1.) (a) Analyze the reasons for and against the rating change. (b) Think of arguments for and against considering pensions as equity or as debt. (c) Is S&P's methodology coherent before the change in its methodology? (d) After the change? (e) Is the "on balance-sheet" approach suggested by the academics better? (f) Is ThyssenKrupp right in arguing that its rating should not change?
2.) Analyze the reaction of stock and bond prices (Exhibits 10 and 11) and comment on the reaction of capital markets to the announcement. How much value was lost for shareholders, bondholder, and for the company as a whole? Which potential problem occurs when interpreting the stock market reaction in terms of the downgrade of S&P?
3.) Did this event change the cost of capital for ThyssenKrupp? Management argues that financing costs will increase by EUR 20 million annually. Does this have a significant - if any - impact on the overall cost of capital?
4.) Assuming a "BB" rating for ThyssenKrupp, what is the default risk for a one-year horizon? Use these data to work out the increase in the likelihood of default for the rated bonds that were due in February 2009 implied by a rating change from BBB to BB. Compute the impact of the downgrading from BBB to BB on the present value and yield of the bonds due to February 2009.
(1.) (a) Objectively, the deterioration of the credit rating (understood as the risk of default) is hard to justify, because as TK have pointed out, its financial…
FINANCE AND ACOUNTS DEPRTMENT
Each company is carried with a cause of being profitable. Cash or capital being a scare in addition to vital aid in the working of any agency desires to accept prime significance. The financial resources were deliberate and managed in a proper and non-stop manner. As most of the maximum crucial choices of a firm are the ones which relate to finance. Finance & debts from an integral a part of any organisation. proper and clean functioning of this segment could be…
2. Program Break-Even
In determining the break-even analysis, the break-even formula of the total revenue (TR) equals the total expense (TE). In the budget, the fixed revenues (FR) and variable revenues, do not relate to the green fees or the pool prices. Lastly, the formula designates that revenue as unrelated variable revenue (UVR).
(FC - FR) + (VC * Q - UVR)
VR = --------------------------------------
In the spreadsheet (see…
a- Business Process Analyst
b- This job needs a person who has an experience and background of finance, which can analyse the complex finance process to be more effective. Also, under this job, the worker must be able to write reporting about the corporate finance environment. In addition, having good communication skills that can help working with stakeholders. The job is located in Auckland city centre, at Alexzander James Company. The work type will be either contract or temporary.…
Applied Managerial Accounting
Colorado Technical University
Dr. Margareta Moczynski
Part 1 – Memo to New Assistant
To: Susan Thompson
Date: October 6, 2017
Re: Financial Accounting vs. Managerial Accounting
Welcome to Eddison Electronic Company. I am very happy to have you on the team. I look forward to mentoring you and educating you in managerial accounting. I am glad to see that you have a strong background in financial accounting and I am sure that…
of accounting systems: financial and managerial. Both systems of accounting serve different purposes but they are equally as important and essential to the overall financial wellness and proper functioning of the business.
The first records…
My educational goals are to graduate with a double majoring in Finance and Information Decisions Science. I plan to graduate with both majors as well as a few minors. My plan is to graduate with two – to - four minors which are; Entrepreneurship, Business Analytics, Business Operations, and Management Information Systems (MIS). I chose to double major because I have always had a love and interest in both the stock market and computer programing. As a child, my parents owned multiple buildings in…
Edwards, John J. Hampton, Wood and Sangster have shown the role of accounting and finance in controlling resources of a business, where business will account for what it owns and owes. That is goods purchased and expanses prepaid or accruals. In addition to this financial decisions will be made such as: the impact on current assets in deciding the creditor limit and current liabilities when deciding on payments of debts.
Also Michael Jones portrays the effect of costing in planning for…
18 May 2016
Goldman Sachs Group, Inc.
Goldman Sachs Group is a global leader in investment banking and investment management because of their widely diverse client base and capabilities. Goldman Sachs manages individual investment portfolios, provides investment management services such as advising and controlling, perform securities, and finance massive innovative procedures. The spirit at Goldman Sachs is driven by entrepreneurship,…
I am actually responsible for taking managerial accounting. In that class i learn not only to keep track of finances but also work salaries and inventories as well. This is a crucial part of understating math and how it will apply for every part of a business. Keeping finances in order is the only way a company will secede. As a business management major it is important to understand your accounts and where you are choosing to make deals and also very important that you are not just trusting…