Premium Essay

A Rose by Any Other Name

In: Business and Management

Submitted By umeshkalekar
Words 18877
Pages 76
Corporate Finance Lecture Note Packet 2 Capital Structure, Dividend Policy and Valuation

B40.2302

Aswath Damodaran

Aswath Damodaran!

1!

Capital Structure: The Choices and the Trade off

Neither a borrower nor a lender be

Someone who obviously hated this part of corporate finance

Aswath Damodaran!

2!

First Principles

Aswath Damodaran!

3!

The Choices in Financing



There are only two ways in which a business can make money.

• The first is debt. The essence of debt is that you promise to make fixed payments in the future (interest payments and repaying principal). If you fail to make those payments, you lose control of your business.

• The other is equity. With equity, you do get whatever cash flows are left over after you have made debt payments.

Aswath Damodaran!

4!

Global Patterns in Financing…

Aswath Damodaran!

5!

And a much greater dependence on bank loans outside the US…

Aswath Damodaran!

6!

Assessing the existing financing choices: Disney, Aracruz and Tata Chemicals

Aswath Damodaran!

7!

Financing Choices across the life cycle

Revenues $ Revenues/ Earnings Earnings

Time

External funding needs

High, but constrained by infrastructure

High, relative to firm value.

Moderate, relative to firm value.

Declining, as a percent of firm value

Low, as projects dry up.

Internal financing

Negative or low Owner’s Equity Bank Debt Stage 1 Start-up

Negative or low

Low, relative to funding needs Common stock Warrants Convertibles Stage 3 High Growth

High, relative to funding needs Debt

More than funding needs

External Financing Growth stage

Venture Capital Common Stock Stage 2 Rapid Expansion

Retire debt Repurchase stock Stage 5 Decline

Stage 4 Mature Growth

Aswath Damodaran!

Financing…...

Similar Documents

Free Essay

The Name of a Rose

...ANALIZA ROMANA 'IME RUŽE' Eco se prvenstveno proslavio svojim književnim djelima koja su nastala primjenom semiotike. To su Ime ruže, Foucaltovo njihalo i Otok prvoga dana. Sam je Eco svoje romane okarakterizirao kao «tvrdoglave pokušaje da se razumiju mehanizmi po kojima svijetu oko sebe dajemo značenje». (Nöth, 2004: 126) Umberto Eco je svoj roman utemeljio na rukopisu redovnika iz 14. stoljeća. Eco je taj rukopis preveo na talijanski s, kako šaljivo kaže, neogotičkog prijevoda na francuski latinskog izdanja iz 17. stoljeća djela koje je krajem 14. stoljeća na latinskom napisao njemački redovnik. (Eco, 2004: 8) Na samome početku romana objašnjeno je računanje vremena u djelu koje je ustanovljeno crkvenim kanonima i vremenima molitve. Tada čitatelj odmah sklapa fikcionalni sporazum s modelom autora jer se sam čitatelj vjerojatno nikad nije našao u situaciji da na taj način mjeri vrijeme. Također prihvaća nacrt samostana i njegovu lokaciju unatoč mogućnosti da čitatelj nikad nije bio u Italiji, a i da je bio, prihvaća činjenicu da se na objašnjenom mjestu nalazio samostan bez obzira na moguću pogrešku modela autora. Treba također razjasniti tko govori u romanu. Jonathan Culler u svojoj Književnoj teoriji skreće pozornost na to da, pri interpretaciji teksta, treba obratiti pozornost na nekoliko važnih pitanja: * Tko govori? – Imamo pripovjedača u «prvom licu» koji može biti protagonist, a isto tako može biti manje važan lik u djelu, a i samo promatrač. Također......

Words: 2729 - Pages: 11

Free Essay

By Any Other Name

... Lawren Bradberry ENG 501-Online #11389 November 15, 2012 By any other name… We should all be as wise as Shakespeare. In Romeo and Juliet, he wrote, “What's in a name? / that which we call a rose / By any other name would smell as sweet;” (2.2.43-44). Debates continue regarding the proposed changes to the name of Post-Traumatic Stress Disorder (PTSD) in the Diagnostic and Statistical Manual (DSM) to Post Traumatic Stress Injury (PTSI). Some argue the stigmatizing power behind the word disorder creates a barrier to service members and veterans seeking care for mental health needs. Supporters assert changing the name will “will reduce the stigma that stops troops from seeking treatment” (Jaffe, 2012). Retired Army General Peter Chiarelli, a major supporter of the change, argues: Calling the condition a "disorder" perpetuates a bias against the mental health illness and "has the connotation of being something that is a pre-existing problem that an individual has" before they came into the Army and "makes the person seem weak," (as cited in Sagalyn, 2012, p. 1; emphasis added) As of May 2012, 247,243 veterans were seen for potential PTSD at Veterans Health Administration facilities following their return from Iraq or Afghanistan (Veterans Administration [VA], 2012). If the “D” is replaced with and “I”, will this significantly diminish the stigma reported by General Chiarelli? I argue that the stigma is not in the name; the stigma is within and perpetuated by military culture......

Words: 1509 - Pages: 7

Premium Essay

A Rose by Any Other Name Case Study

...Case One The Dilemma: Rose Partyware has been working towards creating its own brand of party ware supplies to give it a competitive edge in an industry of generic party supply manufacturers. Recently, Rose Partyware was presented with the opportunity to produce a private-label brand of party goods. This alternative would provide Rose with a stable revenue source as well as opportunities to create private-labels for other retailers. However, pursuing this option would drain Rose’s resources and prevent them from launching their own branded goods. Additionally private-labels would make Rose into a manufacturer-only role and limit its long-term prospects, but having its own brand is very costly to promote and comes with many short-term risks. Possible Solutions: 1. Proceed with Rose Partyware branded party supplies. * Retain loyalty of small independent retailers (35% of sales) * Brand advantage in party supplies versus other generic suppliers * Positive long-term returns * Control over pricing, branding, and distribution of goods * Short-term technological advantage 2. Pursue manufacturing private-label goods for retailers. * Retain largest Rose customer (20% of sales) * Supplier of choice in private-label manufacturing * Lowest short-term risk * Cheapest option in terms of change to company structure & spending The Decision: If I were in Tom Roses’ position I would choose to proceed with Rose Partyware branded party......

Words: 350 - Pages: 2

Premium Essay

Roses

... Ecuadorian Roses William Hardy International Business Professor Alexia Priest Post University July 6, 2013 INTRODUCTION On special occasions or just because, we send rose to our loved ones, have you ever wonder where those roses came from? Did they come from the United States or from another country? What is the process for growing these beautiful flowers that so many people love? This research will answer many of those questions. What is the basis of Ecuador’s comparative advantage in the production of roses? Ecuador has a comparative advantage when it comes to the production of roses. Ecuador not only has plenty of workers to help cut the rose stems at the farm, but also the landscape and climate in Ecuador is beneficial to the growth. The bushes are protected by 20-foot-high canopies of plastic sheeting. The combination of intense sunlight, fertile volcanic soil, an equatorial location, and high altitude makes for ideal growing conditions, allowing roses to flower almost year-round. This farmland produces prime roses. They have he heads and unusually vibrant colors, including ten different reds, from bleeding heart crimson to rosy lover’s blush. This helps Ecuador’s because since they have such a great production of roses they are able to sell them for premium prices in stores from New York to London. Most Ecuadorean roses are sold in the United States or Europe. Who in these countries benefits from the importation of Ecuadorean roses, and how do they benefit? Who...

Words: 714 - Pages: 3

Premium Essay

Rose

...A Rose by Any Other Name Case Study Case One The Dilemma: Rose Partyware has been working towards creating its own brand of party ware supplies to give it a competitive edge in an industry of generic party supply manufacturers. Recently, Rose Partyware was presented with the opportunity to produce a private-label brand of party goods. This alternative would provide Rose with a stable revenue source as well as opportunities to create private-labels for other retailers. However, pursuing this option would drain Rose’s resources and prevent them from launching their own branded goods. Additionally private-labels would make Rose into a manufacturer-only role and limit its long-term prospects, but having its own brand is very costly to promote and comes with many short-term risks. Possible Solutions: 1. Proceed with Rose Partyware branded party supplies.   * Retain loyalty of small independent retailers (35% of sales)   * Brand advantage in party supplies versus other generic suppliers   * Positive long-term returns   * Control over pricing, branding, and distribution of goods   * Short-term technological advantage 2. Pursue manufacturing private-label goods for retailers.   * Retain largest Rose customer (20% of sales)   * Supplier of choice in private-label manufacturing   * Lowest short-term risk   * Cheapest option in terms of change to company structure & spending The Decision: If I were in Tom Roses’ position I would choose to proceed with Rose......

Words: 317 - Pages: 2

Premium Essay

Rose

... HBR CASE STUDY Rose Partyware's largest retail customer has decided to create a private-label line of party goods-and wants Rose to manufacture it. Should Rose put its efforts behind its own brand instead? TOM ROSE hated to go to a meeting with ice cream on his pants. But Rose Partyware's after-school party-a monthly gesture of goodwill to the local community and, not incidentally, a field trial for products the company was developing- had confirmed his suspicions that one of the new ice-cream bowls was just too shallow. The five-year-old who had demonstrated that fact had been sitting right next to him. So here he was getting ready to listen to a major presentation, with paper towels in his hands. "Go ahead, Cassie," Tom said to his marketing director. "It'll dry or harden--or something. Thankfully, it's my last meeting of the day!" He could tell that Cassie Martin was excited about the presentation she was going to make to the top management team. Tom had personally recruited her about a year ago to spearhead the biggest strategic initiative in Rose's history: the launch of a branded line of party ware. In fact, it was the first time a company in the party goods industry had contemplated a branding effort, at least in the 30 years Rose had been in business. Party Lines Rose manufactured a wide variety of paper goods- plates, bowls, cups, napkins, tablecloths, favors, crepe-paper streamers, and so forth- for birthday and holiday parties and other social events.......

Words: 6132 - Pages: 25

Premium Essay

Leadership Challenge: a Quote by Any Other Name

...As the director of sales for the company of Bright Right Plastics, Ralph Dickerson has been through many changes inside the company and he recognized that a new change was needed when it came to the quota system. The old quota system had given the company great success through the years; however, over the last couple of years the company received complaints from customers about product service. When Dickerson had been called for a meeting with the CEO he knew he had to make a decision for the company’s future; should they stay with the old quota system or should they move forward with a new quota system based on the activity quota system? Answers to Leadership Challenge Questions 1. An advantage of the sales volume quota is that it emphasizes the dollar sale and that the quota is related to the market potential and that makes the quota more credible and easy to understand for the salesperson. The sales volume quota is also consistent with what the salesperson visualizes his or hers job to be – which is to sell. Another advantage is how the firm expresses their sales volume quota which can be in dollars, physical units or points. The firm can, for example, present that for each dollar sold from a particular product the salesperson receives a certain number of points. The sales volume quota also allows the sales managers to design their own quota system that can promote certain desired goals, which could be that they set last year’s sales volume quota as a foundation for the...

Words: 467 - Pages: 2

Free Essay

A Murderer by Any Other Name

...Brian Stoller Ms. Baker ENG1322-04 4 February 2013 A Murderer by any other name…. During my stay on the fabulous the Fort Hood Military Reservation I had the distinct pleasure to deploy with the 1st Cavalry Division to the desert paradise that is Iraq. I spent the majority of 2009 in the war-torn wasteland and was lucky enough to get my two week vacation near the end of October. While on vacation in the Chicago land area, I received a strange phone call from my boss. He asked me if I was on Fort Hood right now. Thinking it was a strange question, I said “no I’m not, why?” he said turn on CNN and he had to go and abruptly hung the phone up. Thinking how odd the whole thing was I turned on the TV and was shocked at what I was looking at. It was near real time coverage of a mass shooting on Fort Hood. Initial reports were sketchy but what they knew was that there were many dead and/or wounded, and the shooter was in uniform. Later it was revealed that the shooter was an Army psychologist by the name of MAJ Nadal Hassan, that he may or may not have acted alone, and he was a terrorist. This is a term in the US which is attached with a particular gravity, and extreme recourse, for terrorist are not mere criminals, but enemies of the state. There are a number of constitutional powers that are weapons against such an adversary. But is MAJ Nidal Hassan truly a terrorist, or is this just a workplace shooting? As the almighty political media spin machines power up, they were......

Words: 1648 - Pages: 7

Free Essay

What’s in a Name? – Would Whistle-Blowing Be a More Acceptable Practice If It Was Called by Another Name? What Other Names Might It Be Called That Would Find Acceptance in Corporate Culture?

...What’s in a name? – Would whistle-blowing be a more acceptable practice if it was called by another name? What other names might it be called that would find acceptance in corporate culture? Organizations should use a more acceptable name to encourage employees to come forward with concerns or complaints of wrongdoings within the company. Whistle-blowing may be a strong incentive for some individuals. However, often both the whistle-blower and the individual involved in the wrongdoing are treated as suspect. Whether or not the allegations are eventually proven, both the whistle-blower and those accused of wrong doing pay a price. Corporate culture has the responsibility to provide employees with compliance policies that will assist them with programs and policies designed to encourage employees to raise safety concerns. Groups that have recently assumed or are considering assuming these forms of strategies which are commonly referred to as whistleblower policies stand to learn from establishments that have years of knowledge in initiating and refining them. A whistle-blower may innocently come forward with allegations against another, only to face severe scrutiny and charges of disloyalty. Some experts mention that more than 60 percent of whistle-blowers suffered at least one damaging result, for example being pressured to withdraw their charges, being ostracized by coworkers, and even being threatened with a lawsuit. Whistle-blowers can be fired and......

Words: 409 - Pages: 2

Free Essay

Rose

...http://www.studymode.com/essays/Perfume-Out-Of-Rose-Petals-1856978.html The smell of a rose is timeless and romantic, and is a very popular scent used in perfumes. Without breaking the bank, you can make a very simple and personal rose petal perfume right in your own kitchen. An excellent way to use the blooms from your own garden, homemade rose petal perfume is an easy project that would make a delightful gift--if you can bear parting with it once it's done! Other People Are Reading * How to Make Attar Perfume From Flowers * How to Make Perfume Without Alcohol Things You'll Need * 6 cups of rose petals, stamens removed * Large pot * Distilled water * Cheesecloth * Funnel * Bowl * Vodka * Rose essential oil * Glycerin * Eyedropper * Perfume bottle Instructions 1. * 1 Bring a large pot of water to boil on the stove. Add the 6 cups of rose petals to the water and reduce the heat to simmer. Simmer the rose petals for 2 hours. * 2 Remove the rose petals from the heat and strain the liquid. Pour the mixture through a funnel slowly onto a cheesecloth placed over a large bowl. Twist the cheesecloth and wring out all of the liquid from the cooked rose petal pulp. Allow the rose water to cool to room temperature. * Sponsored Links * The Aromatherapy Company Essential Oils, Aromatherapy Course Organic Spa and retail products thearomatherapycompany.co.uk * 3 Measure out 2 cups of the......

Words: 329 - Pages: 2

Free Essay

Rose

...serrated margin, and often a few small prickles on the underside of the stem. Most roses are deciduous but a few (particularly from South east Asia) are evergreen or nearly so. The hybrid garden rose "Amber Flush" The flowers of most species have five petals, with the exception of Rosa sericea, which usually has only four. Each petal is divided into two distinct lobes and is usually white or pink, though in a few species yellow or red. Beneath the petals are five sepals (or in the case of some Rosa sericea, four). These may be long enough to be visible when viewed from above and appear as green points alternating with the rounded petals. There are multiple superior ovaries that develop into achenes.[4] Roses are insect-pollinated in nature. The aggregate fruit of the rose is a berry-like structure called a rose hip. Many of the domestic cultivars do not produce hips, as the flowers are so tightly petalled that they do not provide access for pollination. The hips of most species are red, but a few (e.g. Rosa pimpinellifolia) have dark purple to black hips. Each hip comprises an outer fleshy layer, the hypanthium, which contains 5–160 "seeds" (technically dry single-seeded fruits called achenes) embedded in a matrix of fine, but stiff, hairs. Rose hips of some species, especially the dog rose (Rosa canina) and rugosa rose (Rosa rugosa), are very rich in vitamin C, among the richest sources of any plant. The hips are eaten by fruit-eating birds such as thrushes and......

Words: 481 - Pages: 2

Premium Essay

Any Any Anay Any Any

...ABU DHABI COMMERCIAL BANK LIMITED Name Institution ABU DHABI COMMERCIAL BANK LIMITED Abu Dhabi commercial bank, simply known as ADCB is one of the largest banks in United Arab Emirates in terms of market capitalization and shareholder funds. The bank was established in 1985 through a merger of Emirates commercial bank, the federal commercial bank and the Khaleej commercial bank. The Abu Dhabi government owns sixty-five percent of the shares of the company through its investment arm, the Abu Dhabi Investment Authority (Bllomberg, 2011). The Abu Dhabi commercial bank is a public shareholding company under limited liability. The bank is listed in the Abu Dhabi stock exchange as a public joint stock company. The bank provides the following services; Islamic banking, merchant banking services, stock brokerage, commercial and investment banking, as well as fund management activities (Bloomberg, 2011). ADCB has 49 branches across United Arab Emirates and 2 branches in India. The bank operates through three divisions. They are business banking, personal banking and meetahq Islamic banking. The personal banking segment of the bank offers accounts credit and debit services, loans and wealth management services among other services. The business banking segment of the bank offers the following services, small and medium enterprises banking, corporate banking, investment banking and treasury banking. The meetahq-banking segment offers sharia law compliant......

Words: 2657 - Pages: 11

Premium Essay

Text, Film, and Historical Fact: Soucing “the Name of the Rose”

...Text, Film, and Historical Fact: Soucing “The Name of the Rose” 1. Evaluate the following statement: The film “The Name of the Rose” is an accurate portrayal of the lives of medieval monks. “The Name of The Rose” is a historical murder mystery combining fiction, biblical analysis, medieval studies and literary theory. The movie is very appropriate for historical class, because it simply describes the debate on the poverty of the clergy, but not converted beyond recognition. The scenes of the life in Abbey describe challenges and promises of monastic life. Such characters as dithering abbot and fat cellarer, quirky herbalist and dedicated illuminator demonstrate the variety of occupation and different personalities within the walls of the monastery. The scenes where after the second murder even the abbey became under the apprehension that they are experiencing the last days before the coming of Antichrist, is a perfect evidence that in the fourteen century many experienced divorce from the scholarly world turned to superstition, heretic movements, or apocalyptical outbursts. Moreover, the movie accurately described some parts of daily life medieval monks. The dining sessions, scenes of prayers, psalms and hymns were showed properly. Medieval monks devoted their lives to strict routine and discipline of life. For example, the part where elderly blind monk was angry at other monks because they were laughing claiming that monks never fool themselves. In the movie......

Words: 1086 - Pages: 5

Premium Essay

A Work Nite Different Than Any Other

...A Work Night Different Than Any Other I never thought this night would be different than any other night I’ve worked. I was a Personal Care Worker in Home Health Care. I had just finished giving one of my clients Mrs. Carol her nightly bath. About 30 minutes had pasted since she had lost her bowels on the living room floor. If the different smells of urine, feces, and vomit didn’t kill you; you would be able to handle anything this job threw your way. After settling her into bed, and giving her nightly meds, my shift was almost coming to a end. While watching the clock, and rushing to do my paper work, fingers turning white as snow in a winter’s storm. I charted today’s daily activities, meals, and the meds that was passed on my shift. This was my nightly robot routine; while prepping waters, and nightly meds for the third shift PCW. Dan the third shift’s PCW came in, greeting me with the half smile that I was greeted with every night. Really trying his best to be polite and smile, but in his on head saying he didn’t want to see me go. You could tell he really didn’t want to be here. So I hurried and gave him a quick briefing of the previous shifts activities for the four patients that lived there. My car had been down for a month now. So I had been working every double shift that was manageable to save up enough money to get my car out of the shop. But, I wasn’t picking up tonight. I was too tired. I had to leave in fifth-teen minutes flat if to catch the 67 bus.......

Words: 1243 - Pages: 5

Free Essay

Pete Rose

...1963 and 1990 loved him and wanted to be him. Charlie Hustle played the game the right way, the way that we teach our kids to play and with an intensity that was matched by no other player. He played hard every day and never tried to show off or to show up his competitors. If he was hit by a pitch or walked, he would simply drop his bat and run, not walk or jog, to first base. Most people don’t know who Charlie Hustle is they only know him by his given name, Pete Rose. They don’t remember all of the great things that he did on the baseball field they only know that he was arrested for tax evasion and that he is banned from baseball for gambling on it. Charlie Hustle holds more records in baseball than any other player in the history of the game. The one record that he is most notable for is one of baseball’s greatest records of all time. He holds the record for having the most career hits (4,256) of all time. Most experts would even go as far to say that this record will never be broken. Although he holds this record he will never be accepted into the Baseball Hall of Fame because while he was the manager of the Cincinnati Reds he was caught gambling on the Reds. You may say to yourself “what is the big deal about gambling, people do it all of the time.” Gambling on baseball while you have any dealings with the game is the biggest unspoken rule in the game. Pete Rose’s gambling problem is the reason for his down fall from greatness in baseball. While some......

Words: 576 - Pages: 3