25.6% | Next we had to find appropriate values for Beta D and Beta E. For Beta D‚ we assumed that Ameritrade holds a Corporate A debt rating for their bonds which is 0.21 (Journal of Financial Economics‚ July 1963-December 1991). After this‚ the BE (PROJECT) needed to be computed. Charles Schwab and Quick & Reilly were used as comparable for determining the BE (company) for TD Ameritrade. After running a Regression in Excel‚ it was determined that both Charles Schwab and Quick & Reilly
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Executive Summary: In mid-1997 Joe Ricketts the Chairman and CEO of Ameritrade‚ decided that Ameritrade’s new mission would be to become “the largest brokerage firm worldwide based on the number of trades.” In order to accomplish this mission Ameritrade would need to invest significantly in technology and advertising. This strategy would require large expenditures relative to Ameritrade’s existing capital. In order to gauge the financial impact of these large expenditures‚ there needed to be
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Cost of Capital at Ameritrade 1) Briefly describe the project that Ameritrade is considering In order to maintain its competitive edge in the discount brokerage market‚ Ameritrade is considering making major investment state of the art technology that can prevent system outages and guarantee 100% reliability. The new system would enable Ameritrade to follow its mission of becoming the largest brokerage firm based on the number of trades. As part of the project the firm would also invest in a new
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Ameritrade Cost of Capital FIN 700 11/14/06 Cohort B-Team 3 Introduction Ameritrade CEO Joe Ricketts contracted our firm‚ B3 Investment Consultants‚ to provide quantitative analysis of a prospective project – entering the deep discount brokerage market. Based on the directives given by Mr. Ricketts‚ the primary focus of our analysis has been to derive an accurate estimate of the weighted average cost of capital (WACC) for this
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Ameritrade Case Writeup questions (do all this as if it is June 1997‚ date of the case): 1. What is Ameritrade’s capital structure? Because there is no preferred stock or long term debt‚ Ameritrade is a 100% equity firm. 2. What is Ameritrade’s cost of equity capital? CAPM= (.0643)+ (1.8264)(.188-.0559)=.2902=29.02% Return on Market=(899.470-757.12)/757.12=.188 Beta calculation on Attached Excel Spreadsheet. 3. What is Ameritrade’s cost of debt capital? Because there is
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Cost of Capital at Ameritrade Christoph Schneider Ross School of Business Basic assumptions Tax Rate Beta Debt Leverage (D/V) Leverage (D/E) 1997 35.5% 0.25 0.00 0.00 1996 39.4% 1995 35.1% Average 36.7% Comparable companies’ βE Tax Rate Beta Debt Leverage (D/V) Leverage (D/E) Discount Brokerage Firms Charles Schwab Quick & Reilly Waterhouse Securities 1997 35.5% 1996 39.4% β E from Jan’92-Dec’96 2.30 2.20 β E from all months 2.35 2.30
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Ameritrade 2010 1. Qué es Ameritrade y a qué se dedica? Ameritrade Holding Corporation es un bróker de altos descuentos fundado en 1997 cuyos ingresos están relacionados de manera directa al mercado bursátil‚ sus dos principales fuentes de ingreso son: Transacciones e intereses netos. 2. Resuma la posición financiera de Ameritrade al momento. Al año 1997 sus ingresos provienen: 67% = Transacciones bursátiles 33% = Ganancia y otros valores cobrados
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Professor Coyle Auditing-Case Write Up 30 September 2014 The Leslie Fay Companies Case Summary The Leslie Fay Companies is a women’s apparel manufacturer headquartered in New York‚ but with its accounting offices located in Pennsylvania. The company performed business in a way that did not utilize modern computerized systems to track sales and growth‚ but in an old-fashioned way that yet‚ still let them perform well in their revenues and earnings. The major names in this case include the CEO of Leslie
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Ameritrade – case study Executive Summary Ameritrade provides online brokerage services and operates an Internet-based financial management services business. 90% of the company’s revenues are from the provision of discount brokerage services. The company’s objective is to improve its competitive position in deep-discount brokerage. In order to achieve this objective‚ the company must grow its customer base‚ requiring an investment of $100 million to upgrade its technological capabilities as well
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SWECO‚ Inc. Case Write-Up SWECO is in the precision machinery industry‚ products include Process Equipments‚ such as separator(sold internationally to many industries)‚ replacement parts and screens‚ grinding mills‚ finishing equipments‚ and centrifugal wastewater concentrator. SWECO’s success factors are: technology lead‚ dominating the fine-screen manufacturing market(other suppliers cannot provide with the same high quality); Good reputation‚ with many existing customers worldwide; follow-on
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