4 discussion problems, need 170 words for each
Discussion 4-1(need 170 words. Also, provide a real world example in discussion)
Felicia & Fred are considering the introduction of a new product line of jewelry featuring crystals imported from the Czech Republic. The manufacturing plant offers crystals in all colors, sizes, and shapes cut to the design specifications of their customers. Further, quality is comparable or better than domestically sourced product. Current pricing is €90.00 per kilogram, which includes shipping, insurance and any duties required for the product to reach its destination. Delivery would take place in three months and be based on the present currency exchange rate; the purchase requirement for production is estimated to be 50,000 kilograms. Felicia & Fred’s designers and product engineers have determined that the price is quite competitive given a quote of $125 per kilogram from a manufacturing plant in Seattle, WA. However, you have acknowledged that this will be contingent on the exchange rate between the euro and the U.S. dollar when the purchase is initiated, as per contract. After obtaining the present exchange rate on the euro, determine whether Felicia & Fred should source the crystals domestically or internationally. Support your answer with a calculation and provide the date upon which you sourced the euro exchange rate. To further support your response, include one qualitative consideration with your decision.
Discussion 5-1(need 170 words. Also, provide a real world example in discussion)
Now that the board members of Felicia & Fred are planning to implement a new crystal jewelry product line, they are concerned about potential shareholder sentiment regarding the dilution of ownership interest. As a result of this, the board is giving consideration to a significant change in capital structure in order to raise the cash required to fund the project. This would change the current capital structure from 30% debt and 70% equity to 70% debt and 30% equity. Although shareholder sentiment may be appeased by this approach, discuss the following considerations that may emerge as a result of this drastic change in capital structure from a qualitative perspective:
What is the likely effect on the weighted average cost of capital?
What might be the impact on firm risk, and the perception of the firm’s credit rating? In your response, briefly discuss credit rating agencies and their approach in determining the credit rating itself. What are the key factors of consideration in assignment of the rating?
Discussion 4-2 (need 170 words)
What are the benefits and drawbacks of the top-down analysis approach? What are the benefits and drawbacks of the bottom-up analysis approach? Give an example of when it would be best to use each of these approaches. Explain why you would choose one particular approach for each example.
Discussion 5-2 (need 170 words)
This article (https://www.thebalance.com/the-stock-market-is-not-the-economy-3141204) describes the relationship between investor confidence and market performance. Describe how the analysis considers how market performance affects investor confidence, and vice versa. Do you believe that the market responds to rises and falls in investor confidence?