Everything being equal, the WACC of a firm increases as the beta and rate of return on equity increases, as an increase in WACC means a decrease in valuation and a higher risk. A firms WACC is a very important both to the stock market for stock valuation purposes and to the company's management for capital budgeting purposes. In an analysis of a potential investment by the company, investment projects that have an expected return that is greater than the company's WACC will generate additional free cash flow and create positive NPV for stockholders. Since the WACC is the minimum rate of return required, the managers in the company should invest in the projects that generate returns in excess of the WACC. WACC is set by the investors (or markets), not by managers.
The basic answer is that share repurchases are great when the share price is undervalued, and not-so-great when the share price is overvalued. To put it into a more useful context, if you would otherwise reinvest your dividends or invest new capital into the company at current stock prices, then share repurchases are useful to you because the company basically does it for you. The alternative is that the company could pay you a higher dividend, but you’d be taxed on that dividend and reinvest it into the company anyway. On the other hand, if you would not reinvest dividends or invest new capital into the company at current prices, then share repurchases are not in alignment with your current outlook, and it would be better for you to receive a higher dividend. Something else to be considered is that when a company uses money for share repurchases when it could be paying a higher dividend instead, the company’s management is limiting your control and increasing theirs.
2) Volume-Oriented * Sets prices In order to maximize dollar or unit sales volume. This objective sacrifices profit margin In favor of high product turnover. 3) Market Demand * Sets prices In accordance with customer expectations and specific buying situations. This objective is often known as "charging what the market will bear." 4) Market share * Designed to increase or maintain market share regardless of fluctuations in industry sales.
ANS: True PTS: 1 REF: 2 NAT: AACSB Analytic | AACSB Strategy 3. T F Superior performance is typically thought of in terms of one company's profitability relative to that of other companies in the same or a similar kind of business or industry. ANS: True PTS: 1 REF: 2 NAT: AACSB Analytic | AACSB Strategy 4. T F The more efficient a company is, the higher are its profitability and return on invested capital. ANS: True PTS: 1 REF: 2 NAT: AACSB Analytic | AACSB Strategy 5.
In general terms, a Al Hadharah Boustead REIT company's valuation and debt to equity ratio will improve after going public, and at the same time, it will make it possible for Al Hadharah Boustead REIT company to receive much better terms from lenders. Undertaking IPO services and offering securities to the investment public will be useful to Al Hadharah Boustead REIT company's management and directors retain a large degree of control. ------------------------------------------------- 窗体顶端 Since the IPO garners a great amount of publicity
The company’s central value proposition is the benefit of increased productivity. Therefore, it should focus on how the product achieves this through the improved design of the scope, reduction of sedation which could lead to increased number of procedures performed and reduced costs per procedure, and reduced procedure time from 45 minutes to an hour long to only 30 minutes even for “difficult cases”. After those three topics are covered, the projected expenses, anticipated revenue, condensed market plan of action, and terms of the IP protection should be explained. I believe that the company should change their investor pitch to quickly and easily inform how the product is greater than what’s currently available in the market. As stated in the case, the value propositions are concrete but the evidence to support it are ambiguous.
From financial point of view, Ben should Ritter College of Business at Wilton University as the NPV1 ($1,328,787.60) of this option is higher than the NPV2($1,246,722.79 ) of the Bradley School of Business at Mount Perry College. Using the NPV values, the net present value rule decides if an acquisition or project is worth it. A higher NPV is always desirable as it leads to greater wealth creation. Higher NPV means more dollars earned if we take up the project. Calculations attached.
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company. The quick ratio is calculated as: What Does Receivables Turnover Ratio Mean? An accounting measure used to quantify a firm's effectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets.
Before we explore how a reduction in the interest rates leads to an increase in consumption we must first define what it exactly means to consume. Mainstream economists such as Tim Harford define consumption as the spending by house holds on consumer products and services. As the interest rate decreases it leads to consequential reactions on behalf of consumers, one of these actions is an increase in the level of goods consumed. This is a result of it being cheaper to borrow money from banks and other financial institutions, this meaning purchases which have been prolonged or “put off” by consumers can now be readily purchased. This is an effect of a lower opportunity cost as the overall cost associated with borrowing has decreased and the marginal benefit of saving has increased, meaning consumers will receive more of a benefit if they purchase goods on credit based agreements opposed to saving, leading to an increase in the amount of credit transactions.
B. demand may be either elastic or inelastic. C. an increase in price will increase total revenue. D. demand is elastic.Answer | | | | | Selected Answer: | 3. c | Correct Answer: | 3. c | | | | | * Question 3 10 out of 10 points | | | 3. The main determinant of elasticity of supply is the: . A. number of close substitutes for the product available to consumers.