Essays on Equity

Equity Capital For Business Financing
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The paper discusses Rhoda’s case is a young entrepreneur who recently launched a retail business store specializing in the sale of Musical instruments and both Hand books and musical books. Rhoda plans to expand the business by first a market place between musical students and their instructors. With this plan having been written, Rhoda has approached two different banks that have turned his applications down. Now she has decided to raise capital through equity sources of Business Finance. Introduction Equity…...
Financing Mix in Three Chosen Companies
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This paper deals with the issues of financing mix. It explores the advantages and disadvantages of debt-equity financing mix in the success of a firm. The early portion of the paper deals with the advantages and disadvantages of debt financing. The next section deals with the effect of debt financing on the return on shareholders equities. It also includes discussion of optimal capital structure of a firm. The final portion of this paper highlights three chosen companies: The Kroger Company,…...
Cost of equity
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Using the rates yield curve rates as at 11 / 7/08. The bond yield to maturity  will Year/bond 1 2 3 5 10 -1000 -1000 -1000 -1000 -1000 Year 1 1023 25.9 28.8 32.7 39.6 Year 2 1025.9 28.8 32.7 39.6 Year 3 1028.8 32.7 39.6 Year 4 (more…)...
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Corporate finance
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Introduction WACC analyses the cost of sources of financing and also helps investors on an average to know how much interest the company would pay for every dollar it finances which is why WACC is prominently considered as an effective working to invest or receive funds. (more…)...
Accounting 221 Mid Term Exam
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Accounting 221 Exam 1 -- Fall 2003 Multiple Choice (10 points). Select the correct answer for each of the following multiple choice questions. 1. Assets may best be defined as: a. Economic resources invested by the owners of a business. b. Tangible economic resources of value. c. Economic resources invested by the creditors of a business. d. Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events. e. Probable future economic…...
AccountingBalance SheetEconomyEquityFinance
Equity Theory and Interpersonal Attraction
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Human beings have a desire to be accepted as part of a group. They also have a want to create and hold on to meaningful relationships with other individuals. These interactions with other individuals are known as social relations. According to Polk (2011), trust, honest, respect, and a care for others are the ingredients that most relationships are created and based on (Polk, 2011). In most cases, these relationships that individuals search for and create are sometimes the most important…...
Equity and trusts problem question answers
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Equity and trusts problem question (1500 words) This scenario relates to the purported creation of a trust. We are told that Michael has said to his daughter that “I promise to transfer to you within the year certain property”. The first issue to determine is whether this is sufficient to create a trust. One of the principal requirements for the successful establishment of a trust is certainty, and in this instance, certainty of intention is relevant. Knight v Knight (1840)…...
Financial Analysis of Cadbury Schweppes Company
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The capital structure of Cadbury Schweppes based on its 2006 balance sheet shows that the company uses more financial obligation than equity to finance its operations. The business's financial obligation to total investors equity ratio of the company is more than fifty percent, while its financial obligation to equity ratio is at 1. 30. A high financial obligation to equity ratio means that the business relies heavily in debt funding. A high financial obligation to equity ratio does not necessarily…...
Equity Theory and Social Exchange Theory in Psychology
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In this essay I aim to describe two theories (Equity Theory and Social exchange theory) of relationships and to consider how they might influence the therapist engaged in couples counseling, noting their similarities and differences. Equity theory is a theory about fairness. Its application to close relationships has been primarily advanced by Elaine Hatfield (previously known as Elaine Walster) and her colleagues in the book Equity: Theory and Research (Walster, Walster, and Berscheid 1978). The book outlines four interlocking propositions…...
ChangeEquityFairnessHuman NaturePsychologySocial Psychology
Nike Inc: Cost of Capital
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The Weighted Average Cost of Capital (WACC) is the overall required rate of return on a firm as a whole. It is important to calculate a firm’s cost of capital in order to determine the feasibility of a particular investment for a firm. I do not agree with Joanna Cohen’s WACC calculation. She calculated value of equity, value of debt, cost of equity, and cost of debt all incorrectly. For value of equity, Joanna simply used the number stated on…...
Equity Warrant Bonds
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Equity warrant bonds are bonds issued with equity warrants attached. Warrants are similar to share options, and give their holder the right but not the obligation to subscribe for a fixed quantity of equity stocks in the company at a future date, and at a fixed subscription price (exercise price). When bonds are issued with warrants, the warrants are detachable and can be sold in the stock market separately from the bonds. Investors might therefore subscribe to an issue of…...
EquityFinanceFinancial MarketsStock
Bidding For Hertz
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EXECUTIVE SUMMARY In April 2005, Ford announced its intention to investigate possible strategic alternatives for Hertz. At the same time, Ford’s stock price went down significantly. This negative reaction from the market shows Ford’s lack of confidence in its future operation, since Hertz is one of the strongest subsidiaries and revenue sources for Ford. Even though Ford would lose significant value of itself in this transaction, the slump in Ford’s main business especially in North American segment and a possible…...
BusinessEquityMarketingStrategic Management Process
Bidding on the Yell Group
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Introduction Yell Group consists of two businesses that are operating across countries. Yellow Page is a classified directory business in the UK, while Yellow Book is an independent directory business in the USA. These businesses are currently owned by British Telecom which is under pressure to reduce its heavy debt load and had been wavering for months about the future of these two Yellow Pages divisions. Apax Partner and Hick Muse are two private equity firms that are interested in…...
The Case Analysis of Equity Funding
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The collapse of Equity Funding had a far-reaching influence on business practices and institutions. Although it happened over 30 years ago, the lessons from Equity Funding are still meaningful and constructive nowadays. Auditors of Equity Funding failed to collect sufficient evidence, check internal control and substantiate computer system. The audit premise----- understanding internal control system AUS 402.41 requires the auditor to obtain an understanding of internal control relevant to the audit. The effective internal control can provide “protection against human…...
BusinessEquityInternal Control
Difference Between Branding and Brand Equity
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“Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending”. (Bard qtd. in. ThinkExist. com) This quote shows one fact that the process of ‘branding’ is endless. Because, simply, when ‘brand equity’ is known or measured, the brand could be protected and managed properly. This essay aims at giving an overview of the ‘branding’ and ‘brand equity’ terms or concepts to show the difference between both of…...
Accounting Basics: Assets, Liabilities, Equity
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Accounting, per se, is based on five types of accounts namely: assets, liabilities, equity, income and expense. These account types belong either of the Balance sheet accounts or Income and Expense accounts. Assets, liabiliites, and equity fall under the balance sheet account and the rest goes to the income and expense accoutnts. Definining each, asset is composed of a group of things that an individual or an entity owns. These includes tangible items like car, cash or often stocks (intangible)…...
AccountingBalance SheetEquity
Debt versus Equity Financing Paper
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In the accounting industry, financing remains an important concept, as many organizations are reliant on them for financial stability and longevity. Although there are a plethora of financing options and types to choose from, the focus of the work will revolve around debt and equity financing. These two commonly used forms of financing are important as they are both unique in how they are utilized. The author of this piece will address these two financing options while providing examples of…...
Cooper case Solution
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Introduction Cooper Industries, Inc. is a manufacturer of heavy machinery and equipment. It has acquired some companies in the past as part of their expansion plans. Cooper acquires companies that are leading in their area of business, have a large market share and is the leading company in their area of operation. Currently, Cooper is focusing on building a hand tool business with a full product line that would use a common sales and distribution system and joint advertising. In…...
BusinessBusiness ManagementCompanyCorporationEconomyEquity
Global Equity Markets: The Case of Royal Dutch and Shell
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In early January 1996, Ms. Joanne Partridge, Director of Research at High Street Global Advisors (“High Street”), a Boston-based global investment management organization, was studying the price behavior of the shares of Royal Dutch Petroleum and Shell Transport and Trading. It seemed that Royal Dutch and Shell should trade in fixed proportions since they represented equivalent classes of shares of the same holding company. However, the ratio of share prices had been anything but constant. For example, Shell traded at…...
Business NewsEconomyEquityStockTax
Investing in Sponsor-Backed IPOs: The Case of Hertz
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1. Why are the private equity sponsors pursuing an IPO of Hertz at this time – that is, what is the purpose of the IPO? The sponsors wanted cash in order fund another special dividend. They felt that even though they had only owned the company for short time, they were in the perfect position to sell it. There are several reasons why 2006 was an opportune time for the IPO of Hertz. The market was on the rise with…...
Equity & Expectancy Theory of Motivation
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Motivation Explain Adams equity theory Adams’ equity theory is a motivational model that attempts to explain the relationship between what an employee puts into their job (input), what they get out of it (output) and the fairness and justice exchanged between the two (Cosier & Dalton, 1983). Inputs include all factors that are perceived as necessary to obtain a return, such as effort, loyalty, hard work, commitment, skill, ability, flexibility, tolerance, determination, heart and soul, enthusiasm, trust in the employer…...
Assesing Company’s finance
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SALES GROWTH Throughout the four-year duration ended December 31, 2008, SciTronics' sales grew at a 20.69 % ($ 244,000/$ 115,000) = (1+ r) ^ 4 substance rate. There were no acquisition or divestitures. PROFITABILITY RATIO: How Profitable is the Company? 1. SciTronics' profit as a portion of sales in 2008 was 5.73% (14000/244000). 2. This represented an increase from 3.4% (5000/147000) in 2005. 3. SciTronics had a total of $112, 000 (75,000 +20,000 +7,000 +10,000) of capital at year-end 2008…...
Business Management of Blackstone Group Corporation
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The Blackstone Group (Blackstone) is a private equity firm founded in 1985 by two former employees of Lehman Brothers. In May 2007 the firm had $88.4 billion under management and had grown 41% annually since 2001. The firm operated in several business groups but distinguished itself from other firms by extensive collaboration across divisions. It was divided into Corporate Private Equity, Real Estate Funds, Marketable Alternative Asset Management, Corporate Debt Funds, and Advisory Services. In 2007 Blackstone started to evaluate…...
Business ManagementCorporationEquityInvestmentStockStock Market
Venture Capital and Private Equity – Yieldex
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1. Should Cosman accept the offer from Turn to acquire Yieldex? To support your answer, please consider the following optimistic scenario for Yieldex if it declines Turn’s offer: a) Yieldex completes a Series A financing along the lines described in the case, in which the new Series A shares are priced at $0.50. b) One year later, Yieldex completes a Series B financing for $5.7 million at a price of $1.00 per share. c) One year later, Yieldex completes a…...
BusinessEquityVenture Capital
Nike: The Weighted Average Cost of Capital
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1.What is the WACC and why is it important to estimate a firm’s cost of capital? Do you agree with Joanna Cohen’s WACC calculation? Why or why not? Answer: The cost of capital refers to the maximum rate of return a firm must earn on its investment so that the market value of company's equity shares will not drop. This is a consonance with the overall firm's objective of wealth maximization. WACC is a calculation of a firm's cost of…...
Financial ratios: How to use financial ratios to maximise value and success for your business
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Capital structure is basically the combination of equity and debt that a firm uses to finance its operations (Damodaran, 2005). Capital structure normally refers to the debt-to-equity ratio of a firm. This basically provides how risky a firm is hence a firm that is financed by more debt poses greater risk as it is relatively highly leveraged. For this reason, firms should strive to employ an optimal capital structure which is the best debt-to-equity ratio that actually maximizes its value.…...
Business SuccessEquity
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FAQ about Equity

Financial ratios: How to use financial ratios to maximise value and success for your business
...In regards to the above debt-to-equity values, eBay should have a capital structure of 50% debt and 50% equity. This will ensure a balance between the company’s ideal debt-to-equity ranges hence maximizing the value of the company. The Clorox Compa...
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