Operations Management

Clear Title Good title is a must, as the moderator should be able to understand what the bug report is about from the title alone. One bug per report Report one bug in a single report, no more, no less. If you put in too many bugs, some of them may be overlooked. Actual results: This section should expand on the title by explaining when/where/why/how the issue occurs. Expected results The Expected Results section should focus on how the app behaves in normal conditions. Ex: The authorisation phase completes successfully, the user is logged into the newly created account and redirected to the home page of the app. Steps to reproduce: The Steps to Reproduce section should focus on providing accurate and specific information so that the issue could be replicated. Severity of the bug Bugs can be classified by how severe the issue is. We use 5 categories to identify the severity of the bug. Critical -  the bugs we need to fix immediately. These are the bugs that wil

Private Debt financing  –             Private debt and corporate bonds are different in a way that the private debt is usually held by intuitional investors, funds, insurance companies (Reicherter, n.d.). And these private debts are not as liquid as corporate bonds. The company needs to find a fund or company to get the private debt. This debt is similar otherwise. There is no change in ownership due to private debt. The company will have to make the interest payment and at the end of the loan term, they will have return the full amount due to the lender. In any case, the business does not do well or has to file for bankruptcy, they will have to liquidate the assets to pay back the lender.                       This company has a current Debt t Equity ratio of 0.6, so based on a rating on rating agency, it will have to pay the interest on the debt. And the payment of interest on debts will go out from earnings. Most probably the company will have to pay a higher interest rate, a

For the company, there are 2 options available. Going public with an initial public offering or selling equity to investors or bonds worth $135 million. These 2 options are very different than each other. Let us first explore what will happen if they want to sell equity in the company. Through an Initial Public Offering or IPO, a company raises capital by issuing shares of stock, or equity in a public market (Fuhrmann, 2013). But this is a family business and privately held company so they never had to make their financial results public or any information such as a change in the board of directors’ public, but going public means this company will have to make all these information public. To be precise they will have to file this information with SEC. But before they can file IPO they will have to hire an Investment Bank. Hiring investment bank starts 12 months before going public, and the fees and experience play crucial roles in selection.             Before going public th

The current cost of Capital of Secure and Safe on a Weighted average basis Cost of Debt - The company currently has $50 in bonds which pay a 5.5% coupon Applicable tax rate – 30% So cost of the debt is = 0.055(1 - 0.3) = 0.0385 or 3.85% The cost of this debt is less because of the tax shield. Interest expenses are tax-deductible for the company (Folger, 2018). In other words, the company pays $2,750,000 in coupon payment. The company can save 30% of interest paid in tax payment, or $825,000 is saved in tax, and that reduces the cost of capital for this bond. Cost of Preferred Cost – The company has $20 million in preferred stock of par value $50 which pays $2.75 per share Cost of preferred stock = 2.75 / 50 = 0.055 = 5.5% Preferred stocks are both equity and debt component. There is no upside for the investor but the dividend payout is consistent. For the company, there is no tax benefit on dividend payout though, on $20 million preferred stocks the company hands out $1,100,

  For the company, there are 2 options available. Going public with an initial public offering or selling equity to investors or bonds worth $135 million. These 2 options are very different than each other. Let us first explore what will happen if they want to sell equity in the company. Through an Initial Public Offering or IPO, a company raises capital by issuing shares of stock, or equity in a public market (Fuhrmann, 2013). But this is a family business and privately held company so they never had to make their financial results public or any information such as a change in the board of directors’ public, but going public means this company will have to make all these information public. To be precise they will have to file this information with SEC. But before they can file IPO they will have to hire an Investment Bank. Hiring investment bank starts 12 months before going public, and the fees and experience play crucial roles in selection.             Before going public

Through an Initial Public Offering, or IPO, a company raises capital by issuing shares of stock, or equity in a public market (Fuhrmann, 2013). There are few reasons for a private company to go public – 1.    Raise cash for expansion or debt reduction 2.    Some initial investors ( angel investor or venture funds) might want to exit 3.    Becoming public can generate buzz and might mean awareness of the brand or the company 4.    The shareholders like CEO or the founder members can see value unlocking of their holdings Before a private company can go public it has to hire investment banks with experience in same business sector, so that they (Underwriter of the bank) can value the business. Here important point to note that businesses are usually valued based on valuation multiples of the sector, potential future earning etc,. And Investment banks usually find initial investors too. Before a company goes public, it has to come up with a prospectus with all the company re

Market Capitalization method is one of the easiest ways to value businesses/companies listed in the stock market. In this method, we need to multiply the number of outstanding stocks with the market price of each share to find out the market capitalization of the business/company (Investopedia, n.d.). For example – a fictitious company ABC Inc. is listed in NYSE, it has 1 billion outstanding shares, and on NYSE each share is priced at $10, in this case, the market capitalization of AB Inc. is $10 billion. Book value is very different than market capitalization. Book value is calculated based on the assets and liabilities a company has. So, it is more of an accountant’s job than the market price (Investopedia, n.d.). Book Value = Total assets – Total liabilities Book value per share = book value/number of shares outstanding Note – here a company can have more current and long-term liabilities than its current and long-term assets, so book value can be negative. On the other han

A Company’s market capitalization is calculated by multiplying the number of outstanding stocks and the current market price of one share. This one way to calculate the value of the business by investors (Investopedia, n.d.). For example “Xyz Company” has 10 million outstanding shares and in a major stock exchange, one share is being sold at $50. In that case, the market capitalization of this company is only $500 million and investors might call it a small cap company at current context. Apple, Google, Exxon they are big cap companies, but the formula to calculate market cap is same all across for all companies. It is a fairly easy way to calculate the value of a company and an investor might decide to invest solely based on the market cap, although that won’t be a good investing strategy. One simple fact is, an investor with $50 million to invest can buy every single share ( but the current shareowners should be willing to sell) and own 100% of the business. Market capitalization

First let us quickly find out total portfolio value we know the number of stocks and price of each stock, we can multiple number of stocks with price of each stock and then sum up – Type of Investment Company Name Stock Symbol Portfolio Position (# of shares) Current Market Price Current Market Value Common stock Altria MO 119 50.20 5,973.80 Common stock AT&T T 173 32.65 5,648.45 Common stock Chevron CVX 26 104.98 2,729.48 Common stock Coca Cola KO 59 40.55 2,392.45 Common stock Duke Energy DUK 65 76.78 4,990.70 Common stock Johnson & Johnson JNJ 31 100.60 3,118.60 Common stock McDonalds MCD