2. The persistent economic downturn may remain extended for next 3 quarters. Conclusion & Recommendations The available data and analysis suggests that CCL hold more promise to invest and hence it is recommended that 100% of the amount to be invested into CCL. These recommendations are based upon the assumptions and facts that CCL has been able to reinitiate its quarterly dividends. Since dividends serve as the best signal to the market therefore firm paying the dividend may be preferred over the firm not paying the dividends. Cash flows of CCL are healthy and its ROE is also better than RCL thus making it a more desirable option for investment as compared to RCL. Cruise Industry & Economy Global economy is passing through recession with high levels of unemployment as well as fluctuating oil prices. Though the traditional market for the cruise industry i.e. North America is making an economic recovery however, conditions in Europe are relatively discouraging due to sovereign debt issues as well as low economic growth. Thus the strategy of developing long term sustainability of the industry may face setbacks as it may fail to find lucrative and profitable alternative destinations. (Ebersold) Source: http://www.freebalance.com/blog/?p=1889 Overall international political environment is relatively volatile too with potential threats of terrorism as well as pirates. There has been an increasing activity of pirates especially in Somalia region with the possibility that such activities may be started in other areas too. Since both the cruise liners i.e. CCL and RCL also operate in non-US areas also therefore the fluctuations in the foreign currency values can also adversely affect the revenue of both the cruise liners. There have been concerns over the environment protection and the potential role of cruisers in disturbing the eco system of the sea. It is also because of this reason that the overall regulatory environment for cruise liners may become tough. It is also because of this link between environment and cruise industry that it has been attracting negative publicity. Various environmentalist groups are advocating against the industry due to potential damage that could be done to environment. Industry Review Cruise Industry is relatively young and faced consolidation as a result of its inherent business dynamics. Started in 1970s’, this industry started to become dominating industry in 1980s with higher consumer discretionary spending being done in this industry.1 The relative level of luxury involved in this industry therefore give consumers an added level of motivation to spend and consume on the luxury cruises. It is also important to note that this industry is typically divided into three important segments of luxury, premium and contemporary. The overall dynamics of each category however are relatively different and cater to the different needs and requirements of the customers according to their budget and financial preferences. These different segments of the business therefore are targeted at different segments of the market and are priced differently to suit the needs of the consumers pertaining to each category. Over the period of last 40
Introduction This paper will discuss about the potential investment prospect in Carnival Cruise Lines (CCL) and Royal Caribbean (RCL)- two of the major players in the Cruise Industry. Industry is growing and is considered as stable despite the recession. Both these companies are considered as the significant and important players in the industry and with the investment fund of $100 m to be invested, this report will actually provide an analysis of how this investment fund can be split and invested in any or both of these firms…
The market needed to provide investors reliability and accountability. The two objectives of the Securities and Exchange Act of 1933 are: 1. Require that investors receive financial and other significant information concerning securities being offered for public sale; and 2.
True shareholder value is the most desired position of a firm’s equity and debt to the real replacement value of its assets. According to Copeland, et al (1990), “the most significant factor is that the rate of return on invested capital relative to the weighted average cost of capital and the amount the company invests in new capital at this rate to generate growth” (Armitage & Ha, 1995, p.2).
529 billion, in comparison to the residential property market which is about ? 3,805 billion. If we look back to scale the performance of the commercial property market, we will see it has generated considerable revenue in and before 2007. Most of the pension providers in UK invested at least 5-10 percent of their money in commercial properties.
Since the US GAAPs are also closely linked to IFRS, FASB wants to bring some change in those GAAPS. To move towards fair value accounting, it published a statement on which it defined fair value accounting and provided some guidelines regarding it it also issued a standard in 2007 giving companies an alternative to value assets and liabilities at fair value .
It is this factor that is referred to as the present value interest factor (PVIF). When discounted at a given discount rate (r) over a given number of periods (p) it is then denoted as PVIFr%np. np means 'no. of periods'.
2. 'Io' is the initial cash outlay.
The longer the term of the interest rates the higher the interest rates will be as in comparison to short term interest rates which are mostly lower than the long term interest rates.
Yield curve analysis is considered as one of the most valuable bond
But nevertheless the degree of this imperviousness is determined by a number of other factors that are inherent to the system itself (Saunders, 1999). Calculations involve the same process as above. CAPM is
by dividing dividend by value that it was bought and adding it to the difference between value that it was sold and value that it was bought and dividing it by the value that it was bought. When portfolio includes bond issues, realized return calculations need to focus on actual
Also, Jupiter Management’s income statements over the last three years show a worrying trend, that is a negative one. While there was a significant increase in net income from 1988 to 1989, 1990 figures show that the company’s growth has