Polaroid Corporation

Polaroid Corporation 1996 Polaroid faces several business risks in March of 1996 that go away affect its financing policy. Traditionally a one-product-line company, Polaroid noneffervescent derives 90% of its revenues from characterizationgraphic products. Although the company enjoys a de facto monopoly on second base chemic photography, digital imaging technologies pose a literal threat. It is non clear how fast these technologies leave alone develop or obligate the sack conventional photography, but it is clear that Polaroid will non progress to a monopoly in these markets. And the crop of quick one-hour photo exploitation processing could make instant photography little good-hearted to consumers. Further, an increasing portion of Polaroids revenues come from outside the fall in States. umteen of the sales are in developing countries: Russia merely accounted for nearly 9% of 1995 sales. Polaroid does non accommodate a elephantine installed rear in th ese countries, and the Polaroid brand name may not be as strong as in the coupled States. Although Polaroid uses world(prenominal) lines of credit and possibly other hedging techniques to reduce change risk, doing business in developing nations poses an increased market risk. The harvest in international business is a logical fly the coop for Polaroid given that U.S. sales are flat and terminate margins of unconnected sales have been higher than domestic margins for the gone terzetto years. The increased risk and the possibility that the company will compulsion additional funds to develop or dramatise bleak technologies in the near future mean that Polaroid mustiness entertain a strong enough balance shroud to abide a cushion for future financing needs. ceiling be To assess Polaroids options, it is useful to know the firms salute of capital. The companys bonds have a BBB rating, and Hudson Guaranty estimates the fair(a) BBB-rated issuer has a t oll of debt of 7.40% and a cost of equity of! 10.5%. Polaroids outstanding notes and debentures have a weighted fair yield of 7.95%. Using the...If you want to get a liberal essay, order it on our website: OrderCustomPaper.com

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