MULT-UB 5 Lecture Notes - Lecture 2: Variable Cost

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olivegoldfish846

19 Oct 2014

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Today: competitive landscape, michael porter, revenue models. Linkable?: financials market cap, p/e (ttm), eps (ttm) Market share share price * # shares outstanding. P/e = share price / earnings per share. Eps = earnings / # shares outstanding. Ttm trailing twelve months: compare with competitors, biggest rev != biggest p/e, high p/e positive outlook, stock chart if irregular, why, interbrand measure value of brand look up. Michael porter: porter"s five forces, before. Head to head rivalry to the best (eg bed wars westin st. Compete to provide unique value (eg walmart + target) Buywer pwr dod only buyer of missiles; consortium (hospitals) Competitive rivalry in perishables high (price constant sales), good for buyers. Buyer power, eg: number and size of firms industry size and trends fixed v variable cost bases product/service ranges differentiation, strategy buyer choice buyers size/number change cost/frequency product/service importance volumes, jit scheduling.

Related Questions

Flashback Corporation is evaluating an extra dividend versus a share repurchase. In either case, $28,060 would be spent. Current earnings are $2.60 per share, and the stock currently sells for $97 per share. There are 4,600 shares outstanding. Ignore taxes and other imperfections.

Requirement 1:
What will Flashbackâs EPS and PE ratio be under the two different scenarios? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

	Extra Dividend	Share Repurchase
EPS	$	$
PE Ratio

Requirement 2:
In the real world, which of these actions would you recommend?

(Click to select)Extra dividend or Share repurchase

sangriacamel209

The shareholders of Flannery Company have voted in favor of abuyout offer from Stultz Corporation. Information about each firmis given here:

	Flannery		Stultz
Priceâearnings ratio		13.2		37
Shares outstanding		99,000		370,000
Earnings	$	230,000	$	920,000

Flanneryâs shareholders will receive one share of Stultz stockfor every three shares they hold in Flannery.

a-1.

What will the EPS of Stultz be after the merger? (Do notround intermediate calculations and round your answer to 3 decimalplaces, e.g., 32.161.)

EPS

a-2.

What will the PE ratio be if the NPV of the acquisition is zero?(Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)

PE ratio

b.	What must Stultz feel is the value of the synergy between thesetwo firms? (Do not round intermediatecalculations.)

raspberrypig904

Fly Corporation is evaluating an extra dividend versus a share repurchase. In either case $4,000 would be spent. Current earnings are $2.10 per share, and the stock currently sells for $46 per share. There are 800 shares outstanding. Ignore taxes and other imperfections in answering parts (a) and (b).

1. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth.

2. What will be the effect on Fly's EPS and PE ratio under the two-different scenario?

viridianprairie-dog720

MULT-UB 5 Lecture Notes - Lecture 2: Variable Cost

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