Fin 571 Week 5 Problem Set Essays

Fin 571 Week 5 Problem Set Essays Fin 571 Week 5 Problem Set Essay Fin 571 Week 5 Problem Set Essay Chap 17, Prob B1 A. Bixton’s objective is to achieve a credit standing that falls, in the words of the chief financial officer, â€Å"comfortably within the ‘A’ range. † What target range would you recommend for each of the three credit measures? To remain within the A range the following is recommended Fixed Charge Coverage 3. 00–4. 30 Funds From Operations/Total Debt 45%–65% Long-Term Debt/Capitalization 22%-32% So to be comfortably within the range A the company should try to maintain higher fixed coverage ratio (near to 4. ), higher Fund from operation/total debt ratio (near to 65%) and maintain a lower long-term debt to capitalization ratio (near to 22%). B. Before settling on these target ranges, what other factors should Bixton’s chief financial officer consider? Bixton CFO should take following into consideration Company ability to fully use non-interest tax credits (foreign tax credits) Issuance cost r elated to Debt and future fixed expense in form of interest payment irrespective of the level of income Company ability to raise debt from the market. Effect on Brand image or goodwill of the company on raising debt C. Before deciding whether the target ranges are really appropriate for Bixton in its current financial situation, what key issues specific to Bixton must the chief financial officer resolve? Before deciding whether the target ranges are really appropriate for Bixton in its current financial situation the CFO of Bixton Corporation should consider the existing amount of RD expenditure and foreign Tax credit. It is possible company may not be able to fully utilize the additional tax saving generated by taking additional debt when RD expenditure and foreign tax credit is taken into consideration. Chap 18, Prob A10 D1 = ADJ [POR(EPS1) – D0] + D0 D1 = 0. 75 [0. 25 x $8. 00 $1. 00] + $1. 00 = $1. 75 D2 = 0. 75 [0. 25 x $8. 00 $1. 75] + $1. 75 = $1. 94 D3 = 0. 75 [0. 25 x $8. 00 $1. 94] + $1. 94 = $1. 985 D4 = 0. 75 [0. 25 x $8. 00 $1. 98] + $1. 98 = $2. 00 D5 = 0. 75 [0. 25 x $8. 00 $2. 00] + $2. 00 = $2. 00 Chap 18, Prob B2 . Over the five-year period, what is the maximum overall payout ratio the firm could achieve without triggering a securities issue? Total discretionary cash flow = $50 + $70 + $60 + $20 + $15 = $215 Total earnings = $100 + $125 + $150 + $120 + $140 = $635 Maximum Payout Ratio = $215 / $635 = 33. 86% b. Recommend a reasonable dividend policy for paying out discretionary cash flow in years 1 through 5. Current dividend = $1. 50 x 20 million shares = $30 million The firm could increase the dividend from $30 million to $50 million. : D1 = $35 / 20 = $1. 75 D2 = $39 / 20 = $1. 95 D3 = $43 / 20 = $2. 15 D4 = $48 / 20 = $2. 40 D5 = $50 / 20 = $2. 50 $35 + $39 + $43 + $48 + $50 = $215, is the total discretionary cash flow and not a discretionary cash deficit. Chap 20 problem A1. 1. Interest Coverage Ratio = EBIT / Interest Expense = $70 million / $14 million = 5 5 4, Dallas Instruments is in compliance. 2. Tangible Assets / Long-Term Debt = $400 million / $175 million = 2. 29 2. 29 1. 5, Dallas Instruments is in compliance. 3. Cumulative Dividends and Share Repurchases = $40 million + $40 million = $80 million $80 million $200 million x 60%, Dallas Instruments is in compliance. Dallas Instruments meets all of the covenants and is therefore in compliance. Chap 21 Prob. A2. a. After-tax cost of secured debt = (1 0. 34) x 12% = 7. 92% NAL = $1,000 $300 / 1. 0792^1 $275 / 1. 0792^2 $250 / 1. 0792^3 $225 / 1. 0792^4 $200 / 1. 0792^5 NAL = $1,000 $277. 98 $236. 12 $198. 90 $165. 87 $136. 62 = -$15. 49 b. Allied Metals should borrow and buy.

5 Keys to Creating a Social Media Strategy for Your Book

5 Keys to Creating a Social Media Strategy for Your Book Five Keys to Developing a Solid Social Media Strategy Andrea Dunlop is a Reedsy social media and marketing consultant with over ten years in the publishing business and the author of the novel Losing the Light. In this post, she reveals what it takes to create a great social media strategy and begin to use social media like a pro.When I see authors using social media- whether I’m on the clock with a client or just perusing- I often see them using social media in a very ad hoc way. This leads to the ever-popular refrain â€Å"social media doesn’t sell books†- which it doesn’t unless you use it correctly. As an author, your aim on social media is to interact with influencers and to expand your reach to as many potential readers as possible.Here are five keys to building your social media strategy so that you can make the best of the time and energy you spend marketing your work:1. Know Your Audience I always encourage authors not to get too caught up in the numbers on social media. Much of the magic comes from the serendipity of being able to connect with people you wouldn’t otherwise meet or connect. That said, there’s no point in spending a lot of time and energy (and possibly money) on something if you’re not going to measure the results.I have a social media dashboard where I track everything from Twitter followers to Amazon rank on a weekly basis. The point of this is not to obsess over the data but to recognize what’s working and what isn’t so that I can feel free to abandon the ineffective strategies and double down on what worked best.For more tips on using social media as an author, check out this charming infographic!Is there a social media strategy or platform that has worked wonders for your books? We'd love to hear your thoughts and questions in the comments below.