Need help to figure out Long-Term Investment questions?
I failed my exam and have been able to figure out all my other wrong answers but these 4 to one problem. If someone could plz explain this stuff to me, I could really use the help. As part of hostile takeover, Carl Icahn, Inc. purchased 15% of TWA's outstanding common stock amounting to 200,000 shares. In response to Icahn's actions, TWA restructured and became profitable again. Consequently, Icahn decided not to purchase any additional shares and to continue to keep its ownership in TWA at 15% for long term. Icahn purchased the shares on the open market at an average price of $55/share. In addition to this, brokerage fees amounting to $400,000 were incurred in purchase. For first year after purchase, TWA reported net income of $30,000 in the wake of fierce competition. Dividends were paid according to TWA's policy--70% of net income reported for year will be paid to stockholders as dividends. First part: Assuming Icahn's purchase entitles it pres. to sit on the board of directors (and exert significant influence), and invitation that will certainly be accepted, what will be the balance of the account Investment in Long-Term Stock TWA at end of first year? I answered $11,400,000 which was wrong. 2nd part: If instead of paying out 70% of net income as dividends TWA's top management decided to retain all net income (and therefore pay no dividends), what would be the balance in the investment account at the end of first year? Is it $11,000,000?? 3rd part: If Icahn accounted for the 15% investment in TWA under the cost method, what would be the general ledger entry to record the stock purchase? I think it's actually Long Term Investment--TWA $11,400,000 Cash $11,400,000 4th part: At end of first year, what would be the balance of the Long-Term Investment--TWA account if cost method were applied? I think it's $11,000,000
What are expected questions on the first call with investors?
The number one question your prospective investor (and frankly yourself) are looking to answer is: is this conversation worth taking to the next level? Is this company worth spending any more of my time on?Every call will be different. The answers here are great primers from smart and experienced folks and will really help you prepare, but you can't inoculate yourself by nailing a list of questions—because you will inevitably be asked something not on the list and you need to be prepared for that too.Start by knowing your business. If you have an A-list and a B-list of investors (which I recommend), start with a few calls on your B-list. You’ll be better prepared for the A-list calls.Probably the biggest advice I could give you is don't let this call be a one-way conversation!Before you get off the phone, you should knowDetails about the person’s background that cannot be found on the website.Where their fund is in its lifecycle (do they have dry powder to actually invest or are they just taking your call to keep their deal flow pipe active while they raise a new fund?)What is the typical deal size? (Does that match what you are looking to raise?)How long do they typically take to close? (Most VCs can move pretty quick if they absolutely love your deal, but you want to know if their typical scenario fits your timeline—if you don't have one, create one. Urgency is your friend.)What industry segments are their specialty? (Are you in that segment? Often you can discover this in your research, firms vary in how strict they follow their focus, so you need to know if this helps or hurts you based on where your company falls.)What geographic regions do they invest in? (Will traveling to board meetings be a turn off or do they have other portfolio companies in your area?)Ultimately, you want to know if your company is a fit, i.e., if your company is an awesome opportunity, will some factor unrelated to the quality of your company prevent the deal from happening. NOT knowing these things causes a lot of frustrating follow up for entrepreneurs. If it's going to be a “no” you want to get there as quickly as possible so you can spend time on investors where there is good potential.Good luck!
Cant figure out my econ homework question. PLS HELP!?
Jon, Opportunity cost in economics means that if you spend money on one thing, then you lose the opportunity to use that same money on another thing. For example. Let's say you're an inventor. You want to patent your inventions. You hire a patent attorney for $85,000 per year. That money is no longer available for buying computer equipment, buying a company car, or hiring another high priced employee. It's kind of like saying that you can buy an iPod or you can buy a couple of video games for the same price, but you don't have enough money to buy both. You don't have the opportunity to buy both. You can over-invest in human capital. Let's go back to the example of the patent attorney. You can hire a full time patent attorney for $85,000, or you can go to a law firm and consult a patent attorney for $200 per hour. Filing the patent may take 3 hours of the attorney's time. This comes to @200 * 3 = $600 instead of $85,000.
Mutual Funds / Investing Question, Please Assist?
I like Legg Mason Partners Funds (formerly called Smith Barney). I invest in LMP Aggressive Growth, LMP Fundamental Value, and LMP Appreciation Fund. These are known as "3 Fund Approach." Why? Just like you don't want to invest all your money into one stock, you don't want to invest your money all in one mutual fund (even though it invests 25 to 300 different companies). How you want to diversify your money is up to you, but I put about 33% into all. My dealer is PFS Investments and they don't charge any fees to use their services. You can buy or redeem your shares online. You can check the value of your portfolio anytime online too. Oh yeah, make sure the agent is properly licensed and ask about the complimentary financial need analysis (a very useful financial tool). Anyway, no matter how you invest, don't pull out if the stock market crashes because you know stock market will always rebound (base on past performance).
We (my team) have figured out an interesting solution to solve hiring problems at startups. How should I proceed?
First Register a Company. Then work on a business plan for the company. Get the investors pitch ready. Post them on investor hub portals and attend summits where you can showcase your ideas and shoot mailers to investment firms. who knows , if your idea is bright to investors they might agree to fund your company before even the prototype is evolved. So these are considered as the first initial steps. Then you can start with building the prototype and taking ahead with it . :) All the best.
2 algebra questions, please? Starting equations?
Problem 1. The idea is that you split the investment. Call the part that you invested at 14% "x", and then the rest must be 13,000 minus x which is invested at 10%. What is the interest you earn on each part? These values will be in terms of x. Add them together, and apparently they come to 1580. You should be able to solve for x. Problem 2. You have 5 test scores so far. The final will count as 2 tests, so that makes a total of 7. You want to average 80 for the class. How do you compute any average? You add up all the test scores and divide by 7. Working backward, then, multiply 80 by 7...compare that to the points you have already racked up, and you can figure out how many points you still need. Don't forget that those remaining points come from the final test being counted twice.