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 motion littleness derives 90% of its revenues from moving-picture showgraphic products. Although the company enjoys a de facto monopoly on heartbeat chemic photography, digital imaging technologies pose a solid threat. It is non clear how fast these technologies pass on develop or exit 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 less good-hearted to consumers. Further, an increasing portion of Polaroids revenues come from outside the joined States. umteen of the sales are in developing countries: Russia solely accounted for nearly 9% of 1995 sales. Polaroid does non postulate a swelled installed rear in these countries, and the Polaroid brand name may not be as strong as in the get together States. Although Polaroid uses world(prenominal) lines of credit and possibly other hedging techniques to reduce capital risk, doing business in developing nations poses an increased market risk. The egress in international business is a logical zap the coop for Polaroid given that U.S.

sales are flat and realise margins of unconnected sales have been higher than domestic margins for the historical terzetto years. The increased risk and the possibility that the company will compulsion additional funds to develop or modernise ble ak technologies in the near future mean that! Polaroid must(prenominal) entertain a strong enough balance tatter to abide a cushion for future financing needs. cracking 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 speak to of debt of 7.40% and a cost of equity of 10.5%. Polaroids outstanding notes and debentures have a weighted come yield of 7.95%. Using the...If you want to get a unstinting essay, order it on our website: OrderCustomPaper.com

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