AFM373 Lecture Notes - Lecture 4: Deluxe Corporation, Capital Asset Pricing Model, Capital Structure

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM373
• Professor: Alan Douglas

Document Summary

Deluxe corporation is the largest company, with 49% of the market share, in the highly concentrated and competitive cheque printing industry. Co(cid:396)po(cid:396)atio(cid:374)"s (cid:396)e(cid:448)e(cid:374)ue g(cid:396)e(cid:449) at a (cid:272)o(cid:373)pou(cid:374)d a(cid:374)(cid:374)ual (cid:396)ate of (cid:1005)(cid:1006)%. Ho(cid:449)e(cid:448)e(cid:396), o(cid:448)e(cid:396) the past decade, electronic forms of payment such as atms, credit cards, debit cards, and internet bill- paying systems have gained popularity, resulting in an annual decline of 1% to 3% in cheque demand. Corporation has shifted its strategy to the spinoff of its technology-related subsidiaries, efunds and idlx technology partners. The efunds provide electronic-payments products and services to the financial and retail industries whereas the idlx offers technology-related consulting services to financial services companies. The firm also plans on refocusing on its core business by reverting to a pure-play printing company. Mos(cid:374)e(cid:396), ceo of delu(cid:454)e co(cid:396)po(cid:396)atio(cid:374), has (cid:396)est(cid:396)u(cid:272)tu(cid:396)es delu(cid:454)e"s (cid:396)e(cid:373)ai(cid:374)i(cid:374)g pape(cid:396)- payments segment around three business units: financial services (60%), business services (16%), and direct cheques (24%). Financial services sell cheques to consumers through financial institutions.