success of CPK (p.3-4) Anticipated effect of changing the capital structure on return on equity (p.4) Anticipated effect of changing the capital structure on cost of capital (p.5) Expected number of shares of CPK that can be repurchased (p.6-7) Anticipated effect of changing the capital structure on CPKs stock price (p.6-7) Our recommendation (p.7) In order to explore whether or not California Pizza Kitchen should change their capital structure‚ we must first look at the brief history of the firm to
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Executive Summary California Pizza Kitchen (CPK) was founded in 1985 by Larry Flax and Rick Rosenfield with a vision of offering customers designer pizza at reasonable prices. CPK’s target market is geared towards affluent customers making $75‚000 annually‚ and over the span of 2 decades the business was able to grow from a single location into 213 locations across 28 states and 6 foreign countries. CPK generates revenue from 3 main sources: company restaurants‚ franchises‚ and royalties. CPK stands
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THE SANITATION PRACTICES IN THE DINING AREA OF CALIFORNIA PIZZA KITCHEN RESTAURANT: AN ASSESSMENT A Thesis Proposal Submitted to the College of International Hospitality Management San Sebastian College – Recoletos In Partial Fulfillment of the Requirements For the Degree of Bachelor of Science in Hotel and Restaurant Management Ralph Ryan D. Vergara Gil Louie B. Baldecir Roxlee S. Parreño Jean Ludwinson Lapuz September 22‚ 2011 CHAPTER 1 THE PROBLEM AND ITS BACKGROUND
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Report on Case analysis of California Pizza Kitchen Course (506): Cases in Financial Decision Making SUBMITTED TO: Dr. M. Sadiqul Islam Professor Department of Finance University of Dhaka SUBMITTED BY: Group 21 MBA 16th Batch Department of Finance University of Dhaka Date of Submission April 08‚ 2015 Group No: 21 Serial Name BBA ID MBA ID 1 Farhana Bondhon 16-004 16-615 2 Farha Farzana 16-006 16- 727 3 Marufa Akhter 16-132 16- 657 Letter of Transmittal April 08‚ 2015 Dr. M. Sadiqul
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CHAPTER 13 CAPITAL STRUCTURE AND LEVERAGE (Difficulty: E = Easy‚ M = Medium‚ and T = Tough) Multiple Choice: Conceptual Easy: Business risk Answer: c Diff: E [i]. A decrease in the debt ratio will generally have no effect on . a. Financial risk. b. Total risk. c. Business risk. d. Market risk. e. None of the above is correct. (It will affect each type of risk above.) Business risk Answer: d Diff: E [ii]. Business risk
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CALIFORNIA PIZZA KITCHEN The case we studied this time is CPK‚ which is a restaurant with creative menu‚ high quality of foods‚ nice dinning environment‚ good dinning atmosphere‚ convenient traffic location and etc. The case discussion this time was more focused on the numerical data instead of strategy analysis. Although it’s not so easy for me to catch up with all information that the present group show‚ I think it’s really interesting. The main problem we need to discuss is how to raise the declining
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CHAPTER 16 FINANCIAL LEVERAGE AND CAPITAL STRUCTURE POLICY Answers to Concepts Review and Critical Thinking Questions 1. Business risk is the equity risk arising from the nature of the firm’s operating activity‚ and is directly related to the systematic risk of the firm’s assets. Financial risk is the equity risk that is due entirely to the firm’s chosen capital structure. As financial leverage‚ or the use of debt financing‚ increases‚ so does financial risk and‚ hence‚ the overall
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INTRODUCTION The California Pizza Kitchen was founded in 1985 by attorneys Rick Rosenfield and Larry Flax. The two lawyers worked together to fulfill their desire to enter the restaurant business. They created innovative toppings for their menu with recipes such as the Jamaican Jerk Chicken and the Pear & Gorgonzola pizzas. According to their website‚ they operate “more than 250 CPKs in 32 states and nine foreign countries.” (California Pizza Kitchen‚ unk.) The company opened
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CHAPTER 13: CAPITAL STRUCTURE AND LEVERAGE 1. A firm’s business risk is largely determined by the financial characteristics of its industry‚ especially by the amount of debt the average firm in the industry uses. a. True b. False ANSWER: False 2. Financial risk refers to the extra risk borne by stockholders as a result of a firm’s use of debt as compared with their risk if the firm had used no debt. a. True b. False ANSWER: True 3. A firm’s capital structure does not affect its free cash
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Chpt.16 Financial Leverage and Capital Structure Financial Leverage Chapter Outline Financial Leverage Effect of leverage Break-even Analysis Homemade Leverage M&M Propositions (I & II): optimal D/E? No tax Corporate tax Corporate tax & bankruptcy costs Corporate & personal taxes Arbitrage The Capital-Structure Question and The Pie Model The value of a firm is defined to be the sum of the value of the firm’s debt and the firm’s equity. V=E+B If the goal of the management of the firm is
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