Order this paper written from scratch on discount

Mini Case 5
The purpose of this assignment is to explain core concepts related to cash distributions and capital structure.Mini Case 5
Read the Chapter 14 Mini Case on page 586 in Financial Management: Theory and Practice. Using complete sentences and academic vocabulary, please answer questions a and b.
APA format is not required, but solid academic writing is expected.
IntegratedWaveguideTechnologies,Inc.(IWT)isa6-Mini Case 5year-oldcompanyfoundedbyHuntJacksonandDavidSmithfieldtoexploitmetamaterialplasmonictechnologytodevelopandmanufactureminiaturemicrowavefrequencydirectionaltransmittersandreceiversforuseinmobileInternetandcommunicationsapplications.IWT’stechnology,althoughhighlyadvanced,isrelativelyinexpensivetoimplement,anditspatentedmanufacturingtechniquesrequirelittlecapitalascomparedtomanyelectronicsfabricationventures.Becauseofthelowcapitalrequirement,JacksonandSmithfieldhavebeenabletoavoidissuingnewstockandthusownalloftheshares.BecauseoftheexplosionindemandforitsmobileInternetapplications,IWTmustnowaccessoutsideequitycapitaltofunditsgrowth,andJacksonandSmithfieldhavedecidedtotakethecompanypublic.Untilnow,JacksonandSmithfieldhavepaidthemselvesreasonablesalariesbutroutinelyreinvestedall after-Mini Case 5taxearningsinthefirm,sodividendpolicyhasnotbeenanissue.However,beforetalkingwithpotentialoutsideinvestors,theymustdecideonadividendpolicy.YournewbossattheconsultingfirmFlickandAssociates,whichhasbeenretainedtohelpIWTprepareforitspublicoffering,hasaskedyoutomakeapresentationtoJacksonandSmithfieldinwhichyoureviewthetheoryofdividendpolicyanddiscussthefollowingissues.
a.(1)Whatismeantbytheterm“distributionpolicy”?Howwill the mix of dividend pay outs and stock has repurchaseschangedovertime?
(2)Theterms“irrelevance,”“dividendpreference,”or“bird-in-the-hand,”and“taxeffect”havebeenusedtodescribethreemajortheoriesregardingthewaydividendpayoutsaffectafirm’svalue.Explaintheseterms,andbrieflydescribeeachtheory.
(3)Whatdothethreetheoriesindicateregardingtheactionsmanagementshouldtakewithrespecttodividendpayouts?
(4)Whatresultshaveempiricalstudiesofthedividendtheoriesproduced?Howdoesallthisaffectwhatwecantellmanagersaboutdividendpayouts?
b.Discuss
(1) The informationcontent,orsignaling, hypothesis
(2) The clienteleeffect
(3) Their effectsondistributionpolicy

Mini Case 6 Benchmark
The purpose of this assignment is to explain core concepts related to business risk and recommend sound financial decisions based on analysis of a firm's capital structure and capital budgeting techniques.
Read the Chapter 15 Mini Case on page 626 in Financial Management: Theory and Practice. Using complete sentences and academic vocabulary, please answer questions a and b.
Using the mini case information, write a 250-500 word recommendation of the financial decisions you propose for this company based on an analysis of its capital structure and capital budgeting techniques.
APA format is not required, but solid academic writing is expected.
AssumeyouhavejustbeenhiredasabusinessmanagerofPizzaPalace,aregionalpizzarestaurantchain.Thecompany’sEBITwas$50millionlastyearandisnotexpectedtogrow.Thefirmiscurrentlyfinancedwithallequity,andithas10millionsharesoutstanding.Whenyoutookyourcorporatefinancecourse,yourinstructorstatedthatmostfirms’ownerswouldbefinanciallybetteroffifthefirmsusedsomedebt.Whenyousuggestedthistoyournewboss,heencouragedyoutopursuetheidea.Asafirststep,assumethatyouobtainedfromthefirm’sinvestmentbankerthefollowingestimatedcostsofdebtforthefirmatdifferentcapitalstructures:
Percent Finance with debt wd rd
0% -
20 8.0%
30 8.5%
40 10%
50 12%

Ifthecompanyweretorecapitalize,thendebtwouldbeissuedandthefundsreceivedwouldbeusedtorepurchasestock.PizzaPalaceisinthe40%state-plus-federalcorporatetaxbracket,itsbetais1.0,therisk-freerateis6%,andthemarketriskpremiumis6%.
a.Usingthefreecashflowvaluationmodel,showtheonlyavenuesbywhichcapitalstructurecanaffectvalue.
b.(1)whatisbusinessrisk?Whatfactorsinfluenceafirm’sbusinessrisk?
(2)Whatisoperatingleverage,andhowdoesitaffectafirm’sbusinessrisk?Showtheoperatingbreak-evenpointifacompanyhasfixedcostsof$200,asalespriceof$15,andvariablecostsof$10.
c.Now,todevelopanexamplethatcanbepresentedtoPizzaPalace’smanagementtoillustratetheeffectsoffinancialleverage,considertwohypotheticalfirms:FirmU,whichusesnodebtfinancing,andFirmL,whichuses$10,000of12%debt.Bothfirmshave$20,000inassets,a40%taxrate,andanexpectedEBITof$3,000.
(1)Constructpartialincomestatements,whichstartwithEBIT,forthetwofirms.
(2)NowcalculateROEforbothfirms.
(3)WhatdoesthisexampleillustrateabouttheimpactoffinancialleverageonROE?
d.Explainthedifferencebetweenfinancialriskandbusinessrisk.
e.WhathappenstoROEforFirmUandFirmLifEBITfallsto$2,000?Whatdoesthisimplyabouttheimpactofleverageonriskandreturn?
f.Whatdoescapitalstructuretheory attempt todo?Whatlessonscanbelearnedfromcapitalstructuretheory?BesuretoaddresstheMMmodels.
g.Whatdoestheempiricalevidencesayaboutcapitalstructuretheory?Whataretheimplicationsformanagers?
h.Withtheprecedingpointsinmind,nowconsidertheoptimalcapitalstructureforPizzaPalace.
(1)Foreachcapitalstructureunderconsideration,calculatetheleveredbeta,thecostofequity,andtheWACC.
(2)Nowcalculatethecorporatevalueforeachcapitalstructure.
i.DescribetherecapitalizationprocessandapplyittoPizzaPalace.Calculatetheresultingvalueofthedebtthatwillbeissued,theresultingmarketvalueofequity,thepricepershare,thenumberofsharesrepurchased,andtheremainingshares.Consideringonlythecapitalstructuresunderanalysis,whatisPizzaPalace’soptimalcapitalstructure?

Mini Case 7
The purpose of this assignment is to explain core concepts related to stock, equity, debt, and the roles they play in making tactical financial decisions.
Read the Chapter 20 Mini Case on pages 824-825 in Financial Management: Theory and Practice. Using complete sentences and academic vocabulary, please answer questions a and b.
APA format is not required, but solid academic writing is expected.
PaulDuncan,financialmanagerofEduSoftInc.,isfacingadilemma.Thefirmwasfounded5yearsagotoprovideeducationalsoftwarefortherapidlyexpandingprimaryandsecondaryschoolmarkets.AlthoughEduSofthasdonewell,thefirm’sfounderbelievesanindustryshakeoutisimminent.Tosurvive,EduSoftmustgrab market share now,andthiswillrequirealargeinfusionofnewcapital.Becauseheexpectsearningstocontinuerisingsharplyandlooksforthestockpricetofollowsuit,Mr.Duncandoesnotthinkitwouldbewisetoissuenewcommonstockatthistime.Ontheotherhand,interestratesarecurrentlyhighbyhistoricalstandards,andthefirm’sBratingmeansthatinterestpaymentsonanewdebtissuewouldbeprohibitive.Thus,hehasnarrowedhischoiceoffinancingalternativesto(1) preferred stock,(2)bondswithwarrants,or(3)convertiblebonds.AsDuncan’sassistant,youhavebeenaskedtohelpinthedecisionprocessbyansweringthefollowingquestions.
a.Howdoespreferredstockdifferfrombothcommonequityanddebt?Ispreferredstockmoreriskythancommonstock?Whatisfloatingratepreferredstock?
b.Howcanknowledgeofcalloptionshelpafinancialmanagertobetterunderstandwarrantsandconvertibles?

Leave a Comment