For each part, show the partid, part name, total quantity sold and

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Question 1: For each part, show the Sales Orders that sold that part. Show the Parts that have no sales as well. Display the PartID, Part Name, Sales Order #, the Quantity sold and the price for the order.

Hint: A Left Join returns everything already selected even if it doesn’t match the tables following. An Inner Join only returns those rows that match the condition in both tables. A Right Join is the opposite of a Left Join: It returns rows in every table AFTER the join even if the previous rows are not matched.

Question 2: For each Part, show the PartID, Part Name, Total Quantity sold and the total sales, including Parts with no sales. Order by the quantity sold descending, then by the name of the part.

Hint: Aggregrate columns return results based on “groups” of rows. If you select a non-aggregrate column, your query must GROUP BY those non-aggregrate columns. To convert NULL to 0, use IsNull(column name, 0), for example IsNull(OrderCost, 0).

Question 3: For each Sales Order, show how many days it took to ship the order in order by the longest order, then by Sales Order Number. Display Sales Order Number and the number of days to ship. Include the orders that have not yet shipped.

Hint: Look at the DATEDIFF function to return the difference between two dates. The two dates in this problem are the Order Date and the Shipment Date.

Question 4: Show the orders that are partial shipments meaning that the quantity shipped is less than the quantity ordered. Display the SalesOrderNumber, PartID, Quantity Ordered and the Quantity Shipped in order by SalesOrderNumber, PartID.

Hint: All of this information comes from two tables: SalesOrderPart and ShipmentPart. use the WHERE statement to find the rows where the SalesOrderPart Quantity is greater than (use ‘>’) the ShipmentPart Quantity.

Question 5: Show the total sales by year. Display the year and the total sales. Sort by year.

Hint: Try using the YEAR( some date ) function and the SUM( some column ) aggregate function. Don’t forget your GROUP BY. Note that YEAR( some date ) is a function and not an aggregate meaning that it must be in the GROUP BY expression.

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July 1, 2023

Individual Assignmnet Corporate Finance

Tenyearsago,in 2003,GeorgeReebyfoundeda smallmail-‐order companysellinghigh-‐ qualitysportsequipment.SincethoseearlydaysReebySportshas grownsteadilyand been consistently profitable.

The companyhas issued2millionshares,all of whichareownedbyGeorgeReebyand his five children.Thecompanydoesnot useanydebtin its capitalstructure.Forsomemonths George has beenwonderingwhetherthetimehas cometo takethecompanypublic.This wouldallowhimto cashin on partof his investmentand wouldmakeit easierforthefirmto raise capital should it wish to expand in the future.

But how much are the shares worth? George's first instinct is to look at the firm's balance

sheet, which shows that the book value of the equity is $26.34 million, or $13.17 per share.

A share price of 13.17 would put the stock on a P/E ratio of 6.6. That is quite a bit lower than

the 13.1 P/E ratio of Reeby's larger the rival, Molly Sports.

Georgesuspectsthat bookvalueis not necessarilya goodguideto a share'smarketvalue. Hethinksof his daughterJenny,whoworksin an investmentbank.Shewouldundoubtedly knowwhatthesharesareworth.Hedecidesto phoneheraftershefinishesworkthat evening at 9 o'clock or before she starts the next day at 6.00 a.m.

Beforephoning,Georgejots downsomebasicdata on thecompany'sprofitability.After recoveringfromits earlylosses,thecompanyhas earneda returnthat is higherthan its estimated10%costof capital.Georgeis fairlyconfidentthat thecompanycouldcontinueto growsteadilyforthenextthreeto fiveyears.In fact,hefeelsthat thecompany'sgrowthhas beensomewhatheldbackin thelast fewyearsbythedemandsfromtwoof thechildrenfor the company to make large dividend payments. Perhaps, if the company went public, it

could hold back on dividends and plow more money back into the business.

Therearesomecloudson thehorizon.Competitionis increasingand onlythat morning MollySportsannouncedplans to forma mail-‐order division.Georgeis worriedthat beyond thenextthreeorso yearsit mightbecomedifficultto find worthwhileinvestment opportunities.

GeorgerealizesthatJennywillneedto knowmuchmoreabouttheprospectsforthe businessbeforeshecanputa final figureon thevalueof ReebySports,buthehopesthat

theinformationbelowis sufficientforherto givea preliminaryindicationof thevalueof the

shares.

Column1	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013E
earningsper share,$	-‐0.70	-‐0.23	0.81	1.10	1.30	1.52	1.64	2.00	2.03	2.33	2.68
Dividend,$	0.00	0.00	0.20	0.20	0.30	0.30	0.60	0.60	0.80	0.80	1.00
Bookvalue pershare,$	7.70	7.00	7.61	8.51	9.51	10.73	11.77	13.17	14.40	15.93	17.62
ROE,%	-‐7.14	-‐2.99	11.57	14.45	15.28	15.98	15.28	16.99	15.41	16.21	16.85

a) HelpJennyto forecastdividendpaymentsforReebySportsand to estimatethevalue of thestock.You do notneedto providea singlefigure.Forexample,youmaywishto calculatetwofigures,oneon theassumptionthattheopportunityforfurther profitableinvestmentis reducedin year3and anotheron theassumptionthatitis reducedin year5.You canassumea costof equityof 12%forthecalculation.

(21points)

OnceReebyoperatesas a marketlistedfirm,Georgewillhaveto justifythefirm’scapital structuretowardsshareholders.Hehas heardfromhis daughterthatmostfirmsshould use atleastsomedegreeof debtif thegoalis themaximizationof shareholdervalue.Jenny mentioneda “debttax shield”as thereasonforherclaim.George,on theotherhand is worriedabouttheincreasedriskthatdebtmightbringforequityholders.

b) Brieflyexplaintheleverageeffectand howitis relatedto theexpectedriskfor shareholders.Also,explainthebalancing(ortrade-‐off) theoryof capitalstructure. Whatarethetwoeffectsthatneedto bebalancedand whatdoesthetheoryimplyfor thedebt/equitychoiceof Reeby?(13points)

Georgeis increasinglyconfidentto takethefirmpublic.However,therearestill someissues aroundtheIPOprocessthathehas notyetfiguredout. Hehas writtendownthesequestions and asksforyourhelp:

c) Pleaseexplainwhata „Greenshoeoption“ is and underwhatcircumstancesitis used.

(4points)

d) WithintheIPOprocessunderwritersplayan importantrole.Definetheterms underwriterand syndicateand explaintheirrole/purpose.(4points)

e) In 2003,prosecutorschargedseveralinvestmentbankersforwhatis called“spinning”.

Brieflyexplaintheunderlyingprincipleand rationalizetheuseof spinningby investmentbanks.(8points)