Merit Enterprise Corp

One of the contributing factors to the success of J.P. Morgan was its financial involvements in military events of the past. J.P. Morgan established its position as a future world power in 1870 when it extended a ten million pound loan to the French government during the Franco-Prussian

2. New bank credit facility, 600 million cash on hand to take advantage of opportunities that may arise

a) In the first set of calculations, the staff used a discount rate of 20%, a five-year time horizon, and ignored taxes and terminal value. What is the relative attractiveness of these three alternatives?

The main concerns of this case are the way the shareholder stock will be handle (valued) and what the profitable advantages in acquiring Nicholson 's majority shares.

On the other hand, the company’s products would be more seen by consumers, which means the demand for their products probably increase.

"At JPMorgan Chase, we want to be the best financial services company in the world. Because of our great heritage and excellent platform, we believe this is within our reach."

* A new project idea which requires an investment of $2 mm and will generate total cash flows (including any salvage or terminal value) next year of either $4mm (recession) or $8mm (boom). The firm has not yet raised the cash to make this investment, but the market is aware of the investment opportunity.

According to his financial model, the investment generates positive cash flow, excluding the initial investment, over the life of investment. This indicates further capital will not need to be raised for

It has been a serious process for many organizations to raise capital which automatically has business and financial risks involved.

Another important factor is Harvard’s triple A credit rating. As given in the case, the credit rating A helped Harvard finance large positions and place HMC as a preferred counterparty for swap transactions, which was “sometimes a key link in the overall process.”

Depending on how much additional investment needed and what will be the payback period. Another cash flow statement will be needed for further reviewing to decide whether additional funding will be a good

The $7 million is in the form of subordinated debentures that matures in 7 years with an interest rate of 13%. This rate is very high because subordinated debentures investors bear significantly more risk, which is a major drawback of this form of investment since the debt might not be repaid.

4. If you were Woodmere’s top management, what suggestions would you make to improve the current proposal? Why?

Also, the stock market tends to react negatively to announcements of new common stock offerings, whereas debt security announcement tend to have little impact on stock prices. As a additional external financing is needed, the firm will work down the pecking order – from safe to more risky debt, then possibly to convertible debt, and finally to common equity as a last resort.

Q3. Does the company have any other sources that it could use to raise the funds it requires? Explain. (In your answer consider the amount required and the purpose of the funds). In which market can these funds be sourced from?