Essay on Finance 516

1013 Words May 15th, 2013 5 Pages
FIN-516 – WEEK 2 – MINI – CASE ASSIGNMENT

1. What is the name of the company? What is the industry sector?
Questcor Pharmaceutical is biopharmaceutical company focused on the treatment of patients with serious, difficult-to-treat autoimmune and inflammatory disorders. 2. What are the operating risks of the company? * The complex nature of our manufacturing process and the potential for supply disruptions or other business disruptions * The lack of patent protection for Acthar; and the possible FDA approval and market introduction of competitive products; * The ability to generate revenue from sales of Acthar to treat on-label indications associated with NS, and our ability to develop other therapeutic uses for
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What is the financial risk of the company (the debt to total capitalization ratio)?
The financial risk is considered moderate. Total debt is 90.60M & total debt + shareholders equity is 161.83M. The debt to total capital ratio = 56%. 4. Does the company have any preferred stock?
No, the company currently does not have any preferred stock. 5. What is the capital structure of the company?: Short term portion of Long Term Debt, Long Term Debt, Preferred Stock (if any), and market value of Common Stock issued and outstanding?
The capital structure of the company is 36% debt and 64% equity. Total Liabilities/Total assets=35.98%, there is no preferred stock and outstanding market value on Common stock is 58.54M. 6. What is the company’s current actual Beta?
The company’s current actual Beta is 1.37 7. What would the Beta of this company be if it had no Long Term Debt in its capital structure? (Apply the Hamada Formula.)
Questcor has not Long term debt in its capital structure 8. What is the company’s current Marginal Tax Rate?
Marginal tax rate is 35% 9. What is the Cost of Debt, before and after taxes? 10. What is the Cost of Preferred Stock (if any)?
No preferred stock 11. What is the Cost of

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