Business Finance Homework Help

want someone to rewrite these papers in new different words so I don’t get detected or get a plagiarism

I have two different ones each are 2 pages and I want each of them in a individual documents

1- Dozier Industries (A) & (B)

With the results of going international, Dozier Industries faces multiple problems regard-ing the loss of potential revenue from currency risk. In order to help minimize risk, Rothschild the CFO was advised to take an option hedged action. This will minimize risk involved with the payout in the foreign currency. Currently Dozier’s new project will bring in 1,175,000Pounds which must be converted into U.S. dollars. This money will be paid in installments and the first installment of 10% of the contract 117,500Pounds was paid upfront. The second installment will not be paid until after the project it compete. Inflation in the dollar/pound has severe implicationsfor the profit of the project. Dozier now has two different options to choose from in order to min-imize risk/loss. The first would be to an option hedge and the second would be a forward hedge.The option hedge can be decided between a put option or a call option. Both will start with the purchase of 84 option contracts adding up to around 1,050,000Pounds. This would leaveonly 7,500 fully exposed to the exchange rate volatility. The put option will begin differently from the call option and will start with taking a put option contract, by then selling these options for $1.45/Pounds and of course adding a premium. With the put contract, Dozier is anticipating the falling of the British Pound. If the Pound does fall, Dozier will have successfully hedged compared to if the Pound was to increase, then Dozier will realist in a loss and the hedging would of been pointless. As for the Call Option, this would essentially be the opposite of the put contract and you would be buying options at a set amount and Dozier would be relying on the British Pound to increase. However if it doesn’t and depreciates then Dozier will loss more
money then good. After looking at the trends throughout the exchange rates, the trends suggest the Pound could continue to appreciate which would recommend Dozier to take a call option.The future hedge or contract will result in the creating of a 90day forward contract to sell Pounds at the forward rate of $1.4198/Pounds. This strategy however has more losses compared to the options method but can return a larger profit as well. Dozier should consider this future contract only ifDozier fears that doing nothing with their current current will result in a loss.The profit is calculated by adding the total receivable at the forward rate and the future value of the 10% deposit on the contract received. This may result in a small advantage but will do the job of protecting Dozier’s money.The final decision should fall onto the analysis of Dozier’s current situation and future path of the $/Pound currency rates. Looking into the future rates we can see that it would be the smartest move to engage in a forward contract. This could lead Dozier into a complete major lossof profit but ensures a positive profit margin in the end.

2- Bidding for Hertz

: Leveraged Buyout Strategy PaperCarlyle Group and its partners need to make a decision about the final terms of abid to purchase the Hertz Corporation. Hertz Corporation is exclusively owned by theFord Motor Company. Hertz was up for sale in June 2005 and in order to initiate“consideration of strategic alternatives” Ford entered a dual­track process. This meansthey needed to pursue an initial public offering and a private auction simultaneously. Theadvantage to the Ford Motor Company entering a dual­track process would affect thebidding process. The price obtained by the seller can be maximized due to competitivepressure of a viable IPO process that can push bidders to put more money on the table. Itcan also give the seller substantial negotiating leverage over deal terms in a private sale.It allows a seller to keep its options open until it becomes clear which route will yield thehighest value, thus preserving flexibility and hedging against deal uncertainty; while adual-track approach magnifies the cost, complexity and management distraction inherentin any sale process, it may also enjoy useful synergies by providing to a seller acomparable information about value of the selling company. The seller can judge aboutfair ask price of its company based on due diligence of bidders.The Bidding Groupprepared pro forma projections. Strong, predictable operating cash flows with which theleveraged company can service and pay down acquisition debt, and a clean balance sheetwith relatively little debt should be considered by the Bidding Group so that they canmake a potential LBO candidate an ideal target.
Considering some of the criteria listed above we can say that Hertz is not an idealcandidate for an LBO. Its financial leverage is approximately 62% (pre-LBO), CAPEXare relatively high, management practice hands-off management style etc. But the group’sconsultants believed it to be an attractive LBO candidate. The most important factor forthe group is opportunity of enhancing the value of the acquired business by potentialexpansion, restructuring and operational improvement.First of all, the group assessed the value-creating opportunities by operationalimprovements by decreasing expenses. The second step was assessing the financialvalue-creating opportunities. As part of LBO financing, the group was considering usingdebt that could be backed by Hertz’s fleet (asset backed securities), which by contrastwith unsecured financing is less expensive. Also the potential source of financial valuewas the separation of Hertz two business segments in 2 legal entities RAC and HERC inorder to generate more liquidity. Another reason for separation is that ABS financingmight facilitate separate disposal of the Hertz properties. The valuation of Hertz was donewith consideration of separation in 2 entities. I calculated the future enterprise value bythe end of 2010 using projected balance sheet, cash flow statement, income statement andEnterprise Value/LTM peer multiple. The calculation of the future enterprise value wasmade under very important assumption that peer’s multiple would be the same after 5years and projected financial data are accurate. My analysis revealed that Return on $2.3billion investment in equity will result in annual compound return rate of 21,12%. IfCarlyle desires a 20% target rate of return on its equity investment, my analysis suggeststhat Carlyle can pay in total $2409 million for the Hertz.