management didn’t have this information? This should be a brief paragraph with examples.]

Accounting Principles

[In this section, explain how accounting principles are used to analyze a business’s financial health, and provide examples to support your claims.

 

Write a brief paragraph that explains accounting principles and how they are used within financial management in relation to analyzing financial health. What accounting information and approaches do financial analysts rely on, and how do they use it? What would happen if that information was not available or was not accurate?]

Financial Statements

[In this section, describe how financial statements are used to help businesses make finance-related decisions, and provide examples to support your claims.

 

Consider identifying the information contained in financial statements and what financial analysts would need in order to do their job. What types of finance-related business decisions would this information help to inform? Provide real or fictional examples to help show this.]

Financial Terminology

[In this section, explain how a financial analyst would use the provided financial terms in their day-to-day responsibilities in a clear, easy-to-understand way.

 

Provide a 1- to 2-sentence explanation of how a financial analyst might use each of the terms listed below, especially when communicating information to management or clients, or when relaying information to inform important decisions.]

 

Financial statement

· Definition: [Insert definition.]

· How this is used: [Insert explanation.]

 

Liquidity

· Definition: [Insert definition.]

· How this is used: [Insert explanation.]

 

Working capital

· Definition: [Insert definition.]

· How this is used: [Insert explanation.]

 

Diversification

· Definition: [Insert definition.]

· How this is used: [Insert explanation.]

 

Time value of money

· Definition: [Insert definition.]

· How this is used: [Insert explanation.]

 

References

[Remove this section before submitting this assignment. Please include any and all
 
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Financial Questions

1(CORPORATE INCOME TAX) Meyer Inc. has taxable income (Earnings before taxes) of $300,000. Calculate Meyer’s federal income tax liability using the tax table.

 

 

 

Taxable Income

 

 

 

$0-$50,000

 

$50,001-$75,000

 

$75,001-$100,000

 

$100,001-$335,000

 

$335,001-$10,000,000

 

$10,000,000-$15,000,000

 

$15,000,001-$18,333,333

 

Over-$18,333,333

 

 

 

Marginal Tax Rate

 

 

 

15%

 

25%

 

34%

 

39%

 

34%

 

35%

 

38%

 

35%

 

 

 

What are the firm’s average and marginal tax rates?

 

 

 

The firm’s tax liability for the year is? Round to the nearest dollar.

 

 

 

 

 

 

 

2(Working with the balance sheet)

 

 

 

The caraway seed company grows heirloom tomatoes and sells their seeds. The heirloom tomato plans are preferred by many growers for their superior flavor at the end of the most recent year the firm had current assets of $50,000, net fixed assets of $250,000 current liabilities of $30,000 and long-term debt of $100,000

 

 

 

A-Calculate caraway’s stockholders equity

 

 

 

B-What is the firm’s net working capital?

 

 

 

C-If caraway’s current liabilities consist of $50,000 in accounts payable and $10,000 in short-term debt (notes payable) What is the firm’s net working capital?

 

 

 

Caraway’s stockholders equity is? Round to the nearest dollar.

 

 

 

 

 

3-(Review of financial statements)

 

 

 

A scrambled list of accounts from the income statement and balance sheet of Belmond, Inc. is found below.

 

 

 

Inventory – $6,470

 

Common Stock – $45,100

 

Cash – $16,510

 

Operating Expenses – $1,340

 

Short-Term Notes Payable – $550

 

Interest Expense – $910

 

Depreciation Expense – $460

 

Sales – $12,870

 

Accounts Receivable – $9,590

 

Account Payable – $4,810

 

Long –Term Debt – $55,140

 

Cost of Goods Sold – $5,710

 

Buildings and Equipment – $122,280

 

Accumulated Depreciation – $33,650

 

Taxes – $1,410

 

General and Administrative Expense – $830

 

 

 

Retained Earnings?

 

 

 

            A-How much is the firm’s net working capital?

 

           

 

            B-Complete an Income Statement and a Balance Sheet for Belmond

 

 

 

            C-If you were asked to respond to parts (A) and (B) as part of a training exercise, what could you tell your boss about the company’s financial condition based on your answer?

 

 

 

A-How much is the firm’s net working capital? The firm’s net working capital is? Round to the nearest dollar.

 

 

 

 

 

4-(Analyzing the quality of firm earnings)

 

 

 

Kabutell, Inc. had net income of $750,000, cash flow from financing activities of $50,000, depreciation expenses of $50,000, and cash flow from operating activities of $575,000.

 

 

 

A-Calculate the quality of earnings ratio what does this ratio tell you?

 

B-Kabutell, Inc. reported the following in its annual reports for 2011-2013

 

 

 

($ Million) 2011- 2012- 2013

 

 

 

Cash Flow from Operation – $478 in 2011, $403 in 2012, $470 in 2013.

 

 

 

Capital Expenditures (Capex) $459 in 2011, $447 in 2012, $456 in 2013.

 

 

 

Calculate the average capital acquisitions ratio over the three year period. How would you interpret these results?

 

 

 

A-What is Kabutell’s quality of earnings ratio? % round to one decimal place.

 

 
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