StudentShare solutions
Triangle menu

Finance and Accounting - Research Paper Example

Not dowloaded yet

Extract of sample
Finance and Accounting

It is without doubt that table salt had developed into a well-rounded and mature enterprise but Sea Shore Salt had grown gradually over the years however, on the peril of its competitors that were not well known in the business. The company had developed a legacy with its brand name that was ideally known and recognized in the area giving the company a competitive advantage despite it being very difficult to pronounce the name quickly (Sages & Grable 57). Bernice reported to work on January 2, 2006 and everything was seen to be going smoothly until Mr. Brinepool sent her a memo on the company’s cost of capital, giving her the task of explain to all the other managers the company’s weighted average cost of capital. Bernice had not expected such a task so soon and hence, she stayed at the office late that night to prepare for any questions that may be shot at her during the meeting that was scheduled to be held the following day. Bernice at first analyzed and summarized the company’s recent balance sheet to and later on wrote down some points she had discovered: (Sages & Grable 58). The bank where the company had taken a loan charged an interest that was similar to the existing market rate bearing in mind that the long- term debt had previously been issued not so long ago. This meant that the book as well as the market values of the debt could not have a great difference in margin. The company had issued stock about 35 years ago at the time when the interest rates were significantly lower than they are now. The stock were expected to rise by a large margin over the years and eventually become very lucrative in future though this did not happen. The current stock which was initially preferred was now trading at only $70 per share contrary to what the management expected the share price to stand at by this time. Common stock was expected to trade at $40 per share by this time. Earnings for the subsequent year were projected to be at about $4 and the dividends shareholders were going to receive at the end of the fiscal year was probably expected to be around $2 per share. Sea Shore Salt had a tradition of using 50% of her earnings to pay dividends to its shareholders and the rest would be retained by the company for future expansion and growth. Fig 12. 2 Mr. Brinepool’s cost of capital memo Sea Shore Salt Company Spring Vacation Beach, Florida CONFIDENTIAL MEMORANDUM DATE: January 15, 2006 TO: S.S.S. Management FROM: Joe- Bob Brinepool, president SUBJECT: Cost of capital This memo gives and insight and understanding about the company’s long- term policy concerning rates to be considered in terms of making decisions involving capital investment. Recently, many people have started to raise questions and there has been an air of confusion with regards to this disturbing matter. Sea Shore Salt analyses investment by discounted a cash flow that is discounted. The problem in discount rate is the weighted average cost of capital experienced by the company after tax. The weighted average cost of capital is the combination of the amount of returns that investor expect a company to generate at the end of each fiscal year. These investors include persons or institutions such as banks, bond holders or even stock investors; this is on top of the already present stock owners. Sea Salt financings are summarized in the following table Amount (in millions) percent of total rate of return Bank loan 120 20% 8% Bond issue 80 13.3 ...Show more

Summary

Name Professor Course Date Finance and accounting Bernice Mountaindog was at happy to finally be back at the Sea Shore Salt. She found the employees were treated right. The top management had no quarrel with granting her request to go on leave so as to pursue a degree in finance…
Author : kaylah11
Finance and Accounting Research Paper essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the research paper on your topic
"Finance and Accounting Research Paper"
with a personal 20% discount.
Grab the best paper

Related Essays

Finance and Accounting Research Paper: The International Financial Reporting Standards
The International Financial Reporting Standards (IFRS) are a set of guidelines that are sued to guide accountants and financial professionals in preparation and reporting financial information. This paper will discuss the IFRS in terms of its basic information; by discussing its foundation, and how it was formed.
10 pages (2500 words) Research Paper
Finance and Accounting Research Paper: Corporate Financial Scandals
The company was formed in 1985 by Kenneth Lay, after the merger of Houston natural gas and inter-north. It was a natural gas, energy trading, and electrical utilities company which was based in Houston Texas. Before its bankruptcy, Enron employed roughly 21,000 people.
11 pages (2750 words) Research Paper
Finance and Accounting Research Paper: Monetry - Central Bank
Central bank enjoys the monopoly as compared to commercial bank; in printing the national currency which usually serves as the nation’s ledger tender (Padoa-Schioppa, 2002). During financial crisis of the banking sector the central bank plays a more active role in controlling the interest rates, and acting as a lender of last resort, other than its prime role of providing the nation’s supply of money.
23 pages (5750 words) Research Paper
Finance and Accounting Research Paper: Continuous Auditing
Systems find applications here significantly because they assist in testing controls, reviewing trends and analyzing patterns within digits of critical numeric fields. The automated tools utilized in this important exercise also help in the assurance provision on data related to finance, strategic management, organizational operations and compliance.
15 pages (3750 words) Research Paper
Throughput Accounting Research Paper
.......................................1 Steps involved in throughput accounting…………………………………………2 Limitations of Throughput Accounting…………………………………………..5 Analysis…………………………………………………………………………..6 Summary………………………………………………………………………….7 References………………………………………………………………………..8 Introduction Management Accounting has incorporated a number of cost accounting techniques.
7 pages (1750 words) Research Paper
Research Paper on San Diego County CAFR
The city, with roughly 10,050 employees in 2011, offers variety of governmental services including sanitation and health services, recreational activities and cultural events, police and fire protection, the construction and safeguarding of infrastructure and streets, and the maintenance and function of the water and sewer utilities.
10 pages (2500 words) Research Paper
Business Finance Research Paper
Most annual reports can be broken down into three sections: the Executive Letter, the business Review, and the Financial Review. The Executive Letter gives a broad overview of the company's business and financial performance. The Business Review summarizes recent developments, trends, and objectives of the company.
6 pages (1500 words) Research Paper
Research Paper, Finance and Accounting
Accounting degree is a rewarding degree for individuals as it opens up range of career options to students. The demands for accountants are growing and it is exceeding the supply. The Job opportunities in today’s business climate are far better than ever for accountants.
6 pages (1500 words) Research Paper
Accounting research paper
During those times, the scribes were the bookkeepers as they had writing knowledge. Historians believe that many of the records on stones and clay tablets
6 pages (1500 words) Research Paper
Research Paper (Accounting Research paper)
In early 2011, Al and Irene approached Tim concerning the piece of land (Moore farm) that was bought some time back at $600000. Tim was unaware that the land was located in a geological flaw. Due to the knowledge, skills and expertise of Irene, who is an architect and Al
1 pages (250 words) Research Paper
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation