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 lock away derives 90% of its revenues from picture showgraphic products. Although the company enjoys a de facto monopoly on arcsecond chemic photography, digital imaging technologies pose a tangible threat. It is non clear how fast these technologies testament develop or put on 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 little good-hearted to consumers. Further, an increasing portion of Polaroids revenues come from outside the coupled States. umteen of the sales are in developing countries: Russia wholly accounted for nearly 9% of 1995 sales. Polaroid does not feed a pear-shaped installed rear in these countries, and the P olaroid brand name may not be as strong as in the fall in States. Although Polaroid uses world(prenominal) lines of credit and possibly other hedging techniques to reduce hard cash risk, doing business in developing nations poses an increased market risk. The egression in international business is a logical cut down the coop for Polaroid given that U.S.

sales are flat and lolly margins of unconnected sales have been higher than domestic margins for the aside terzetto years. The increased risk and the possibility that the company will compulsion additional funds to develop or maturate bleak techn ologies in the near future mean that Polaroi! d must(prenominal) entertain a strong enough balance flat solid to abide a cushion for future financing needs. slap-up 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 comprise of debt of 7.40% and a cost of equity of 10.5%. Polaroids outstanding notes and debentures have a weighted fair(a) yield of 7.95%. Using the...If you want to get a handsome essay, order it on our website: OrderCustomPaper.com

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