Describe the types of resources (assets) needed for a new

Describe the types of resources (assets) needed for a new product venture during its development and startup stages. Comment on the likely revenues and expenses during these early life cycle stages.
Please find the…

tached file.

Briefly discuss the likely importance of an entrepreneur s chara

Briefly discuss the likely importance of an entrepreneur’s character and reputation in the success of a venture. What role does social responsibility play in the operation of an entrepreneurial venture?
A survey of successful entrepreneurs conducted by Timmons and Stevenson showed that a majority felt that possessing ethical standards is the most significant factor in the long-term success of their ventures. Investing time and money in venture’s character will ensure that it is an asset rather than liability. Most of the entrepreneurial ventures give high social benefit by introducing new products and services

The stock price of Retro Co. is $65. Investors required

The stock price of Retro Co. is $65. Investors required a 12 percent rate of return on similar stocks. If the company plans to pay dividend of $3.80 next year, what growth rate is expected for the companys stock price?

Stone Sour Corporation is expected to pay the following dividend

Stone Sour Corporation is expected to pay the following dividends over the next four years; $8, $13, $15, and $2.50. afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends, forever. If the required return on the stock is 11 percent, what is the current share price?
Concept: Dividend Discount Model is used to evaluate the price of share or value of stock. It uses discounted dividends to find the present value of stock. Value of stock can be calculated as: Value of Stock = Dividend 1/(1+Discount Rate) +Dividend 2/(1+Discount Rate)^2 + …. +Dividend n/(1+Discount Rate)^n Where n -> Number of Periods (in Year) According Gordon Growth Model, Present value of stock = Dividend Paid*(1+g)/(r-g) (For Perpetuity) Where, r -> Required Rate on Return D -> Dividend Paid g -> Growth Rate of Dividends Solution: Stone Sour Corporation: Required rate of return = 11% Dividend Paid at the end of year 1 = $8 Dividend Paid…

t the end of year 2 = $13 Dividend Paid at the end of year 3 = $15 Dividend Paid at the end of year 4 = $2.50 For Dividend Perpetuity: Dividend Paid = $2.50 Growth Rate = 5% So Present Value of Dividend Perpetuity (At the Beginning of Year 5) = $2.50*(1+5%)/(11%-5%) = $43.75 Current Value of Stock = $8/(1+11%) + $13/(1+11%)^2 + $15/(1+11%)^3 + $2.50/(1+11%)^4 + $43.75/(1+11%)^4 = $59.19 per share Therefore, current share price is $59.19 .

E-Eyes.com has a new issue of preferred stock it calls

E Eyes.com has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a 10.50 percent return on this stock, how much should you pay today? Round to 2 decimals.
Solution: The company (E-Eyes.com) will pay a dividend of $20 per year from 20 years from todays times, Therefore, the price of the stock at todays time will be=> Dividend/ (1+ cost of equity) ^no. of years Dividend per share (D1) = $20 (20 years from todays times) Cost of Equity= 8% (return of the stock) No. of Years= 20…

ice of the stock= 20/ (1.08) ^20 Price of the stock = $4.291 The Price of the stock is hence $4.291 Therefore the company (E-Eyes.com) value of the stock at todays times is $4.291 and the shareholders buying it must pay $4.291.

What factors affect a firms degree of translation exposure? Exp

What factors affect a firms degree of translation exposure? Explain how each factor influences translation exposure.
Solution: translation exposure TheTranslation exposure equals the difference between exposed assets and exposed liabilities. A foreign currency asset or liability is exposed if it must be translated at the current exchange rate. Transaction exposure equals the net amount of foreign- currency denominated transactions already entered into. Upon settlement, these transactions may give rise to currency gains or losses The basic translation methods are the current/noncurrent method, monetary/nonmonetary method, temporal method, and current-rate method. The current/noncurrent method treats only current assets and liabilities as being exposed. The monetary/nonmonetary method treats only monetary assets and liabilities as being exposed. The temporal method translates assets and liabilities valued at current cost as exposed and historical cost assets and liabilities as unexposed. The current rate method treats all assets and liabilities as exposed factors affect a firms degree of translation exposure . The factors affecting a company’s translation exposure under FASB-52 include the currency of the primary economic environment in which the company (or its affiliate) does business, the currency in which it invoices its sales, the currency in which it negotiates to buy, the currency denomination of its…

orrowings, the currency denomination of the securities in which it invests surplus cash, and the location of its customers. This list suggests the actions that a company can take to affect its degree of translation exposure: borrow, invest, and invoice both sales and purchases in the local currency. It also has some degree of control over which customers to serve–foreign or domestic–but this decision should be based on economic profitability rather than its impact on translation exposure. factor influences translation exposure The greater the percentage of business conducted by subsidiaries, the greater is the translation exposure. The greater the variability of each relevant foreign currency relative to the headquarters home (reporting) currency, the greater is the translation exposure. The type of accounting method employed can also affect translation exposure

Toward the end of 1999 the central bank (Reserve Bank)

Toward the end of 1999, the central bank (Reserve Bank) in Zimbabwe stabilized the Zimbabwe dollar, the Zim for short, at Z$38/USD and privately instructed the banks to maintain that rate. In response, at the end of 1999, an illegal market developed wherein the Zim traded at Z$44/USD. Are you surprised at rumors that claim corporations in Zimbabwe were ?ohoarding?? USD200 million? Explain.
I am not surprised with this kind of rumors that claims corporation with hording of USD 200 million, because several countries had pegged their currencies against to the US dollar in 1997 crisis. It had reduced the rate of local currencies and the corporations were expecting that the rate would grow very soon. With this assumption, the corporations were expecting a growth in the currency rate against the dollar. But, after…

his crisis, it could be seen that there were reverse of their expectations and most of corporations in Zimbabwe get lost, when the rate had been floated. It is also true situation in Zimbabwe that black market had been taken to response to the price control and unstable local currency.

Memphis Co. hires you as a consultant to assess its

Memphis Co. hires you as a consultant to assess its degree of economic exposure to exchange rate fluctuations. How would you handle this task? Be specific.
ANSWER:Regression analysis can be used to determine the relationship betweenthe firms value and exchange rate fluctuations. Stock returns can be used as aproxy for the change in the firms value. The time period can be segmented into twosubperiods so that regression analysis can be run for each subperiod. The sign and magnitude of the regression coefficient…

will imply how the firms value is influencedby each currency. Also, the coefficients can be compared among subperiods foreach currency to determine how the impact of a currency is changing over time. Thisconcept is discussed in the appendix.