By April 2009, Henri Termeer had been the Chairman and CEO of Genzyme for more than 20 years. Under his watch, Genzyme had grown to be one of the top-five U.S biotechnology firms. It first established its footprint in the treatment of rare genetic disorders, but its subsequent growth was the result of acquiring nascent biotechnology companies. Genzyme reached record revenues of $4.6 billion in 2008 and was expected to generate an increasing level of free cash flow in coming years. However operational problems in one manufacturing plant had led to a warning letter in late February 2009 from the U.S. Food and Drug Administration (FDA), which, combined with news on impending health care reform, had pushed Genzyme’s stock price from a high of $70.42 down to a low of $56.38.

Genzyme was being targeted by Relational Investors (RI), an “activist” investment fund that had a 2.6% stake in the company at the end of March 2009. RI had a history of engagements with the boards of numerous companies that, in several instances, resulted in the CEO’s forced resignation. Ralph Whitworth, RI cofounder and principal, met with Termeer and delivered a presentation, arguing that Genzyme was trading at a discount. He offered recommendations on how Genzyme could address this: (1) improve capital allocation decisions; (2) implement a share-buyback or dividend program; (3) improve board composition by adding more members with financial expertise; and (4) focus executive compensation on performance metrics.

(i) Why is Mr. Whitworth arguing that Genzyme needs to implement a share repurchase program?

(ii) What problem would a share repurchase solve?

(iii) Wouldn’t it be easier for Genzyme to simply announce a dividend to achieve the same objective of returning cash flow to the shareholders?

Bob has completed another year here at XYZ as a plant distribution employee. Bob's primary responsibilities include, ensuring that each outgoing shipment is complete, all items are free of defects, and there are no discrepancies in inventory. Within the past few months, there have been multiple customer complains about their shipments. In two cases, nearly every item in a shipment contained a defect. Upon further investigation, we discovered that all of the orders in question fall under Bob's responsibility.

   Having defects in our shipments are not only going to hurt our sales, but also our reputation here at XYZ. It is of the utmost importance that Bob is able acknowledge these mistakes and implement a change to avoid defective shipments in the future. I believe that Bob should follow along with a shipment checklist that has detailed explanations, as well as visuals, of the proper methods we have established. I will use the verbal delivery method to get my points across to Bob effectively.

   Prior to my sit-down review with Bob, I am going to write up a step by step process, with visuals, to present to Bob and request that he start using this method. I will discuss with Bob the issues that have been arising and make sure he is aware of the changes that need to be made. Within each shipment, the items need to be checked and the exact status of each item will need to be written down prior to leaving the warehouse. This is going to be a first step, and Bob and I will have a follow up, non-professional, review in a month to check up on the status of his shipments and make sure that changes are actually being made.

   It is important to address Bob verbally and not with a written delivery for multiple reasons. First, Bob can observe nonverbal cues that I am giving him with my presentation of the checklist. I can also easily demonstrate my intentions right away. Clarification and explanation can help Bob to remit his old habits. Lastly, Bob can have a chance to respond to the concerns immediately and have an open discussion about his job. Although people do not like to get bad news, they expect the truth" (Cardon 2016) I backup this statement because if we are not honest with Bob he will never truly learn and therefore he won't be able to change his actions.

Required

Describe how the changes proposed in the above post could be implemented on a larger, department-wide scale to ensure all employees are informed and the issues can be avoided. Would the same change management principles work when applied to the organization, or would changes have to be made?

Consider the following financial data for J. White Industries:

Total assets turnover: 1.8
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 29%
Total liabilities-to-assets ratio: 45%
Quick ratio: 1.05
Days sales outstanding (based on 365-day year): 33 days
Inventory turnover ratio: 5.0

The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

Open spreadsheet

Complete the balance sheet and sales information in the table that follows for J. White Industries. Do not round intermediate calculations. Round your answers to the nearest whole dollar.

Balance Sheet

Check My Work

Reset Problem

Ms. Frank is planning for a 25-year retirement period and wishes to withdraw a portion of her savings at the end of each year. She plans to withdraw $10,000 at the end of the first year, and then to increase the amount of the withdrawl by $1000 each year, to offset inflation. How much money should she have in her saving account at the start of the retirement period if the bank pays (a) 9%, (b) 7.5% per year compounded annually?

PLEASE ANSWER IN EXCEL OR GIVE A FORMULA PLEASE

1. Explain why some financial institutions prefer to provide credit in financial markets outside their own country.

2. Explain why a public forecast by a respected economist about future interest rates could affect the value of the dollar today. Why do some forecasts by well‑respected economists have no impact on today’s value of the dollar?

3. Why is trade deficit announcement sometimes has such an impact on foreign exchange trading?

External Equity Financing

Gardial GreenLights, a manufacturer of energy-efficient lighting solutions, has had such success with its new products that it is planning to substantially expand its manufacturing capacity with a $20 million investment in new machinery. Gardial plans to maintain its current 35% debt-to-total-assets ratio for its capital structure and to maintain its dividend policy in which at the end of each year it distributes 60% of the year's net income. This year's net income was $8 million. How much external equity must Gardial seek now to expand as planned? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.

$ million

Greenpoint Corporation is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 25 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Suppose the appropriate discount rate is 12 percent. Determine the net working capital spending for Year 4 then calculate the NPV of the project. What is the project NPV?

magine your department is responsible for evaluating potential capital investment projects and you must establish the method and criteria by which projects will be selected. Further assume that your boss thinks NPV analysis is too complicated for most lower management decisions and has directed you to use a method other than NPV. Select one of the other evaluation techniques (Investment Rules) and discuss its merits. In your discussion, address how you might minimize any of the "drawbacks" of your selected method.

1. DSO

Greene Sisters has a DSO of 18 days. The company's average daily sales are $10,000. What is the level of its accounts receivable? Assume there are 365 days in a year.

$ ________

2. Debt Ratio

Vigo Vacations has $196 million in total assets, $5.3 million in notes payable, and $25.0 million in long-term debt. What is the debt ratio? Round your answer to two decimal places.

  ____________%

3. Market/Book Ratio

Winston Washers' stock price is $85 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 450 million shares of common stock outstanding. What is Winston's market/book ratio? Round your answer to two decimal places. Do not round intermediate calculations.

_________

4.  Price/Earnings Ratio

Reno Revolvers has an EPS of $1.80, a cash flow per share of $4.85, and a price/cash flow ratio of 10.0. What is its P/E ratio? Round your answer to two decimal places.

________

5.  ROE

Needham Pharmaceuticals has a profit margin of 4.5% and an equity multiplier of 1.5. Its sales are $110 million and it has total assets of $40 million. What is its Return on Equity (ROE)? Round your answer to two decimal places.

_________%

6. DuPont Analysis

Gardial & Son has an ROA of 9%, a 2% profit margin, and a return on equity equal to 12%.

a.) What is the company's total assets turnover? Round your answer to two decimal places.

b.) What is the firm's equity multiplier? Round your answer to two decimal places.

Acme Corp has a target debt/equity ratio of 0.35. It was $350 million in bonds outstanding with a yield of 7% and 50 million shares of stock outstanding with a current market price of $20 per share. The company’s beta is 1.32 and the risk-free rate of interest is 4% with a market risk premium of 6%. The firm has a tax rate of 25%. The company is looking to raise $250 million to build a second factory. The new factory will increase output substantially. The table below shows the anticipated cash flows generated from the new factory including a salvage value in year 5. What is the IRR of this project?

Group of answer choices

13.47%

14.21%

15.58%

12.26%

A bond trader purchased each of the following bonds at a yield to maturity of 9%. Immediately after she purchased the bonds, interest rates fell to 5%.

What is the percentage change in the price of each bond after the decline in interest rates? Assume annual coupons and annual compounding. Fill in the following table. Do not round intermediate calculations. Round your answers to two decimal places.

The table contains the Sales estimates for the next year. The Purchases are 64% of Sales. Purchases are paid in the following month. The administrative expenses of $10,196 are paid each month Tax expenses of $39,003 are paid in March, June, September, and December each year. Rent expenses of $79,725 are paid in June and December. What is the cash outflow for March?

Jan- 59,595 Feb- 60,120 Mar- 20,032 Apr-68,137 May- 59,595 Jun- 60,120 Jul- 68,137 Aug-20,032 Sep-59,595 Oct-20,032 Nov-60,120 Dec-68,137     

You estimated a regression model using annual returns of ExxonMobil (as a dependent variable) and of the market (as an independent variable). The R-squared of this regression is 0.2, and the total standard deviation of ExxonMobil's returns in the estimation window is 25%. In this case, the standard deviation of the unsystematic (or idiosyncratic) component of ExxonMobil's returns is:

A 5-year Treasury bond has a 4.7% yield. A 10-year Treasury bond yields 6.15%, and a 10-year corporate bond yields 8.05%. The market expects that inflation will average 2.25% over the next 10 years (IP₁₀ = 2.25%). Assume that there is no maturity risk premium (MRP = 0) and that the annual real risk-free rate, r*, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP = LP = 0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described.

What is the yield on this 5-year corporate bond? Round your answer to two decimal places.

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