Bipolar disorder is a unique disorder that causes shifts in mood and energy, which results in depression and mania for patients. Proper diagnosis of this disorder is often a challenge for two reasons: 1) patients often present as depressive or manic but may have both; and 2) many symptoms of bipolar disorder are similar to […]
In the accommodations market, Airbnb appears to have a significant advantage over its competitors as it relates to regulations affecting the operations of its business.
Develop a business strategy that will allow Airbnb to meet local, state, and international regulatory requirements and motivate individuals to benefit from participating in this space of the accommodations market. Address the following questions:
How can Airbnb ensure the ethical treatment of consumers?
Should there be a separate strategy for the international component of their business model?
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Using your analysis of the strategic plan from the Wk 2- Strategic Plan Research assignment, complete the following:
Analyze in 350 to 525 words the:
Purpose of the strategic plan
Key objectives:
Market development and how your ideas fit
Process improvement
Development of people
Product/service – How do you deliver? Is there a way to improve quality over time to differentiate?
Key performance indicators (KPIs) to measure performance over time
Recommend initiatives to support your objectives to improve the strategic plan.
Identify ways to adapt to the changing business environment
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Submit your synthesis of financial data related to long-term financing needs for an organization, to include the following:
Part 3: Long-Term Working Capital Considerations: CAPM, Stock Valuation, and Project Evaluation Tools (1–2 pages, plus calculations in Excel)
• CAPM and Required Return: The company has a beta of 1.1, and the closest competitor has a beta of 0.30. The required return on an index fund that holds the entire stock market is 11%. The risk-free rate of interest is 4.5%. By how much does your company’s required return exceed your competitor’s required return?
• Constant Growth Valuation: The company is expected to pay a $1.80 per share dividend at the end of the year (i.e., D1 = $1.80). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, rs, is 10%. What is the stock’s current value per share?
• Nonconstant Growth Valuation: The company recently paid a dividend, D0, of $2.75. It expects to have nonconstant growth of 18% for 2 years followed by a constant rate of 6% thereafter. The firm’s required return is 12%.
o How far away is the horizon date?
o What is the firm’s horizon, or continuing, value?
o What is the firm’s intrinsic value today, P0?
• Weighted Average Cost of Capital: The company has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8%, and its marginal tax rate is 40%. The current stock price is P0 = $22.00. The last dividend was D0 = $2.25, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC?
• Capital Budgeting Criteria: The company has an 11% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:
o What is each project’s NPV?
o What is each project’s IRR?
o What is each project’s MIRR? (Hint: Consider Period 7 as the end of Project B’s life.)
o From your answers to parts a, b, and c, which project would be selected? If the WACC was 18%, which project would be selected?
o Construct NPV profiles for Projects A and B.
o Calculate the crossover rate where the two projects’ NPVs are equal.
o What is each project’s MIRR at a WACC of 18%?
Executive Summary (page 1 of your report)
Provide the company owner with a 1-page executive summary of your findings and recommendations. Address the following in your executive summary:
• Briefly identify the purpose of your report.
• Concisely summarize the results of your financial analysis of the company’s short- and long-term capital budget needs.
• Synthesize your recommendations for how the company can raise money in the short-term and long-term to continue to add value to the organization.
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