Mini Case Advanced Managerial Finance

Evelyn Johnson

Mini Case

September 15, 2013

  1. What is the name of the company?   What is the industry sector?

Dollar General and the industry sector is retail.

  2. What are the operating risks of the company?

The operating risks of the company are compensation programs. They discuss any changes that may have occurred prior to their meeting when they meet again.

http://investor.shareholder.com/dollar/secfiling.cfm?filingID=1047469-11-3215

  3. What is the financial risk of the company (the LT debt to total capitalization ratio)?

After reviewing the 2011 annual report, it looks like this company as a higher capital costs than any other Family Dollar Store, and because of this, it can increase their financial risks if they do not perform as expected.

          = 2,617,891/(2,617,891+4,668,495)   |

        = 0.3592   = 36%

  4. Does the company have any preferred stock? (Shares/book value/market price and value)

After reviewing the information, I do not see where they have any preferred stock or outstanding stock.

5. What is the capital structure of the company?: Short term portion of Long Term Debt, Long Term Debt, Preferred Stock (if any), and market value of Common Stock issued and outstanding

Capital Structure

Most Recent (Jul 2013)

| Type | % | Amount |

|

| Debt | 35.4 | 2.9 Bill |

|

| Preferred | --- | --- |

|

| Equity | 64.6 | 5.2 Bill |

|

Historical

Apr 2013

Jul 2012

Jul 2010

| Type | % | Amount |

|

| Debt | 35.4 | 2.8 Bill |

|

| Preferred | --- | --- |

|

| Equity | 64.6 | |

http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=dg

6. What is the company’s current actual Beta? Beta is 1.03

7. What would the Beta of this company be if it had no Long Term Debt in its capital structure? (Apply the Hamada Formula.)

8. What is the company’s current Marginal Tax Rate?

9. What is the Cost of Debt, before and after taxes?

Debt & Coverage Ratios

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