Emerson Electrical Engineering Inc. is issuing new 20-year bonds that have warrants attached. If not for the attached warrants, the bond would carry an 11% interest rate. However, with the warrants attached the bonds will pay a 9% annual coupon. There are 25 warrants attached to each bond, which have a par value of $1000. The exercise price of the warrants is $25 and the expected stock price 10years from now (when the warrants may be exercised) is $50.77.
a) What is the investor's expected overall pre-tax rate of return for this bond-with-warrants issue?
b) The CEO of Emerson is wondering the possibility of replacing the bonds with warrants by convertible bonds. As the CFO for the company, please state your suggestions and explain.
In: Finance
"The rules of engagement for running a company that is people-based like Starbucks, and so many other companies: you just can not [sic] continue to leave your people behind and only focus on shareholder value," CEO Howard Schultz told CNN's Poppy Harlow (Wallace, 2014).
In: Operations Management
At 1 July 2019, the balance in the Retained Earnings account of
Melbourne Ltd was $3 500 000. The company’s share capital at the 1
July 2019 comprises 400 000 6% preference shares issued for $2.00
per share and 1 400 000 ordinary shares fully paid at $1 per
share.
During the year ended 30 June 2020, the following events
occurred:
1. On 1 February 2020, the directors declared and paid an interim
ordinary dividend of $124 000 from retained earnings.
2. On 14 March 2020, the directors issued 20 000 ordinary bonus
shares fully paid at $1.40 per share from retained earnings.
3. Profit for the year was $3 300 000.
4. On 30 June 2020, the directors declared a final ordinary
dividend of $480 000. A dividend was also declared on the
preference shares.
5. On 30 June 2020, the directors resolved to transfer $1 200 000
to a general reserve from retained earnings, and to transfer $2 000
000 from a previously created plant maintenance reserve back to
retained earnings.
Required:
Prepare the journal entries for Twister Ltd for the years ending 30 June 2019 and 2020.
In: Accounting
A single mother who suffered from depression was
transferred to an office assistant position at a university. The
transfer entailed a six-month probationary period. A professor at
the university was her supervisor. During the probationary period,
the professor sometimes leered at the woman, made sexual comments,
and showed her a pornographic Web site. When the woman told the
professor that she was not interested, he eventually ceased the
activity. The professor also criticized her work and threatened to
extend her probationary period. Two months after her probationary
period had ended, the woman received a performance appraisal that
she viewed as being unjustifiably negative. She believed that the
criticism of her work was related to her failure to respond
positively to the professor’s sexual overtures and that the way to
avoid criticism and keep her job was to go along with him. Shortly
thereafter, the professor requested sex from the woman and she
complied. The two had sex in the workplace on numerous occasions
over the next year. After unsuccessfully attempting to transfer to
another position, the woman filed a harassment charge. The
university immediately initiated an investigation and placed the
woman on paid administrative leave to separate her from the
professor. The investigators initially found insufficient evidence
of harassment but recommended that the woman be transferred to a
different position with a female faculty member as her supervisor.
Later, when the woman provided certain physical evidence that she
had been withholding, university officials confronted the professor
and he resigned.
1. What should the court decide?
2. Why?
In: Operations Management
King Companies, Inc (KCI) is a private company that owns five auto parts stores in urban Los Angeles, California. King Companies has gone from two auto parts stores to five stores in the last three years, and it plans continued growth. Eric and Patricia King own the majority of the shares in KCI. Eric is the chairman of the board of directors of KCI and CEO, and Patricia is a director as well as the CFO. Shares not owned by Eric and Patricia are owned by friends and family who helped the Kings get started. Eric started the company with one store after working in an auto parts store. To date, he has funded growth from an inheritance and investments from a few friends. Eric and Patricia are thinking about expanding by opening three to five additional stores in the next few years.
In October 2021, Eric approached your accounting firm, Thornson & Danforth, LLP, to conduct an annual audit of KCI for the year ended December 31, 2022. KCI has not been audited before, but this year the audit has been requested by the company's bank because of anticipated bank loans and by a new private equity investor that has just acquired a 20% share of KCI.
KCI employs 20 full-time staff. These workers are employed in store management, sales, parts delivery, and accounting. About 40% of KCI's business is retail walk-in business, and the other 60% is regular customers where KCI delivers parts to their locations and bills these customers on account. During peak periods, KCI also uses part-time workers.
Eric is focused on growing revenues. Patricia trusts the company's employees to work hard for the company, and she feels they should be rewarded well. The accounting staff, in particular, is very loyal to the company. Eric tells you that accounting staff enjoy their jobs so much they have never taken any annual vacations and hardly any workers ever take sick leave.
There are two people currently employed as accounting staff, the most senior of whom is Jonathan Jung. Jonathan heads the accounting department and reports directly to Patricia. He is in his late fifties and hopes to retire in two or three years and move away from Los Angeles. Jonathan keeps a close watch on accounting and does many activities himself including opening mail, cash receipts and vendor payments, depositing funds received, performing reconciliations, posting journals, and performing the payroll function. His second employee, Abby Owens, is a recent college graduate who just passed the CPA exam. Abby is responsible for the payroll functions and posting all journal entries into the accounting system. Jonathan and Abby often help each other out in busy periods.
Evaluation: Based on what you know about the accounting system, what recommendations would you offer in terms of control activities?
In: Accounting
SQL Trigger problem
When attemptiing to Create or Replace a trigger I get the error "sql warning trigger created with compilation errors".
Trigger:
CREATE OR REPLACE TRIGGER Late_Fees
after UPDATE
ON InventoryItem
FOR EACH ROW
DECLARE
late_fee number;
num_days number;
BEGIN
num_days:= to_date(:old.ReturnDate)-TO_DATE(:old.DateDue);
select IntValue into late_fee from ApplicationSettings where
Setting='Daily Late Fee';
:new.fee := (late_fee)*(num_days);
END;
/
commit;
Table:
create table Rental(
INVID int Primary key,
LoanDate date,
PatronID int,
DueDate date,
ReturnDate date,
constraint PatronID_FK Foreign key (PatronID) references
Patrons(PatronID));
Test Input:
insert into rental
values ('1345', '2020-02-20', '000', '2020-02-27',
'2020-02-22');
insert into rental
values ('1345', '2020-04-10', '000', '2020-04-17',
'2020-04-17');
insert into rental
values ('1234', '2020-02-20', '000', '2020-02-27',
'2020-02-22');
insert into rental
values ('1245', '2020-02-20', '000', '2020-02-27',
'2020-02-22');
insert into rental
values ('1345', '2020-08-14', '0001', '2020-08-21',
'2020-08-20');
insert into rental
values ('1265', '2020-09-01', '0001', '2020-09-08',
'2020-09-10');
In: Computer Science
We are considering hiring a catering company. Currently, we are preparing meals for employees. The following is the cost of preparing a meal: Food $3.00 Labor 2.00 Fixed overhead 1.00 Total $6.00 The caterer has quoted a price of $5.50 per meal. Please help us to determine whether we should buy meals from this catering company.
Company A can order meals for its employees from a catering company or prepare meals on-site. Use the information in the exhibit to complete the following items.
|
Question |
Answer |
| 1. Which option is less expensive? | Buy |
| 2. What other factors could affect decision-making? | All of the above factors |
| 3. Assume in addition that the rent of a kitchen for preparing meals is $200 per day, one meal is served to each employee per day, and the company has 100 employees. What is the maximum price the company should pay for a catered meal? |
In: Accounting
Thorp Inc. maintains a defined benefit pension plan for its employees. Pension plan balances as at January 1, 2020 include: Projected Benefit Obligation (PBO), January 1, 2020 $ 600,000 Plan assets at market-related value, January 1, 2020 $ 550,000 Prior service cost (PSC- OCI)1 $ 150,000 Average remaining service period 15 years Service cost $ 90,000 Expected returns on plan assets 8% Actual returns earned on plan assets $40,000 Actuarial interest rate 4% Contributions paid $ 150,000 Benefits to retirees in 2020 $ 100,000 Loss from change in actuarial assumption, December 31, 2020 $ 46,000 1 These prior service costs are from 2019 and already included in PBO on January 1,2020. Required: a. Determine the pension expenses recognized in 2020. b. Prepare the journal entries to reflect the accounting for the pension plan for 2020. c. Prepare the ending balances (31 December 2020) for plan assets, PBO, and calculate net pension liability. d. What will be the expected impact of the current pandemic (Covid-19) on PBO?
In: Accounting
Typifying Tanzania’s Upward Trajectory
A company that incites financial innovation and socioeconomic development, Barclays Bank Tanzania is gearing up for a new, exciting chapter in its already illustrious history.
The 1990s will go down as a crucial decade in Tanzania history.
A 10-year period characterized by political, social and economic transformation, it witnessed the country’s first successful multi-party election in 1995 and the signing of the progressive East African Community Treaty in 1999 – a cooperative commercial and political agreement between Tanzania, Kenya, and Uganda. The Tanzanian banking sector also embarked on a plan for financial liberalization at this time, part of a country-wide effort to sustain positive economic growth. Through the mobilization of financial resources and bolstered competition this was achieved facilitating greater freedoms amongst domestic banks and welcoming international players that helped to improve the availability of financial services and the quality of existing services. One such enterprise that has risen to the fore as a result is Barclays Bank Tanzania – a firm that has thrived since establishing a national footprint at the turn of the millennium. “The banking industry continues to undergo significant transformation in Tanzania and across the region, driven to a large extent by changing customer demographics, technological advancements and innovation,” explains Abdi Mohamed, the organisation’s Chief Executive Officer. “It’s critical to the growth of the economy, playing a pivotal role in supporting the government’s growth agenda.” A fully-fledged commercial bank serving the retail, business and corporate segments, Barclays has become a spearhead of the progressions that Mohamed refers to. Offering a full suite of deposit and lending products targeted to all key sectors of the economy, the business is well represented across the country with a network of 15 branches and an ATM network of 62. “We’re proud of our relentless focus on customers, competitive products, digital channels and our talented and diverse workforce,” Mohamed adds.
Employee power
The latter of these core focus areas has proven to be crucial to the success of Barclays Tanzania. The company pays particular attention to its employment, training and talent retention strategies, evidenced by its emphasis on providing young people with opportunities. “Young people bring special qualities that enhance diversity in the workplace,” explains Mohamed. They’re often brave, passionate and ready to take on new challenges and inject new ideas – qualities which are critical in finding solutions to today’s problems. “They tend to learn more quickly and have the ability to adapt to change. It is this knack for self-learning and adaptability that we look to explore with the vision of developing great leaders of tomorrow.” These attitudes bode well with its citizenship agenda that again seeks to develop local talent. The company ensures it provides an abundance of opportunities to its workforce, recognising the importance of keeping its skilled staff energised and happy. To this end, the firm has developed a three-stage strategy of hiring, developing and holding onto its best workers. “This people-centric plan includes a multitude of elements,” Mohamed explains. “We pay for performance and provide long term incentives for select organisational leaders over a three-year period, owed to the belief that exceptional staff contribute significantly to our business outcomes. We also consistently benchmark our offerings against the rest of the market, uphold employee engagement to the highest of standards and promote diversity wherever possible.”
Admirable social commitments
The mention of diversity leads the CEO to highlight the firm’s empowerment ethos, the company having developed tailored programmes that support up and coming female leaders and running training partnerships with external entities such as Duke University and the International Institute for Management Development. This responsible, progressive, conscious approach to development does not only apply internally, however. Equally, Barclays Tanzania is positioned as an active force for good, viewing citizenship as a fundamental part of its overall strategy. “We’re all about bringing possibilities to life as we support initiatives that help upskill, empower people and play a part in changing, developing and solving communities’ challenges,” Mohamed explains. These efforts fall under a series of distinct citizenship pillars, the first being enterprise development. The CEO reveals: “We have empowered 810 youth living with and affected by HIV/AIDS by upskilling and training them on entrepreneurship skills. Further, more than 600 young people have benefitted from entrepreneurial skills projects via our incubation and acceleration initiatives.” The company’s education efforts are similarly extensive, having sponsored 25 students for their undergraduate studies at the University of Dar es Salaam and Tanzania Institute of Accountancy. “400 graduates have also been trained on work skills under our placement programmes, and we’ve helped to empower more than 5,000 young people through our ReadytoWork programme,” Mohamed adds. In total, Barclays Tanzania has invested more than a billion Tanzanian shillings ($440,000) in social upliftment efforts over the past four years, be it on donations, education skills, natural disasters, enterprise development and/or financial skills. Additionally, 95 percent of its staff have taken time to share their skills and support communities, particularly hospitals, orphans and other disadvantage children. “We take these commitments very seriously, ensuring that we make a difference in people’s lives,” the Chief Executive reiterates.
A brighter future
Corporate social responsibility aside, the company’s investments extend into a variety of other areas as it seeks to bolster not only surrounding communities but equally its own offerings. Digitisation, for example, is a core part of the firm’s agenda across all business segments right now. “With the future of banks being digital, we have to give our customers products and services that speak to that,” Mohamed reveals. “Within the next six months, you can expect to see a lot of exciting innovations become part of our portfolio.” A major rebrand is also underway for Barclays Tanzania as it gears up to incorporate the name of its parent company, Absa Group Limited. “This is very high on our list of priorities,” Mohamed affirms, stating that Absa’s warm, vibrant red colour palette will soon be appearing across its branches and ATMs during the remainder of 2019 and beyond. “The process is subject to regulatory approvals and we thank our regulators for the ongoing support. “It’s a deliberate move from Absa Group to rebrand all its operations to Absa, as was announced in July 2018. Our legacy will serve us well for the future, and as we enter a new era, you can expect to see the energy and the vibrancy of the Absa brand taking us to new levels.” This rebrand and digital drive combined, the CEO and Barclays Tanzania have every right to be optimistic for the future as the bank becomes ever-more focused on driving value for an ever-widening customer base. Mohamed concludes, once again highlighting the positive climate that is facilitating the firm’s continual transformation: “We’ve seen an increase in industry profitability over the last couple of years, and the overall outlook remains positive. “GDP growth rates, inflation and foreign exchange rates all remain within the target range, and the economy is well diversified with a debt to GDP ratio that is within expectations. “We’re certainly excited about the direction of both country and company as we prepare for an incredible journey of brand transformation.” Source: https://www.africaoutlookmag.com/outlook-features/barclays-bank-tanzania
BASED ON THE ARTICAL ABOVE, DISCUSS HOW BARCLAYS BANK TANZANIA CAN USE ANSOFF'S MATRIX AS A BASIS FOR GROWING THE BRAND IN THE FUTURE.
YOUR ANSWER SHOULD INCLUDE THE FOLLOWING:
A) EXISTING MARKET PENETRATION STRATEGY
B) NEW PRODUCT DEVELOPMENT STRATEGY
C) NEW MARKET DEVELOPMENT STRATEGY
D) DIVERSIFICATION STRATEGY
20 MARKS
In: Economics
What factors lead you to believe that the US will still be the leader of the free world 50 years from now?
What factors lead you to believe that the US will NOT still be the leader of the free world 50 years from now?
In: Economics