Finance Assistance

/in /by

Instructions

Examine some important theories and concepts associated with interest rates. Safe investments usually have fixed interest rates. You have been asked to assemble this presentation for a weekly staff meeting, so your audience will be senior managers and a couple of vice presidents. Note their interest in this topic is very high so you need to be very succinct and clearly explain the risks and rewards of building a successful portfolio. In reference to term structure, interest rate risks, and duration supported by numerical illustration where applicable, in a PowerPoint presentation, evaluate the following:

1. The pricing of bonds, the calculation of the bond yield, and how bond prices adjust across time for premium, par, and discount bonds.

2. An evaluation of the yield curve and the theories to explain the shape. Discuss how these theories can be helpful in bond investing.

3. The interest rate risk for bond investments. Form a graphical presentation of the concepts.

4. The concept of duration and how it is useful in the context of bond portfolio analysis. You want to clearly discuss both the price risk measurement value for duration as well as how duration can measure the dynamics of price and re-investment rate risk across time for a bond portfolio.

It is critical that with each discussion above that examples are formed to illustrate the concept. Whenever possible, you want to demonstrate concepts using graphical approaches.

The required length of the PowerPoint Presentation option for this assignment is 12-15 slides (with a separate reference slide). Your presentation MUST include notes that contain 100-150 words per slide (this is your script). Be sure to include citations for quotations and paraphrases with references in APA format and style. Save the file as a PPT file with the correct course code information in the name.

The required length of the Video option for this assignment is 7-10 minutes. The video file must be saved in a .wmv format and be less than 8 MB is size. If you do not have video software or are unable to create a video please choose the PowerPoint option.

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

market value proportions.

/in /by

A firm has determined its optimal capital structure, which is composed of the following sources and target market value proportions.

Table 1:

Source of capital: long term debt   Target Market Proportions: 20% Source of capital: preferred stock Target Market Proportions: 10 Source of capital: common stock equity Target Market Proportions: 70

Debt: The firm can sell a 12-year, $1,000 par value, 7 percent bond for $960. A flotation cost of 2 percent of the face value would be required in addition to the discount of $40.

Preferred Stock: The firm has preferred stock selling at $72 per share par value. The stock pays a $10 annual dividend.

Existing Common Stock: A firm’s common stock is currently selling for $18 per share. The dividend expected to be paid at the end of the coming year is $1.74 and the dividend rate has grown at 5% per year and should continue to do so for the forseeable future.

New common stock if issued must be underpriced $1 per share in floatation costs.

Additionally, the firm’s marginal tax rate is 40 percent.

Questions are:

1) What is the firm’s before-tax cost of debt? (See Table 1)

2) What is the firm’s after-tax cost of debt? (See Table 1)

3) What is the firm’s cost of preferred stock? (See Table 1)

4) What is the firm’s cost of a new issue of common stock?

5) The firm’s cost of retained earning is?

6) The weighted average cost of capital up to the point when retained earnings are exhausted is?

7) If the target market proportion of long term debt is reduced to 15 percent- increasing the proportion of common stock equity to 75 percent, what will be the revised weighted average cost of capital?

4) What is the weighted

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Paraphrase Answers

/in /by

1. Do you believe that union shop agreements are violations of a worker’s freedom of choice in the workplace?  Do you think open shop agreements unfairly penalize workers who pay dues to unions they have elected to represent them in the workplace?

I do not believe union shop agreements are violations of a worker’s freedom of choice in the workplace and I do not believe open shop agreements unfairly penalize workers who pay dues to unions. I believe in people being able to choose where they work knowing if there are union shop agreements or open shop agreements and people can decide whether or not they want to participate in unions or the company that they are interested in working for. For a union shop agreement, as long as the person applying for the job is aware of the agreement, they can decide whether they want to do it or not, so it is not unfair. For the open shop agreement, the ones who decided to join the union did so knowingly and willingly so they are not being unfairly penalized as others were hired and decided not to join the union. It’s all about choice and living with the choices one makes.

2.   2. Some college football and basketball coaches earn huge incomes.  Should college volleyball and swimming coaches be paid comparably?  Should players in the Women’s National Basketball Association (WNBA) be paid the same as their male counterparts in the National Basketball Association (NBA)?  What role should market forces and government play in determining such wages?

This is another example of people choosing their career paths and knowing what they are deciding to do for themselves. If college football and basketball coaches get paid more, it is because college football and basketball generate more revenue than college volleyball and swimming. Because of this, the football and basketball jobs are worth more to the college because of the revenue they generate and the coach positions for them are of higher importance from a business standpoint. I don’t believe market forces or the government should be involved at all in determining such wages. I am totally for less government involvement in the lives of people and business and allowing people and business to have as much freedom as possible. And if colleges want to pay more for basketball and football coaches than they do for swimming and volleyball coaches, that is their choice just as it is the choice of the coaches to accept the jobs or not.

 

3.  3. If a company provides employer-paid child care services to workers with children, should those who don’t have children or don’t need child care services be paid extra?

No, I do not believe workers who don’t have children or don’t need child care services should be paid extra. When someone decides to apply for a job at a company, they should be aware of what they are applying for, what the job is as well as the pay and benefits. If the person accepts the position, then that person accepts the pay, benefits and rules of the company. Just because a benefit is offered that does not apply to someone does not mean that someone should be paid more because he or she does not use it. What if that person did get paid more and then has a family later and decides to partake in the childcare benefit? Then should that person’s extra earnings be taken away? I’m sure they wouldn’t like taking a pay cut now that they want to enjoy the benefits they are now choosing to partake in. Here are the benefits, if one choses to or not to utilize them, that is up to the individual and pay will not be affected either way. You decided to work here, you knew what you were getting into, and it is your free choice to work elsewhere just as it was your free choice to work here knowing what this company’s benefits are and aren’t.

 

 

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"

Panera Bread Case Study

/in /by

Case Study Questions:

1. Complete the financing portion of Panera Bread Company’s 2007 forecast financial statements

a. Include a chart of your financial assumptions.

2. Develop a 5 year Financial Forecast (both Balance Sheet and Income Statement)

3. Describe three possible financial forecasting processes. Discuss the benefits and limitations of each three methods. Describe why you chose the approach you used in this case study.

4. Provide an assessment of the earning quality of Panera Bread in Year 5 of the projected financial statements.

5. Determine the amount of Free Cash Flow Panera has in Year 5 of the projected financial statements. Discuss the importance of Free Cash Flow, and it’s relationship to overall accounting earnings.

6. Develop a table of relevant financial ratios for 2007 and Forecast Year 5; discuss the ratios, their change of the forecast period, and the overall performance of Panera Bread in Forecast Year 5.

7. Given the need for external sources of capital, compare and contrast the advantages and disadvantages of external equity, a long-term note payable, and a short-term line of credit.

Case Study Assumptions:

1. A 5-year financial forecast worksheet has been provided to you on Blackboard.

2. Assume all borrowing are a type of debt, no additional equity will be utilized to raise capital

3. The share repurchase program DOES occur in 2008; and interest expense is equal to 6% of outstanding debt

4. Sales growth is 25% for the first two years; then 5% thereafter.

Case Study – Panera Bread Company

Case Study Questions:

 

1. Complete the financing portion of Panera Bread Company’s 2007 forecast financial statements

a. Include a chart of your financial assumptions.

2. Develop a 5 year Financial Forecast (both Balance Sheet and Income Statement)

3. Describe three possible financial forecasting processes. Discuss the benefits and limitations of each three methods. Describe why you chose the approach you used in this case study.

4. Provide an assessment of the earning quality of Panera Bread in Year 5 of the projected financial statements.

5. Determine the amount of Free Cash Flow Panera has in Year 5 of the projected financial statements. Discuss the importance of Free Cash Flow, and it’s relationship to overall accounting earnings.

6. Develop a table of relevant financial ratios for 2007 and Forecast Year 5; discuss the ratios, their change of the forecast period, and the overall performance of Panera Bread in Forecast Year 5.

7. Given the need for external sources of capital, compare and contrast the advantages and disadvantages of external equity, a long-term note payable, and a short-term line of credit.

 

Case Study Assumptions:

 

1. A 5-year financial forecast worksheet has been provided to you on Blackboard.

2. Assume all borrowing are a type of debt, no additional equity will be utilized to raise capital

3. The share repurchase program DOES occur in 2008; and interest expense is equal to 6% of outstanding debt

4. Sales growth is 25% for the first two years; then 5% thereafter.

 

Case Study Analysis Papers grading rubric

 

Grading Criteria Maximum Points
CompletedPanera Bread Company’s 2007 forecast financial statements. 5
Describe three possible financial forecasting processes. Discuss the benefits and limitations of each method. Describe why you chose the approach you used in this case study. 10
Develop a 5 year Financial Forecast (Balance Sheet and Income Statement) 25
Provide an assessment of the earning quality of Panera Bread in 2012 of the projected financial statements. 15
Determine the amount of Free Cash Flow in 2012; discuss the importance of Free Cash Flowand its relationship to overall accounting earnings. 15
Analysis of financial ratios; including baseline ratios, their change of the forecast periods, and the overall performance in 2012. 10
Given the need for external sources of capital, compare and contrast the advantages and disadvantages of external equity, a long-term note payable, and a short-term line of credit. 10
Proper spelling, punctuation, and APA Formatting 10
Total 100

 

 

 

 

Case Study Analysis Paper Format

Individuals and the weekly workgroup will write a detailed report on the 5 cases. Each workgroup should submit only one report. Individual and Workgroup reports are submitted via Blackboard. (all workgroup members will earn the same grade on the assignment). The report has to contain the following three parts:

(1) Executive summary: One page, double-space (APA Format)

 

(2) Case analysis: Each report should include 4-6 pages of analysis (APA Format) with references to an unlimited number of tables, figures, and notes attached as appendices. The written analysis must be concise, if your written analysis section exceeds 6 pages, only the first 6 pages will be graded. The cover page, the executive summary, and the appendices do not count towards the 4-6 pages of analysis. Your report should address the suggested questions for the case, but students are strongly encouraged to address additional points believed to be important for the analysis.

Submission Deadlines

Written case analyses are due before the start of class on the assigned due date.

What Are the “Right Answers” to Cases?

It should be noted that there are usually no absolute right solutions for study cases. Rather, the best cases are deliberately written to be ambiguous. While there are no right answers, there are good arguments and bad arguments. This course is designed to help the student learn to distinguish between sensible and weak arguments, but not to provide detailed answers to specific cases. Thus, “case solutions” will not be handed out, though I will provide you with “suggested solutions”. If you are uncomfortable with ambiguity, this class may not be for you.

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"