Nike Cost of Captial - 777 Words

Nike Cost of Capital I. Single of Multiple Costs of Capital Since Nike has multiple business segments it is appropriate to question whether to use single or multiple costs of capital for the analysis. Kimi’s assistant Joanna went ahead and chose to use one cost of capital for Nike. We agree with her decision because Nike’s different segments are all generally sports related and are susceptible to the same market risks. For example, Nike’s footwear and apparel lines, which make up a combined 92% of their revenue, are segments that complement each other and are sold through the same marketing and distribution channels. Non-Nike products made up only 4.5% of Nike’s revenue including the Cole Haan brand, a company that sells casual dress and†¦show more content†¦Instead of deriving the amount of equity from book values, we calculated Nike’s current market capitalization by multiplying the stock price by the number of shares outstanding and arrived at $11,427,435,000. According to our new calculations, d ebt is now 10.1% and equity is now 89.9% of Nike’s total capital. III. Cost of Debt By using the yield to maturity approach, we were able to calculate the cost of debt of Nike. Examining the information provided through exhibit 4, a 20 year bond was issued with an interest payment of 6.75% semi-annually. With this semi-annual status, I=3.375% and N would be equal to 40. Lastly, the current price of the bond (P1) is $95.60 and the par value (P0) is $100. Taking in to consideration the corporate tax rate of 38% and using the redeemable bond formula, we found the cost of debt to be equal to 4.5%. IV. Cost of Equity We estimated the cost of equity using both the capital-asset-pricing model (CAPM) and the dividend growth model (DGM). Two separate WACCs were calculated on separate sheets simply for comparison reasons. We choose to take the WACC using the cost of equity derived from the CAPM method however, since it is known to be the superior method. Our estimate of Nike’s cost of equity using the DGM method is 6.64%. This was achieved by taking the .48 dividend payment, dividing it by the current share price of $42.09 and adding it to the dividend growth rate of 5.0%. Our estimate of Nike’sShow MoreRelatedNike vs. Under Armour Essay2943 Words   |  12 Pagesindustry are the companies in? Nike; one of the most well known companies across the globe today is most known for being the world’s #1 shoemaker. They design and sell shoes for a variety of sports including baseball, golf, tennis and football. Nike also sells dress and casual shoes as well as athletic apparel and equipment for almost every sport imaginable. In addition Nike also operates NIKETOWN shoe and sportswear stores, factory outlets along with Nike women shops. One of Nike’s biggest competitorsRead MoreContemporary Issues in Management Accounting211377 Words   |  846 Pagesanalysis, contingency frameworks, performance measurement systems, and strategic cost management, which are considered from the perspective of changing concerns facing modern organizations and present-day management thought as well as in the light of some of their historical dimensions. Other chapters deal with newly emerging concerns in management accounting, including network relations, digitization, integrated cost m anagement systems, knowledge management pursuits, and environmental managementRead MoreFundamentals of Hrm263904 Words   |  1056 Pages134 Factors That Affect Recruiting Efforts 134 DID YOU KNOW?: Something for Everyone 135 Constraints on Recruiting Efforts 135 Organizational Image 135 Job Attractiveness 136 Internal Organizational Policies 136 Government Influence 136 Recruiting Costs 136 Chapter 7 Foundations of Selection 154 Learning Outcomes 154 Introduction 156 The Selection Process 156 Initial Screening 156 Completing the Application Form 157 DIVERSITY ISSUES IN HRM: Interview Questions 158 Key Issues 159 Weighted Application

Fred Wilcoxs Science Fiction Film, Forbidden Plane has a...

Comparison and Contrast In the 1956 science fiction film by Fred Wilcox, Forbidden Planet closely resembles many other pieces of literature. The most obvious resemblance to Forbidden Planet is Shakespeares The Tempest. As expected, the characters and plot of Forbidden Planet closely mirror those characteristics of The Tempest, with the exception that where The Tempest engages magic, Forbidden Planet utilizes technology. What is more important, however, is that how the technology works is irrelevant for the purpose of the movie, which is to entertain and to teach us a lesson about mans control over the elements and over his own technological creations. Forbidden Planet strongly resembles Shakespeare’s The Tempest through the characterization similar in both the play and the film. In Shakespeare’s The Tempest, Prospero and Miranda became stranded on a remote island that has no person except for Caliban on it. Prosperon using the magic he has created, he gradually gains control of the island and turns Caliban into his slave. A group of sailors is shipwrecked on the island, one of whom falls in love with Miranda, the lovely daughter of Prospero. Throughout the story, Caliban and other servants plot to overthrow Prospero, but are caught and taken back to the custody of Prospero. In the science fiction film Dr. Morbius and his daughter Altaira are in control of a remote planet when a U.S. spaceship lands on the planet to gather information. Commander Adams of the

Economics for Sustainable World

Question: Discuss about the Economics for Sustainable World. Answer: Introduction Business in India tends to behave in a completely different manner as compared to any other nation across the world. As stated by Searle (2014), it is noted that the companies greatly depend on the prevailing conditions, industry attractiveness, competition and their individual customer bases for developing initiatives. Being recognized as the people`s country, organizations value the environment and thereby undertakes decision making with utmost care. Apart from the various industry sectors across India, there has been a noticeable progress of real estate enterprises. Moreover, it is the management of any organization which not only enables it to fulfil its objectives, but also help in filling up pitfalls and catering to develop capabilities (Rouanet Halbert, 2016). For this particular project, a well know Indian Business Corporation named Puravankara Project Limited has been taken into consideration. Additionally, along with a focus on the background of the firm, the report includes a deep rooted study of its existing situations, competencies, requirements and developments as well. Like every other enterprise, Puravankara is also affected by the various internal and external factors. Apart from highlighting the several elements that directly or indirectly impacts the business, the project discuses about the growth of sustainability awareness and the company`s role in it. In addition to a management view, the report tends to emphasize the economical perspective of the business as well. Background of the Business According to Shatkin (2016), over the years there has been a significant development in the real estate trade of India. Also, among the various firms that carry out business, Puravankara Projects is one of the leaders that prevail in the industry. It is noted that the firm has achieved tremendous success at a domestic as well as international level. As opined by Searle (2016), despite of being inaugurated in the early year of 1975, the management has actively taken part in adapting to the changing atmosphere and thereby integrating modernization in the structural framework. With a growth of core competencies, the brand has expanded from Mumbai to Bangalore, Mysore, Hyderabad, Kochi Chennai and foreign countries like Dubai, Saudi Arabia and Colombo. Being a real estate developer, the firm involves in building and construction activities across the nation. It is noted that the organization has completed over 48 housing projects, 2 commercial initiatives and has many ongoing development ventures. Additionally, the brand also has successfully established Purva interiors that along with fulfilling designing activities, visions to trun their client`s dream house into a reality. Concerning Bangalore, the firm has successfully developed several projects like Purva Paradise, PurvaCastelaine, Purva Vantage, Purva Pavilion and many others. The management of the real estate organization tend to focus on developing its customer segments to be able to continue business effectively. India being a diverse nation is home to a population of 130 crore and more. It is noted that Purvankara targets both residential and commercial sectors (Crowe et al., 2013). Specifically, people belonging to the age group of 35 to 55 are identified as the most contributing clients of the brand. Further, first time home purchasers, median age of 25 to 35, sole proprietors, and also various business firms form the customer base of the brand. Concerning the location of the buyers, the metropolitan cities of the nation (Kolkata, Chennai, Delhi, Mumbai, and Bangalore) and a few overseas regions seem to be the most feasible options (Top Real Estate and Project Developers | Puravankara., 2017). According to Vishwakarma (2013), the high profit levels and opportunities have led to a consequent rise in degrees of rivalry as well. Not only do the competitors deal in the same line of goods and services, but also tend to target the same customer segment as that of Puravankara Projects. Several firms like, Era Infra Engineering, Omaxe Ltd, Peninsula Land, HDIL (Housing Development and Infrastructure Ltd), SRS Real Infrastructure, Prestige Group and many others pose a direct threat to the brand. On the other hand, organizations like Brigade Group, Oberoi Realty, DLF Ltd, Godrej Properties and various similar firms tend to increase competition at the local as well as international level. It is noted that major competitors are located in Mumbai, Delhi, Southern India, Dubai and parts of UAE. Name Last Price Market Cap. (Rs. cr.) Sales Turnover Net Profit Total Assets DLF 126.50 22,567.52 2,451.34 974.56 26,269.57 Oberoi Realty 305.35 10,364.10 1,179.77 475.47 3,824.65 Godrej Prop 322.75 6,983.15 340.26 30.37 4,730.11 Prestige Estate 181.00 6,787.50 2,655.98 361.81 7,803.00 Phoenix Mills 368.75 5,644.34 355.79 150.89 3,061.58 Indiabulls Real 80.75 4,091.31 17.38 55.16 9,016.50 Omaxe 159.30 2,913.61 1,138.25 51.47 2,571.54 HDIL 63.05 2,736.40 1,168.30 264.96 12,947.89 PNC Infratech 104.45 2,679.55 2,014.16 242.74 1,368.31 Sobha 264.45 2,546.78 1,803.30 136.90 4,547.82 Brigade Ent 155.40 1,765.90 1,226.45 146.36 2,421.84 Sunteck Realty 243.05 1,530.39 163.45 140.06 944.46 Anant Raj 43.65 1,288.10 408.20 55.64 5,088.40 Puravankara 44.15 1,047.02 983.49 77.49 3,604.24 Table: Market Position of Puravankara Projects (Source: Annual Reports., 2017) Puravankara Projects with a market capital of Rs. 1047.02 cr tends to rank 14th (5% market share) in the real estate business of India. Analyzing the market condition of the sector, it can be inferred that the industry tends to be closer to a situation of perfect competition. As stated by Squires Heurkens (2014), the existence of numerous firms and customers in the market disallows monopoly of a single enterprise. Further, there exists a very low bargaining power of the buyers and suppliers as well. On the other hand, there also prevail a large number of close substitutes of the good and services provided by Puravankara. It is noted that the average income of India`s population amounts to $616, thereby affecting pricing strategies of the firm. Moreover, the management tends to maintain a proportionate relationship with the per capita income level of the nation, hence leading to the building up of relatively elastic demand curve (Srinivasan, 2016). Concerning mark up of price above the marginal cost, the management might opt to satisfy the need for increased input cost by raising the price level of goods and services. In case when the demand curve is elastic, the mark-up tends to be low or zero (perfectly elastic). Production Costs and Scale According to Glaeser (2016), the factors of production as per economic terms is describes as the inputs that are utilized as a part of the creation of merchandise or administrations with a specific end goal to make a monetary benefit. The components of production incorporate land, work, capital and business enterprise. These creation variables are also called administration, machines, materials and work, and learning. Variables of production of Puravankara, includes any asset required for the formation of the organisation. At the core, land, capital, labour and business include the greater part of the information sources expected to create a goods or services. Labour incorporates the greater part of the work that workers and labourers perform at all levels of an association, with the exception of the business person. The entrepreneur of Puravankar is the person who takes a thought and endeavours to make a financial benefit from it by joining every single other variable of generation (Lieser Groh, 2014). The business person likewise goes out on a limb on the greater part of the dangers and prizes of the business. Capital is comprised of the majority of tools and hardware used to create a goods and services. As opined by Mitra (2013), the factors of production are of two types namely fixed and variable factors of production. A fixed variable is one, whose amount cannot promptly be changed with the changes in yield or economic situations. Its amount continues as before, whether the level of yield is more or less zero. Buildings, hardware, land, plants and top administration are the fixed variables of Puravankara Projects Limited. A variable element, on the other hand, is one whose amount might be changed in light of an adjustment in yield. Raw materials, power, ordinary labour, fuel are examples of variable factors of the organisation (Thomas, 2015). There is a need of variable factors in larger quantity, when output is more. On the other had it is required less, when output is less or zero. It is vital for organisation to see how their different costs react to changes in the volume of goods and services produced. The breakdown of an organization's fundamental costs decides the profit value level for its items or services, and also various parts of its general business strategies. An independent company proprietor can utilize an information of fixed and variable costs to decide the organization's breakeven point (the quantity of units or dollars at which total revenue is equal to aggregate costs, so the organization earns back the original investment), and in settling on choices identified with evaluating products and services. As compared to the fixed cost, the variable cost for production in Puravankara is likely to be fluctuating in nature. Further, it is noted that the real estate firm tends to work towards achieving a perfect condition of economies of scale, thereby enhancing lower per unit costs die to bulk purchases, manufacturing and discounts. With a fulfilment of targets and lowering unit costs, the Puravankara`s optimal size is expected to be large. Macro Business Environment Puravankara Projects Limited like every other real estate firms is impacted by the changing macro environment conditions. In addition to political and economical factors, the organization is greatly affected by the instable conditions. Among the various elements, the instability in the nation`s legislation tends to greatly affect performance of the enterprise. Further, along with affecting demand rates, the government has a direct impact on prices and functioning of the firm (Viswanathan et al., 2014). It is noted that taxonomy structures, rigid rules, regulations, standardization and subsidies tend to put a pressure on potentiality of the corporation. Also, with a differentiation among the industry, the government tends to outlook every characteristic in a segregated manner. The political aspect tends to have a medium or low stability feature in India. On the other hand, the economical market of the nation tends to have a strong impact on Puravankara. The policies of RBI, GDP rates, change in foreign exchange rates, land valuation and various other similar elements put a pressure on the business performance. It is noted that the 7.5% ($ 1,498.87) GDP growth, 5.88% CPI inflation and the high potential of the country shapes performance of the firm. Moreover, the 9.4% rise of unemployment rates also tends to affect the job and staffing structure of the firm. According to Chatterjee (2015), a change in the job opportunities is likely to shape the functionality of the industry as a whole. Based on the economical statistics of the RBI it can be seen that the average interest rate of India maintains its position at 6.5% (2016) and is expected to rise in the near future. It is noted that the growth of numerical figures have led lead to a consequent economic boom in the nation, which further will have a impact on the real estate company (Da s Sharma, 2013). Concerning the exchange rates of the nation, US $1 = INR 68.16, thereby impacting foreign business exchange of Puravankara. Reviewing the macro environmental conditions prevailing in India, the following can be concluded: Puravankara`s goods and services tend to be normal in nature. Hence, unlike inferior commodities, demand for the products provided is expected to rise with a rise in income level. However, with a nature of one time investment, real estate goods are the most expensive that people might buy in their lifetime. On the other hand, with a change in the external condition to the industry, the organization will be confronted with consequent problems. In addition to a fall in demand or supply levels, the brand might be confronted with labour shortages, non-utilization of resources, currency rates downfall, and many other negativities. A change in the exchange rate might provide Puravankara with a multi dimensional condition. In case of exports to the foreign land, a rise of currency values will ensure a higher level of profits. While, on the other hand, it might lead to drain of capital from the firm in case of imports. Sustainability Factors of the Business According to Sharp (2013), the production process of Puravankara creates negative externalities. In order to carry out the production process the company often tends to utilize harmful chemicals like chlorine and sulphur-based items which, if discharged into the atmosphere, are exceptionally hurtful to biological communities. These are the external cost of production that Puravankara bears. It is noted that with no government intervention, the company would just be worried about their private expenses of generation (MPC). In this way, the firm would deliver where their MPC bend meets the minimal social advantage (MSB) bend at amount Q1 and value P1. In any case, the association's private expenses do exclude the social expenses of creation (MSC) of contamination portrayed previously. In the event that the firm creating a situation of MSC = MSB (Pareto optimality/socially effective level of yield), then they would deliver amount Q* at value P*. This is not happening in the free market, and this negative externality of generation is shown by the separation amongst MPC and MSC (purple bolt). The red triangles speak to the welfare misfortune to society (where MSC MSB). In order to mitigate the issues created due to negative externality, the government imposes a pigouvian tax rate on the company. The consumption of goods creates positive externalities as the consumption of goods increases the utility of the consumers. The consumers are able to meet their demand and thereby satisfy their consumption needs. The viability of the business is measured by its long term survival, and its capacity to have supportable benefits over a timeframe. An organization that has a positive market reputation has a developed competitive advantage over its rivals. Puravankara managers understand the significance of putting resources into preventive support to keep gear in great working order (Annual Reports., 2017). Sustainability practices can enhance financial returns and create a positive picture for organizations and their products. It is noted that true supportability initiatives in the organization along with contributing towards fulfilling legislative and ecological requirements, also tends to identify buyer request with higher maintaining capability. Conclusion In the above study, the business environment of Puravankara Project Limited has been studied. Analyzing the various aspects of the project it can be concluded that the organization has high level profits and a stable business environment. However, the company has a number of rival companies that increases the market and sustainability threat. Concerning factors of production, the business have both fixed as well as variable assets and factor of production. Additionally, with a lower per unit cost, the optimal size of Puravankara is significantly large. Reviewing, the externalities, it can be inferred that the brand economically and politically stable in the market. Lastly, the sustainability practices of the enterprise contribute towards achieving long term business viability and an increased level of competitive advantage as well. References Annual Reports. (2017).Puravankara.com. Retrieved 9 January 2017, from https://www.puravankara.com/pages/Annual_Reports Chatterjee, S. (2015). An economic analysis of foreign direct investment in India. Crowe, C., DellAriccia, G., Igan, D., Rabanal, P. (2013). How to deal with real estate booms: Lessons from country experiences.Journal of Financial Stability,9(3), 300-319. Das, P., Sharma, D. (2013).Real Estate Finance in India. SAGE Publications India. Glaeser, E. L. (2016).Real Estate Bubbles and Urban Development(No. w22997). National Bureau of Economic Research. Lieser, K., Groh, A. P. (2014). The determinants of international commercial real estate investment.The Journal of Real Estate Finance and Economics,48(4), 611-659. Mitra, A. (2013). E-commerce in India-A Review.International Journal of Marketing, Financial Services Management Research,2(2), 126-132. Rouanet, H., Halbert, L. (2016). Leveraging finance capital: Urban change and self-empowerment of real estate developers in India.Urban Studies,53(7), 1401-1423. Searle, L. G. (2014). Conflict and commensuration: contested market making in India's private real estate development sector.International Journal of Urban and Regional Research,38(1), 60-78. Searle, L. G. (2016).Landscapes of accumulation: Real estate and the neoliberal imagination in contemporary India. University of Chicago Press. Sharp, D. (2013). Risks ahead: the transformation of the corporate real estate function.Journal of Corporate Real Estate,15(3/4), 231-243. Shatkin, G. (2016). The real estate turn in policy and planning: Land monetization and the political economy of peri-urbanization in Asia.Cities,53, 141-149. Squires, G., Heurkens, E. (2014).International Approaches to Real Estate Development. Routledge. Srinivasan, R. (2016). Organising the unorganised: Role of platform intermediaries in the Indian real estate market.IIMB Management Review. Thomas, J. J. (2015). Indias Labour Market during the 2000s.Labour, Employment and Economic Growth: The Indian Experience, 21. Top Real Estate and Project Developers | Puravankara. (2017).Puravankara.com. Retrieved 9 January 2017, from https://www.puravankara.com/pages/CompanyProfile Vishwakarma, V. K. (2013). Is there a periodically collapsing bubble in the Indian real estate market?.Journal of Applied Business Research,29(1), 167. Viswanathan, M., Jung, K., Venugopal, S., Minefee, I., Jung, I. W. (2014). Subsistence and sustainability from micro-level behavioral insights to macro-level implications on consumption, conservation, and the environment.Journal of Macromarketing,34(1), 8-27.

Mccaskey Case Essay Example

Mccaskey Case Paper Analysis: Martha McCaskey Harvard Business Review The Issue: This case focuses on Martha McCaskey. McCaskey is a relatively recent Harvard B-School grad on the fast track at Seleris Associates. She is a consultant who specializes in competitive analysis for corporations. McCaskey has been assigned as lead on project Silicon 6. She has a strong track record for delivering quality on her projects, which is why she was chosen as lead for this project. The focus of the project is to reverse engineer cost structure and manufacturing processes for the competitor of a key client of Seleris. This unnamed client is responsible for 20% of the revenue for this division. Therefore, the head of the division is invested in making this customer happy. The top managers promised McCaskey a promotion if she could successfully complete the project to the satisfaction of the client. McCaskey is extremely resourceful, but in the case of Silicon 6, she was having trouble gaining access to the required information. That is, until she tripped across an ex-employee of the competitor company who was eager to share proprietary information. McCaskey found this unethical. McCaskey brought the situation to the attention of her management. The managers, eager to please the clients, have encouraged McCaskey to â€Å"pay off† the ex-employee in exchange for the necessary information. Management has challenged her to come up with an action plan for the project and to meet with the head of the division to review the plan. Analysis and Opinion: McCaskey is faced with an ethical dilemma. In this case, she must decide whether to accept proprietary information, which will result in a satisfied lient and a promotion or follow her moral compass and attain the information using ethically acceptable industry standards. This is a clear case of an organization with a questionable ethical climate. An organization with high ethical standards encourages and shapes the behavior of its employees through policies, procedures and behavior. It is the responsibility of the management staff to build an environment with low tolerance for an y activities that can be deemed unethical. We will write a custom essay sample on Mccaskey Case specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Mccaskey Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Mccaskey Case specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Management must focus on the means as well as the outcomes to ensure that they are operating not only within legal boundaries, but socially acceptable and responsible boundaries as well. Malone, McCaskey’s superior, is heavily directing her approach. When McCaskey went into the presentation with the clients, Malone was the one to make the promises to deliver through access from the ex-employee. Malone also authorized the increase in â€Å"pay† to the ex-employee. McCaskey cannot look to her immediate management to resolve ethical issues. The saving grace for McCaskey is, hopefully, Richardson, Malone’s manager. Senior associates often discuss case status directly with Malone and Richardson. McCaskey should use this to her advantage to go directly to Richardson with this dilemma to gain his buy-in to resolve the issues in a more ethical manner. In the past, Richardson has communicated his ethical expectations to the staff via lunchtime talks. Therefore, McCaskey may find a worthwhile advocate in Richardson. It is not clear if Richardson really believes in building an ethical culture as he has given direct management responsibilities to Malone. Richardson has to be aware of Malone’s practices, but has not taken a firm stand on stating and shaping the organization’s values and conduct by providing visible role models who exhibit ethical behavior. However, Kaufmann, an associate who publicly acknowledges unethical behavior, is not being rewarded, as he is one of the lowest paid associates. This leads the reader to believe that Richardson does not support Kaufmann’s actions. At the same time, however, Richardson has turned a blind eye to his practices and has reaped the benefits from his questionable behavior. McCaskey, to this point, has done everything correct. She has operated within ethical boundaries and has raised issues to her management. The true failure is with Richardson who has not fostered a culture rooted in prioritizing and rewarding ethical behavior. Unfortunately, he is McCaskey’s only hope to resolve this issue. McCaskey’s next steps are to raise the situation to Richardson in hopes he can direct her to move forward in a more ethical manner. With so much at stake, including fines and personal imprisonment, McCaskey should not do anything that could endanger the company or her personal well being.