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Current trends of african american families
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Radio One, Inc.
Acquiring 12 new stations will give Radio One an even broader national presence in a market that has a high growth potential. The population growth rate as well as the income rate are increasing at a much faster rate for African Americans than for any other ethnic group within the U.S. An opportunity for the Radio Industry is the deregulations that have taken effect through the Telecommunications Act of 1996. Companies can now grow exponentially because they are able to consolidate and take advantage of operating efficiencies and synergies.
Technology is evolving at an ever faster rate, so radios could become obsolete at some point. Deregulation can be reversed with a new political administration. With 2000 being an election
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Their plan is to acquire 12 new radio stations from its direct competitors, meaning a 36% increase of their total number of stations. Such a big increase could destabilize the way Radio One operates. The synergies, if not well implemented could threaten the entire company and its culture. Radio One has to take into account the fact that their centralized finance, legal, HR, IT, and overall program management could be problematic if the company acquires all the stations. As we know the deal stipulates that the new radio stations will be sold without any working capital, therefore the increase in costs generated from the deal could put the company in jeopardy if the cash flows are not generating money fast enough after the acquisition. Also, the financing costs and agreements that Radio One beneficiates as of right now could change if the acquisition goes through because the structure of the company would become much different. After the acquisition, the company size will increase tremendously; therefore, their cost of borrowing could increase if they are perceived as a riskier company. Usually though, bigger companies tend to borrow at cheaper …show more content…
First, the revenue growth used in the case appears slightly optimistic. Therefore, looking at the yearly growth in population (1.4%), as well as the growth in income (1.3%), and the growth share of ad spending (less than 1% on average over the last 10 years); we believe that the real growth rate of revenue for the acquisition should be closer to 8%. Since 1997 they have had negative earnings; therefore, the company has unused tax benefit that they can take advantage of. However, we have used statutory rate because we believe that over the long run they’ll become profitable and use up their tax benefit. The risk free rate that we used for our valuation is 6.35% which was 30-year treasury in 1999. We chose it because we are valuing the acquisition at perpetuity and the 30-year treasury best matches with this time period. For the debt portion we are going to issue 10-year corporate bond which has the rating of AA and yield of 7.18%. In order to find the discount rate or WACC to use in our DCF analysis we assumed market premium of 7% because it is the long-term premium that the market returned
Of particular importance is the deregulation of the telecommunications industry as mentioned in the act (“Implementation of the Telecommunications Act,” NTLA). This reflects a new thinking that service providers should not be limited by artificial and now antique regulatory categories but should be permitted to compete with each other in a robust marketplace that contains many diverse participants. Moreover the Act is evidence of governmental commitment to make sure that all citizens have access to advanced communication services at affordable prices through its “universal service” provisions even as competitive markets for the telecommunications industry expand. Prior to passage of this new Act, U.S. federal and state laws and a judicially established consent decree allowed some competition for certain services, most notably among long distance carriers. Universal service for basic telephony was a national objective, but one developed and shaped through federal and state regulations and case law (“Telecommunications Act of 1996,” Technology Law). The goal of universal service was referred to only in general terms in the Communications Act of 1934, the nation's basic telecommunications statute. The Telecommunications Act of 1996 among other things: (i) opens up competition by local telephone companies, long distance providers, and cable companies ...
-The American people were hungry for new music, so they accepted the independent stations of the majors.
Good morning, Sioux City. This is Adam Lewis and you are tuned to KL&R on this delightful March 3rd for all your news so you’ll know what’s going on.
Based on the information in the case, Pepsi could invest US$360 million in exchange for 30% equity of Deltex. So we have to calculate the value of 30% equity of Deltex. First, we calculated the discount factor by using average unlevered beta of US independent bottlers, US 10 year Treasury bond as risk free rate and assuming market risk premium 10%. We came up with 9.83% of WACC. Next, we calculated Deltex free cash flow and terminal value and then converted them into US dollar value. Now with WACC and total cash flow, we had NPV of the company. So we deducted current debt from NPV and came up with the value of US$360M investment equal to 59.99% of Deltex equity. So the proposal to buy 30% of Deltex with US$360M is too expensive to PepsiCo and not attractive to PepsiCo.
DuPont has been known for its low reliance on borrowings. In the 1970’s, the company had to assume a substantial portion of debt of Conoco, a newly acquired company. In 1983, the managers have to decide about the future optimal target debt ratio. Should the company continue to keep about 40% of its assets financed via debt or should it strive to lower its borrowings to 25%?
The 1920's brought many advancements in technology which allowed Americans to entertain themselves at home; the radio was one of them. The radio was actually developed before the 1920's; however, it was banned during World War I and allowed to reappear after the Prohibition ended in 1919 (Events 72). After the Prohibition ended, and radio broadcasting was being brought back to life, many people started up their first stations, like Frank Conrad (Events 72). Frank Conrad's first broadcast consisted of the Presidential Election results (Events 72). As Conrad was one of the first people to broadcast, KDKA was one of the first radio stations to appear in the Unite...
The second method we used to analyze the firm’s value was the Comparable Companies Method. We used the historical figures as of 1990 and Goldmans Sach’s Projections. With an average of 22.
Buying the same stuff, listening to the same music, and even using the same slang terms. Many people across the United States and even across the world were becoming more and more similar in the way they talked and the purchases they made. This could partially be accredited to the radio. This simple device was revolutionizing the nation’s economy. The value of radio sales in the U.S. jumped from $60 million in 1922 to almost $850 million in 1929. Popular network programs such as “Amos ‘n’ Andy” and “the Philco hour” provided an effective ...
Before 1923 the only means of reaching a immense audience was through newspapers or word-of-mouth. With the new technology of radio broadcasting in 1923, it was possible to reach the vast majority of the United States’ population. On July 1, 1923 AT&T established the first permanent radio network, WEAF NY and WMAF Mass, that linked broadcasting stations (White). The first radio station to air was 3AR and it started transmitting music, news, and race results. In December of 1923 President Calvin Coolidge made the first presidential address on radio.
We employed the internal rate of return analysis to evaluate the each alternative. If taking the Goldman’s swap solution, Disney’s borrowing cost would be 7.004% in Yen (9.979% in dollar). If adopting the 10-year term loan, the total effective cost would be 7.748% in Yen (10.694% in dollar). Furthermore, by these data we also determined the total expected future revenue under different assumption of the growth rate and found it could cover all the future interest expense in the following ten years
Wireless communication across the country was something no one ever imagined. The creating of the commercial radio in 1920, created a feeling of belonging to many citizens of the United States. Starting off as a hobby for amateurs, radio quickly expanded. With the creation of NBC, and emerging radio stars like Ernie Hare and Billy Jones radio, families tuned in on a daily basis. Music was brought to lower income families who couldn’t afford to buy a piano. As well as streaming music, radio provided advertising outlets. Promotions regarding cigarettes, automobiles, and soap
Satellite radio is a technology that provides a radically new way to listen to radio. XM’s service makes use of advanced satellite capabilities and elaborates terrestrial receiver architecture to deliver a wide array of high quality radio programming nationwide. In early 1998, Robert Acker, director of strategic planning at XM, needs to develop a marketing strategy for this new radio service. There are several decisions that need to be made by the company in order to finalize the business plan. At fist XM needs to decide which of two business models to pursue, whether emphasis should be placed on charging customers a monthly subscription fee, or whether to rely more on earning revenue through advertising. In addressing this problem, management must consider the value that XM radio could propose for different consumer segments as compared with existing modes of radio (AM, FM) and in relation to its sole competitor in satellite radio – SIRIUS. Besides choosing a business model there is also a need to explore how best to approach and leverage manufacturer and channel partners, considering high unknown and high-risk technology. The purpose of this report is to analyze possibilities and outline possible recommendation on strategies for XM Radio. The following areas will be examined:
American life was much different with radios starting to become popular and the creations of “talkies”. Radios started to become popular “13,750,000 American households had radios a figure that more than doubled in 1939” (1930s). Most people used it as entertainment and a way to get news in the house without news papers...
Given the amount of complaints filed by many Sirius XM consumers, it is fair to state that a majority, if not all, affected subscribers agree that Sirius XM’s actions fell under the umbrella of consumer fraud. Subscribers would also agree that the company’s actions were unethical, given the fact that they knowingly embezzled $3.8 billion from their customers (Hood, 2014). As for Sirius XM’s perspective, they knew their business practices were wrong, yet they continued to short their customers anyways. In cases where businesses commit consumer fraud, they often believe that it is worth shortening their customers in order to gain additional profit (Jacoby & Meyers, n.d.). This was exactly the case for Sirius XM. Rather than focusing on how they were harming their customers through the use of consumer fraud, the satellite-radio company realized how much additional profit they could potentially make. Even if Sirius XM attempted to argue that they did not know they were committing consumer fraud, it would be known that the company was lying. As any business, let alone a very large and well-known business, it would be very hard to embezzle billions of dollars from consumers without the workers of the company or the company as a whole knowing. With the amount of Sirius XM workers responsible for the company’s accounting, it is almost impossible that over 3 billion dollars was unknowingly gained as profit. Sirius XM obviously knew and planned to embezzle this money from their subscribers, regardless of whether they admitted their wrongs or attempted to claim the embezzlement was an accident. Due to the fact that Sirius XM purposefully committed this illegal crime and victimized their own consumers, it can easily be concluded that their actions were without a doubt
Impact of the Radio The invention of the radio had an immense impact, revolutionizing the unity of society. “I live in a strictly rural community, and people here speak of ‘The Radio’ in the large sense, with an over-meaning,” said E.B. White in 1933. “When they say ‘The Radio’ they don’t mean a cabinet, an electrical phenomenon, or a man in a studio, they refer to a pervading and somewhat godlike presence which has come into their lives and homes” (Lewis). The radio became a mighty weapon whose power involved spreading ideas to millions of listeners, who may otherwise never have heard those inspirational messages. Religious fanatics used to stand at the back of churches shouting radical nonsense, while others would ignore it.