i need a 6-8 page paper..... please see the attached documents needed to complete the assignment . i would like an ORIGINAL paper. see instructions below.

Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center. Instructors, training on how to grade is within the Instructor Center.

Assignment 1: Galaxy Skis Due Week 10 and worth 400 points

Galaxy International is a small privately held company in the Northeast U.S. which manufactures high- tech carbon composite skis for the U.S. market. The company has been in business for 20 years, has 125 employees, and has $50 million in annual sales. Its owner, Jeremy Riven, is an ex-Olympic skier who developed the proprietary technology and bonding polymers that give Galaxy skis their unique flexibility, durability, and propensity to need low maintenance?all of which serious skiers in the U.S. have come to prize. Major costs involved in the manufacturing of skis are oil polymers, carbon fiber, and labor. Ski technicians are highly skilled machinists, and manufacturing the finished product is as much an art form as it is a science.

Jeremy has recently considered an initial public offering (IPO) to allow the firm to raise the funds it needs to go international. The underwriting group from Morgan Stanley believes they could easily raise sixty (60) million in the equity markets, and fifty (50) million in the bond market. Jeremy is trying to determine the cost of debt, the cost of equity (four [4] million shares at $15/share), and the firm?s weighted average cost of capital if he goes public and issues corporate bonds with a coupon rate of 8%. Last year, the firm resided in a 28% tax bracket. The risk-free rate in the U.S. is 2%, and the expected return on the market is 14%. Morgan Stanley estimates Galaxy?s beta, if traded publicly, would be approximately 1.8%. Galaxy has been growing at 15% a year since its inception.

Jeremy would like to expand his current U.S. facility from 40,000 square feet to 100,000 square feet, automate certain processes which heretofore have been done manually, and outsource work to China, where he plans to either build or lease a plant to extend his ski line worldwide. He could build a 50,000- square-foot facility in Canton for fifty (50) million dollars, or lease a similar facility for ten (10) million a year. Annual operating costs would be twenty (20) million dollars, and projected free cash flow, based on past experience, would be twelve (12) million a year (whether he leases or buys). The life of the plant would be fifteen (15) years, and inflation in China is currently running at 6% annually. Galaxy would repatriate profits from the Chinese operation and consolidate them with those of the U.S. operations. All expenses of operating the plant in China would be in Yuan. Use the Internet to locate information about current events in China related to its economic state.

Faculty Note:If you would like to substitute China with a different country to avoid plagiarism, please do so.

Write a six to eight (6-8) page paper in which you:

1. Examine the pros and cons of an IPO for Galaxy International. Recommend whether the company should or should not proceed with an IPO.
2. Evaluate the appropriateness of the financing alternatives and strategies that are available to Jeremy, and select the one (1) you believe best suits the company. Provide support for your rationale.
3. Determine the advantages of debt over equity, and what each would cost after taxes. Determine Galaxy?s weighted average cost of capital (WACC) if it uses both alternatives to raise capital (i.e., debt and equity).
4. Recommend one (1) financial instrument that Jeremy could use in order to ensure a stable supply of oil for his operations and to protect his firm from currency translation losses.
5. Suggest one (1) approach that Jeremy can use to hedge his currency translation and transaction exposure to the Yuan. Provide support for your suggestion.
6. Determine whether Jeremy should lease or buy the plant in China. Justify your position using information regarding the current economic state in China.
7. Imagine that you are a portfolio manager. Determine whether or not you would want to participate in the IPO if Galaxy International goes public. Provide a rationale for your decision. Determine the expected return on the stock using Capital Asset Pricing Model (CAPM).
8. Determine if the Galaxy International?s expected returns would exceed its WACC. Provide a rationale.
9. Use at least five (5) quality academic resources in this assignment.Note:Wikipedia and other Websites to not qualify as academic resources.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student?s name, the professor?s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Examine the concepts related to financial management and the financial environment.
• Evaluate different types of financing available in the marketplace and the related impact on firm value.
• Examine the various alternatives to managing and mitigating business and financial risk with the use of forwards, futures, swaps, and options.
• Evaluate how simulation and scenario analysis can be used to improve an organization?s forecasting ability,and reach an optimal financing mix through the use of these instruments
• Develop strategies to protect a firm from financial distress.
• Examine the tools and methods used for portfolio analysis.
• Use technology and information resources to research issues in corporate finance.
• Write clearly and concisely about corporate finance using proper writing mechanics.

Galaxy Writing Assignment Rubric Guidelines - the numbered guidelines below reference the specific assignment rubrics: 1. This rubric is self-explanatory. Your discussion should state the advantages and disadvantages of an IPO - specifically as it relates to Galaxy Skis. You should also make a recommendation for what decision Jeremy Riven should make, supported by a sound rational. 2. Again, this rubric is fairly straight-forward. The assignment describes the specific financing alternatives available to Galaxy, and you are to discuss the appropriateness of each of those alternatives and then recommend the best alternative, giving support for the recommendation. 3. This rubric requires you to discuss the advantages and disadvantages of using either debt or equity financing alone, and then calculate the cost of each. Then, you are to calculate the weighted average cost of capital (WACC) if both debt and equity are used. You are expected to show your calculations or spreadsheets, so students will often embed their Excel worksheets into the text. 4. This rubric is very clear. Galaxy relies heavily on polymer technology, so it is very important for them to have a stable supply of oil. You are to recommend one financial instrument that Riven could use to ensure a constant supply of oil as well as protecting the company from currency translation losses when procuring that supply. 5. Since Riven is looking to expand operations to China, you are to recommend a SPECIFIC approach the company should use to hedge its currency translation and transaction exposure to the yuan. You must include data and/or sufficient support for this recommendation. 6. This rubric requires that you analyze a number of factors such as China's economic conditions, real estate development laws and requirements, political restrictions, etc., before you begin your actual comparison of leasing versus buying. In order to complete this rubric correctly, you will analyze the data provided in the assignment regarding the costs associated with buying or leasing. The more successful past papers have included spreadsheet analyses of initial cost and expected cash flows for each alternative. This is the only way to make an accurate decision. 7. Rubric seven requires you to take all the data you have analyzed thus far and conclude whether or not Galaxy Skis would be a good investment. In order to do this, you will be required to determine the expected return on the stock using the Capital Asset Pricing Model (CAPM). 8. This section should be easy, since you have already determined the components of this rubric in your previous sections, so now you can present this conclusion along with your closing remarks. 9. This rubric is simply a restatement of the instructions I stated at the beginning of this email, and is self-explanatory. Only appropriate references will be accepted. If you have not read through the writing assignment for week ten, it is recommended that you do so as soon as possible so you can begin your research and preparatory work for this project. This is an important part of your grade, and you will only be given one chance to do a good job. Any paper that contains unauthorized, non-cited, or copied material will receive a zero, so please be very careful to use accepted methods of quoting and citing your data, charts and text. Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center. Instructors, training on how to grade is within the Instructor Center. Assignment 1: Galaxy Skis Due Week 10 and worth 400 points Galaxy International is a small privately held company in the Northeast U.S. which manufactures hightech carbon composite skis for the U.S. market. The company has been in business for 20 years, has 125 employees, and has $50 million in annual sales. Its owner, Jeremy Riven, is an ex-Olympic skier who developed the proprietary technology and bonding polymers that give Galaxy skis their unique flexibility, durability, and propensity to need low maintenanceall of which serious skiers in the U.S. have come to prize. Major costs involved in the manufacturing of skis are oil polymers, carbon fiber, and labor. Ski technicians are highly skilled machinists, and manufacturing the finished product is as much an art form as it is a science. Jeremy has recently considered an initial public offering (IPO) to allow the firm to raise the funds it needs to go international. The underwriting group from Morgan Stanley believes they could easily raise sixty (60) million in the equity markets, and fifty (50) million in the bond market. Jeremy is trying to determine the cost of debt, the cost of equity (four [4] million shares at $15/share), and the firm's weighted average cost of capital if he goes public and issues corporate bonds with a coupon rate of 8%. Last year, the firm resided in a 28% tax bracket. The risk-free rate in the U.S. is 2%, and the expected return on the market is 14%. Morgan Stanley estimates Galaxy's beta, if traded publicly, would be approximately 1.8%. Galaxy has been growing at 15% a year since its inception. 1. 2. 3. 4. 5. 6. 7. 8. Jeremy would like to expand his current U.S. facility from 40,000 square feet to 100,000 square feet, automate certain processes which heretofore have been done manually, and outsource work to China, where he plans to either build or lease a plant to extend his ski line worldwide. He could build a 50,000square-foot facility in Canton for fifty (50) million dollars, or lease a similar facility for ten (10) million a year. Annual operating costs would be twenty (20) million dollars, and projected free cash flow, based on past experience, would be twelve (12) million a year (whether he leases or buys). The life of the plant would be fifteen (15) years, and inflation in China is currently running at 6% annually. Galaxy would repatriate profits from the Chinese operation and consolidate them with those of the U.S. operations. All expenses of operating the plant in China would be in Yuan. Use the Internet to locate information about current events in China related to its economic state. Faculty Note: If you would like to substitute China with a different country to avoid plagiarism, please do so. Write a six to eight (6-8) page paper in which you: Examine the pros and cons of an IPO for Galaxy International. Recommend whether the company should or should not proceed with an IPO. Evaluate the appropriateness of the financing alternatives and strategies that are available to Jeremy, and select the one (1) you believe best suits the company. Provide support for your rationale. Determine the advantages of debt over equity, and what each would cost after taxes. Determine Galaxy's weighted average cost of capital (WACC) if it uses both alternatives to raise capital (i.e., debt and equity). Recommend one (1) financial instrument that Jeremy could use in order to ensure a stable supply of oil for his operations and to protect his firm from currency translation losses. Suggest one (1) approach that Jeremy can use to hedge his currency translation and transaction exposure to the Yuan. Provide support for your suggestion. Determine whether Jeremy should lease or buy the plant in China. Justify your position using information regarding the current economic state in China. Imagine that you are a portfolio manager. Determine whether or not you would want to participate in the IPO if Galaxy International goes public. Provide a rationale for your decision. Determine the expected return on the stock using Capital Asset Pricing Model (CAPM). Determine if the Galaxy International's expected returns would exceed its WACC. Provide a rationale. 9. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia and other Websites to not qualify as academic resources. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. The specific course learning outcomes associated with this assignment are: Examine the concepts related to financial management and the financial environment. Evaluate different types of financing available in the marketplace and the related impact on firm value. Examine the various alternatives to managing and mitigating business and financial risk with the use of forwards, futures, swaps, and options. Evaluate how simulation and scenario analysis can be used to improve an organization's forecasting ability, and reach an optimal financing mix through the use of these instruments Develop strategies to protect a firm from financial distress. Examine the tools and methods used for portfolio analysis. Use technology and information resources to research issues in corporate finance. Write clearly and concisely about corporate finance using proper writing mechanics. Weighted average cost of capital in word Cost of Debt a Coupon 8% rate b Tax rate 28% c = 1-b 1 - tax rate 72% d = a*c Cost of debt 5.76% Cost of Equity (Return on Stock) a Equity Beta 1.8 b Market return 14% c Risk-free return 2% d = b-c Market risk premium 12% e=c+ Cost of equity 23.6% a*d Weighted Average Cost of Capital (WACC) a Cost of debt 5.76% b Cost of equity 23.6% c Value of debt 50 million d Value of equity 60 million e = c/(c+d) % of debt 45.45% f = d/(c+d) % of equity 54.55% g = a*e+b*f WACC 15.49% Weighted average cost of capital. Assumptions: Risk Free Interest rate: Expected return on market Market risk premium beta Tax rate Pre-tax cost of debt Equity raised Debt raised Cost of Equity using CAPM After tax cost of debt WACC $ $ 2% 14% 12% 1.80 28% 8% 60.00 50.00 23.6% 5.76% 15.49% The percentages of debt and equity will remain the same whether assumption is based on the fact that he will still need working capi main the same whether Jeremy buys and builds in China or leases. This l still need working capital when going to China even if he leases. Lease Scenario: Assumptions: Net Investment: Beginning FCF Lease Expense Growth in FCF Lease Expense increases Tax rate WACC $ 50.00 $ 12.00 $ 10.00 15% 6% 28% 15.50% This first scenario assumes a 15% increase in free cash flow each year, and a 6% increase in lease expenses because the pro Cash Flows: 0 1 2 3 4 5 6 Free Cash Flow $ 12.00 $ 13.80 $ 15.87 $ 18.25 $ 20.99 $ 24.14 Lease expense, net of taxes $ 7.20 $ 7.63 $ 8.09 $ 8.58 $ 9.09 $ 9.64 Net cash flow $ (50.00) $ 4.80 $ 6.17 $ 7.78 $ 9.68 $ 11.90 $ 14.50 NPV $46.34 This scenario assumes no increase in FCF and lease expenses. Cash Flows: 0 1 2 3 4 5 6 Free Cash Flow $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 Lease expense, net of taxes $ 7.20 $ 7.20 $ 7.20 $ 7.20 $ 7.20 $ 7.20 Net cash flow $ (50.00) $ 4.80 $ 4.80 $ 4.80 $ 4.80 $ 4.80 $ 4.80 NPV ($22.60) expenses because the problem states inflation in China is 6%. 7 8 9 10 11 12 13 14 15 $ 27.76 $ 31.92 $ 36.71 $ 42.21 $ 48.55 $ 55.83 $ 64.20 $ 73.83 $ 84.91 $ 10.21 $ 10.83 $ 11.48 $ 12.16 $ 12.89 $ 13.67 $ 14.49 $ 15.36 $ 16.28 $ 17.54 $ 21.09 $ 25.23 $ 30.05 $ 35.65 $ 42.16 $ 49.72 $ 58.48 $ 68.63 7 8 9 10 11 12 13 14 15 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 7.20 $ 7.20 $ 7.20 $ 7.20 $ 7.20 $ 7.20 $ 7.20 $ 7.20 $ 7.20 $ 4.80 $ 4.80 $ 4.80 $ 4.80 $ 4.80 $ 4.80 $ 4.80 $ 4.80 $ 4.80 Buy Assumptions: Net Investment: Beginning FCF Increases in FCF WACC $ 110.00 $ 12.00 15.0% 15.5% The first scenario assumes an annual increase in FCF of 15%, as stated in the problem. There are no lease expenses or other expenses as FCF is after operating expenses. Years: Cash flows: NPV 0 $ (110.00) $ 1 12.00 $ 2 13.80 $ 3 15.87 $ 4 18.25 $ 5 20.99 $ 6 24.14 3 12.00 $ 4 12.00 $ 5 12.00 $ 6 12.00 $41.21 The second scenario assumes no increase in free cash flows: Years: Cash flows: NPV 0 $ (110.00) $ ($41.50) 1 12.00 $ 2 12.00 $ $ 7 27.76 $ 8 31.92 $ 9 36.71 $ 10 42.21 $ 11 48.55 $ 12 55.83 $ 13 64.20 $ 14 73.83 $ 15 84.91 $ 7 12.00 $ 8 12.00 $ 9 12.00 $ 10 12.00 $ 11 12.00 $ 12 12.00 $ 13 12.00 $ 14 12.00 $ 15 12.00