Essay on case of finance 3

-Martin Industries just paid an annual dividend of $1.30 a share. The market price of the stock is $36.80 and the growth rate is 6.0 percent. What is the firm's cost of equity?

Life insurance is meant to provide funds to replace a breadwinner's to protect and support dependents. Chad and Haley are dependents, not income providers. Therefore, the purchase of life insurance is unnecessary and not recommended. The Dumonts should use the money they would spend on policies for the children to increase their own coverage.

We are providing below the assumptions and other calculations we used while computing the WACC and the cash flows.

This behavior brings competitive advantages to the European luxury brands. Moreover, customers in different countries have different purchase behaviors. For instance, some countries’ customers are willing to move away from common recognized brand, because they want to purchase more exclusive products. Furthermore, because of the increasing speed of globalization, people are more likely willing to travel between different countries. These travelers will buy luxury good during their trips. In fact, Chinese tourists contributed over one third of sales in Europe. The luxury goods industry should notice to adjust the actual demand between local people and tourists in Europe

The following is my five forces analysis of the competitive forces confronting the companies that operate in the industry that Under Amour, Nike and Adidas operate in.

It is hard to imagine that after the financial crisis swept across Europe, many great transitional enterprises had to face collapse and bankrupt while the luxury goods industry become more prosperous. Recently, the French luxury goods group LVMH announced their recent business condition. The volume of the first week in October had incredibly increased by 12% the previous week. The Hermes Corporation also said that in order to meet the increasing number of market demand, it would open 15 branch stores in the latter half of the year. These aroused some fierce debates, the public held a skeptical opinion towards the questions: How can the luxury companies maintain their positions? Why didn’t they strike down by financial crisis?

This expansion demonstrates how the luxury industry is now run by massive corporations whose focus is only on growth, visibility, brand awareness, advertising, and most importantly, PROFITS! With growth and expansion, has come a decrease in quality and rarity. The luxury garments produced are mostly not handmade but are even outsourced to large factories in places such as China and Turkey. Also, to meet quarterly turnover projections, “designers churn(ed) out increasingly trendy collections of clothes, handbags, and shoes.” (Thomas, Pg. 246) With hundreds of new stores around the globe the surplus of designer labeled merchandise is immense hence, the proliferation of outlet malls.

Key managers that can run each business independently but with a group vision are also part of the equation. Additionally the luxury industry is strongly dependent on tourism which is influenced by economy trends. The 9-11 events and the global economy slowdown have had a great impact on the industry. Finally huge investments were done to win strategic position, having an important impact on revenues. Appendix 5 is an example of the proportion of cost and impact on revenues and the stock performance.

Financial Management is a critical aspect of any business in order to achieve a sustainable and efficient cash flow. It is essential in maintaining the link between a business’s future financial goals (profit maximization) and the resources that it has in order to achieve its objectives. Businesses demand certain common goals that increase a bussiness's all around achievement, Some of which involve; growth amongst assests, An increase in efficiency in all areas of the business whether it be management or not. And the ability to meet short term and long term debts. Finacial management undertakes the responsibility to implement and acheive these goals for the business using a range of strategies shaped to meet the needs of the business and

The core value unit that luxury retailers designed their businesses around isn't a car anymore - it is seamlessness, convenience, speed and quality of personal service. In both short-run and long-run, the great amount of inputs for luxury-feeling grabs martial, human and time resources from the core of cars industry, technologies development.

Finally, in order to complete a more accurate comparison between the two projects, we utilized the EANPV as the deciding factor. Under current accepted financial practice, NPV is generally considered the most accurate method of predicting the performance of a potential project. The duration of the projects is different, one lasts four years and one lasts six years. To account for the variation in time frames for the projects and to further refine our selection we calculated the EANPV to compare performance on a yearly basis.

The overall sales of luxury goods in the year 2009 is expected to be more than US$150 billion and Asia contributes 10% to it. The concept of luxury is now not confined to only to Europe and US, the Asian subcontinent contributes majorly to it, with India and China as the newly emerging markets. Professor James Twitchell (2002) comments on the democratization of luxury and the changing consumer psychology These new customers for luxury are younger than clients of the old luxe used to be, they are far more numerous, they make their money far sooner, and they are far more flexible in financing and fickle in choice. They do not

Concerning the home demand, Luxury goods such as perfumes and cosmetics, the sales keep their growth until 1989. After this period, the consumption has decreased because the demand has become more sophisticated and restrained.

One main instance of iconic items consists of the Murakami-designed luxury handbags. These iconic items are certainly real masterworks that can be placed at the extremely top of the foremost dimensions of luxury. The underlying principle of Louis Vuitton behind the design of iconic items is to demonstrate its superiority and to improve images of its products in Hungary as well, which must also increase perceptions of customer about the other goods they provide. Furthermore, the unmatched strategy of pricing marks Louis Vuitton less manageable and induces relations of rarity. Consequently, in case of operations of Louis Vuitton in Hungary, it is cautious not to danger its brand image with money deductions, but they should adapt to the given market situation of the country in order to reach success. Brands like Louis Vuitton can even upsurge “symbolic benefits” with this extravagance strategy of pricing, as revealed by the price inconsistency, which encompass the subsequent trend: “In contrast to mass-market products, a price reduction of luxury products in the long-run usually leads to decreasing and otherwise a price increase to growing demand” (Charlesworth, 2003). Also, Louis Vuitton raises prices incessantly year after year with the intention of increasing requirement. Luxury brands like Louis Vuitton take advantage of the “Veblen

Currently, luxury product can be found everywhere and the demand of them is high (Kapferer and Bastien, 2008: 311). Each company wants its products to be