Equity vs Debt Essay -- GCSE Business Marketing Coursework

Equity vs Debt Financial Statement Information - Debt and Equity Holders Debtholders and equityholders as claimants to a firm’s future cashflows are interested in assessing risk. Debtholders Debtholders are primarily interested in assessing whether the firm’s cashflow will be sufficient to make interest and principal payments on a timely basis The lower the probability of a cash shortfall, the lower the risk to the debtholder Debtholders therefore gather information about the firm’s liquidity, debt capacity and liquidation value of assets Equityholders Equityholders are residual claimants of the firm’s cashflows. Shareholders in effect, hold an option on the value of the firm’s assets, with the exercise price equal to the face value of the debt. It is well known that the option component of equity value increases with the variance of expected future cashflows – Black and Scholes (1973) and with the firm’s debt to equity ratio. Therefore, when equity has a large component of option-like characteristics, financial statement analysis focuses on assessing both the expected level and the variance of future cashflows when valuing equity. At extreme debt levels, the equity is a ‘deep in the money’ option and its valuation does not require the use of the option pricing model. More traditional valuation models suffice. Financial analysts are interested in assessing a firm’s Beta risk so that they can perform valuation of traded stocks, seasoned e... Equity vs Debt Essay -- GCSE Business Marketing Coursework Equity vs Debt Financial Statement Information - Debt and Equity Holders Debtholders and equityholders as claimants to a firm’s future cashflows are interested in assessing risk. Debtholders Debtholders are primarily interested in assessing whether the firm’s cashflow will be sufficient to make interest and principal payments on a timely basis The lower the probability of a cash shortfall, the lower the risk to the debtholder Debtholders therefore gather information about the firm’s liquidity, debt capacity and liquidation value of assets Equityholders Equityholders are residual claimants of the firm’s cashflows. Shareholders in effect, hold an option on the value of the firm’s assets, with the exercise price equal to the face value of the debt. It is well known that the option component of equity value increases with the variance of expected future cashflows – Black and Scholes (1973) and with the firm’s debt to equity ratio. Therefore, when equity has a large component of option-like characteristics, financial statement analysis focuses on assessing both the expected level and the variance of future cashflows when valuing equity. At extreme debt levels, the equity is a ‘deep in the money’ option and its valuation does not require the use of the option pricing model. More traditional valuation models suffice. Financial analysts are interested in assessing a firm’s Beta risk so that they can perform valuation of traded stocks, seasoned e...

Competitive Analysis of Crest Whitestrips Essay

Every firm’s marketers must develop an effective strategy for dealing with the competitive environment. A company may position its product or service with an eye towards its ability to sustain that position (Hooley and Greenley, 2005). The most direct competition occurs among marketers of similar products. The indirect competition involves products that can be easily substituted. One company may compete in a broad range of markets in many areas of the world. Another company may specialize in a particular market segment like geographic location, age, or income characteristics. Marketers must make product pricing, distribution, and promotional decisions that give the firm a competitive advantage in the marketplace. The overall health of the economy determines how much a consumer is willing to spend on a particular product. Industry Analysis There are many other companies that have teeth whitening products such as Colgate-Palmolive’s Total Plus Whitening toothpaste, Listerine whitestrips, Rembrandt’s whitening toothpaste and whitening kits, and Aquafresh White Trays. I believe the degree of differentiation within this industry is oligopoly. Oligopoly is a common market form. Oligopolistic competition can give rise to a wide range of different outcomes. Competition between sellers in an oligopoly can be fierce, with relatively low prices and high production. This could lead to an efficient outcome approaching perfect competition. The competition in an oligopoly can be greater than when there are more firms in an industry if, for example, the firms were only egionally based and didn’t compete directly with each other. In an oligopoly, firms operate under imperfect competition. Following from the fierce price competitiveness created by this sticky-upward demand curve, firms utilize non-price competition in order to accrue greater revenue and market share. These firms dominate the teeth whitening industry and form a large proportion of it. Competitive Analysis Crest Whitestrips competitors are Aquafresh white trays, Listerine whitestrips, and Rembrandt whitening system. Crest whitestrips come in various strengths and styles, but the basic model is the same for all their products. They are not uncomfortable to wear. They may cause excessive saliva, which makes it harder to apply. They may sometime cause sensitivity that lasts a few days. Aquafresh White trays can get clumpy and whiten unevenly. The trays may cover more area than Crest Whitestrips, but the trays may not fit all mouths, are less comfortable, and can cause gum irritation. Finally, it’s more difficult to find inexpensive White Trays. Crest Whitestrips are usually about $10 cheaper, possibly because they whiten more gradually. If you need something fast and only have half an hour a day, Aquafresh may be your product, but it will probably be less comfortable and a little more expensive. Learning about customer needs and wants is an important part of competitive analysis. Customer’s priorities should become the companies’ priorities. Analysis of product strategy toward competition Strategic plans should touch on all areas of a business’s operations, including production of goods and/or services, distribution of those goods and/or services, pricing of goods and/or services, and marketing of goods and/or services. Decision makers must continually monitor competitors’ marketing activities, their products, channels, prices, and promotional efforts. Most business’ want to achieve superior marketing performance in their industries and develop a system for continuously comparing and measuring performance against outstanding performers. As competition intensifies, competitors tend to cut prices to attract new buyers. The reduction in price can cause a decrease in revenues for all firms in the industry, unless the lower prices stimulate enough new purchases to offset the loss in revenue on each unit sold. If current customers buy more frequently than they normally did, total sales will rise even though no new buyers enter the market. This firm benefits by developing comprehensive product lines as opposed to concentrating solely on individual products. This diversity allows the firm or company to maximize sales opportunities within the limitations of its resources.

Interpersonal Essay Based on a Movie - 840 Words

Introduction â€Å"Men and women cant be friends, because sex always gets in the way†, is the main theme of the movie â€Å"When Harry met Sally†. The script is a good example of the interpersonal communication ten stage model by Mark Knapp. This developmental model entails the stages of a relationship from it’s infancy to an ending. In the movie we can clearly identify all ten stages of this model. Stage # 1 - Initiating According to the Knapp model, the beginning of every relationship—especially an intimate, romantic or close friendship—begins with the initiation stage. This stage involves the initial contact with another person. In the movie the stage of initiation begins when Harry and Sally meet for the first time and prepare to share a†¦show more content†¦Harry asks Sally if she would like to spend the night at a motel. This dialogue leads to an interesting point of view that men and women in general cannot be friends. However, this stage is not fully developed at this point but has helped them both as a foundation for later encounters. The scene ends with the arrival to New York City. Many years later they meet again on several occasions but the intensifying stage does not resume until they finally become friends and share details about their past failed relationships. During this period they start spending a considerable amount of time together and their expression of feelings toward the other becomes more intense. We see the beginnings of a true interpersonal relationship development. Stage # 4 - Integrating If a relationship strengthens the integration stage begins. During this stage there is a sense of unity and belonging. In the movie as their friendship grows, the integration stage begins at a New Year’s Eve party where they dance together and they recognize that what they feel is more than friendship. Though it takes some time for them to realize their deep feelings, from this point on they are very integrated. They feel closer than ever before, they do things together, they have fights, they get jealous with one another and they comfort each other and have sex. Stage # 6 - Differentiating Soon after integration both feelShow MoreRelatedInterpersonal Communication Theories And Concepts1686 Words   |  7 PagesQuestion have you ever thought about the different Interpersonal Communication theories/concepts we use on a daily basis, I have thought about it long and hard to figure out how many different communication theories in our life we use or even in a favorite movie we love to watch. 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