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5 pages/≈1375 words
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APA
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Literature & Language
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Essay
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English (U.S.)
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Topic:

Borders Group, Inc

Essay Instructions:
The background readings of this Module provide plenty of information regarding both the issue of the capital structure decision and the concept of the weighted average cost of capital. Consider three companies: Borders(http://www(dot)borders(dot)com/online/store/PartnerSiteInvestorsView), Clorox(http://investors(dot)thecloroxcompany(dot)com/), and Amazon(http://phx(dot)corporate-ir(dot)net/phoenix.zhtml?c=97664&p=irol-irhome). Reflect on the nature of the business of these three companies. You are recommended to also get to the web site of one company in each of these categories. You might also check what the beta of each of these companies is. Based on the readings of the Module, and upon reviewing the nature of the operations of the companies including the nature of their customers and products, what would you recommend should the capital structure (total liabilities or debt and equity proportions) be for each of the three companies? Note that you are not asked to provide specific numbers, just 'low debt ratio', 'medium debt ratio' or 'high debt ratio'. (Do not quote the actual company's capital structure or their debt-to-equity ratios as per their balance sheet.) Write a five page paper explaining your recommendations for each of these three companies. Consider the nature of their business, the riskiness of the company, and the advantages and disadvantages of debt over equity financing in your answers. Case Assignment Expectations In the grading of your assignment, you will be assessed on the following items: 1. The use of multiple references beyond just the links mentioned above. Those links are just to get you started, but your ability to do your own research beyond these two articles will be assessed. 2. Your ability to focus the paper from beginning to end on the precise assignment questions. Remember that the assignment question is not to provide the firm's actual capital structure, but rather your recommendation as to whether or not the firm should have a high, medium, or low debt ratio. 3. Your paper should be at least five pages in lengths. 4. Your paper should include proper referencing, both with a bibliography and references within your text.These references should direct support your answers to the four main assignment questions.
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Introduction
Borders Group, Inc
Borders Group, Inc is a public company which was founded in 1971 and is a global retailer of books, music, movies and stationery materials; it trades on the New York Exchange under the symbol BCG. The headquarters is in Ann Arbor, Michigan with consolidated sales of $3.2 billion in 2008. Waldenbooks Specialty Retail segment operates small formats stores in outlet malls and airports to provide them with hard covers, paperback bestsellers and periodicals in the selection of other titles. The company international stores operate Borders superstores in Puerto Rico in designs and retails stationery (cards and gifts) in United Kingdom (Pederson 2006). Borders Group, Inc promised to open 25 seasonal Borders Express stores during the holidays in US. Borders Group, Inc. had plans which were calculated by Capital IQ which was to report the Fiscal Year 2011 results on March 31, 2011.
Employees have the following benefits in the company medical care, basic life insurance, workers compensation, long term and short term disability. Also paid time off benefits which includes vacation, personal days and paid holidays are included in each fiscal year.
They have extended their assets by lending facilities after paying back their loan and the lending group and loan investors who have help them in its capital for the four next years to come. Border Company had the following challenges which affected their business: decrease in sales, loss of market share and shrinking margins. Soft economy has led to pressure on pricing and reorienting customers to be value-focused in arts. Borders challenges were to be solved by engaging customers to the company strategy through changing the company’s brand and updating business model. Borders company had the following key objectives: to improve the in-store experience and increasing customer’s transformation, reinventing customer’s loyal program and enhancing community education and powers of social media (Plunkett 2007). Lastly is maximizing the digital activities and establishing business partnerships. Business models changed to a merchandise mix which has involved more customers and concerned with non-book items to complement on core assortment and for growth. In-store experience have managed to go behind cafes and installed free Wi-Fi in the last Quarter which has also enabled traffic and time in stores. The in-store Guarantee program that enabled customers to get an item not in stock by accessing it on borders.com and it shipped free of charge.
Clorox Company
Clorox Company is a manufacturer and marketer of consumers’ products. Clorox is committed in making a difference in the community of its employees work and live. It manufactures products and markets them in more than 100 countries. Clorox beliefs in doing things in the right way as it are in the code of conduc...
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