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 unbosom derives 90% of its revenues from imagegraphic products. Although the company enjoys a de facto monopoly on flashing chemic photography, digital imaging technologies pose a demonstrable threat. It is non clear how fast these technologies leave alone develop or take place the sack conventional photography, but it is clear that Polaroid will not progress to a monopoly in these markets. And the crop of quick one-hour photo exploitation processing could make instant photography less(prenominal) good-hearted to consumers. Further, an increasing portion of Polaroids revenues come from outside the unite States. umteen of the sales are in developing countries: Russia alone accounted for nearly 9% of 1995 sales. Polaroid does not consider a macro installed rear in these countries, and t he Polaroid brand name may not be as strong as in the joined States. Although Polaroid uses world(prenominal) lines of credit and possibly other hedging techniques to reduce property risk, doing business in developing nations poses an increased market risk. The offset in international business is a logical navigate the coop for Polaroid given that U.S.

sales are flat and assoil margins of unconnected sales have been higher than domestic margins for the medieval terzetto years. The increased risk and the possibility that the company will compulsion additional funds to develop or subscribe bleak te chnologies in the near future mean that Pola! roid mustiness entertain a strong enough balance airplane to abide a cushion for future financing needs. pileus 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 personify of debt of 7.40% and a cost of equity of 10.5%. Polaroids outstanding notes and debentures have a weighted bonny yield of 7.95%. Using the...If you want to get a bighearted essay, order it on our website: OrderCustomPaper.com

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