Case study Example | Topics and Well Written Essays - 500 words - 4

Case Study Example Hence the only available option is $1250 thousand dollars. 5. The formula to calculate terminal value using the perpetuity method is given as: FCFn X (1+g) / WACC –g, where FCFn is the FCF for the last 12 months of the projection period, g is the perpetuity growth rate and WACC is the weighted average cost of capital. Using this formula, 6. Total interest expense from 1971 to 1976, based upon Exhibit 7 equals 3049 thousand. The actual Interest tax shield (interest expense X tax rate) in a given year equals the minimum of the calculated Its and the projected taxes before the ITS is applied. ITS for each year is thus given as follows: 7. The Adjusted Present Value method may be calculated as the sum of the FCFs discounted by the cost of the assets plus the interest tax shields which are discounted at the cost of debt. The present enterprise value of the corporation for 1971: The free cash flow available in 1971 is $726 thousand. The terminal value is $10,010. Therefore, the sum of PCF and TV is 10726. The interest tax shield available in 1971 is $99372; hence the present adjusted value of the enterprise is $10825372 or about $10 million. 8. Since the investors are prepared to provide $4750 thousand at the rate of 9%, the interest payable amounts to $2,137,500. In order to ensure that the investors are motivated to offer the large amount of capital, the company needs to make sure that they are allowed purchase at least 6 million shares as

Leading innovation and change Assignment Example | Topics and Well Written Essays - 3500 words

Leading innovation and change - Assignment Example Meanwhile, it will be admitted that they ways in which organisations are designed and managed that unwittingly discourage the prioritisation and promotion of innovation (Afuah, 2003). With such behaviours, the organisations are forced to acquire behaviours and practices that they wish they had less of. This paper is therefore dedicated to exploring some unhelpful behaviours and practices that militate against innovation, whiles identifying others that promote innovation. More to this, the paper will explore the role of innovation to competitive advantage as this will encourage organisations to pursue innovation. A number of models will also be considered that help in making the implementation of innovation easier. With all these areas of leading innovation and change considered, it will be possible to conclude on the overall relevance of innovation to modern companies. Howells (2005) observed that before the late 20th century, competitive advantage to companies was all about ways in which pricing models will be used by companies to attract customers over their competitors. This has however been said to change since the late 20th century where innovation has become a key word in fostering the goals of competitive advantage for organisations of all kinds, especially profit making ones (Batra et al., 2000). Tidd and Bessant (2009) stated that the real role of innovation in creating competitive advantage is that it gives different organisations the opportunity of dealing with the same context in different ways. For example, Starbuck, McDonalds and Dunkin’ will all be presented with the same context of having to sell coffee products to consumers but through the power of innovation, each of these companies may do different things that make it possible for them to gain reasonable market share. In the absence of innovation therefore,