Your Course Project Title Goes Here

 

 

 

 

 

 

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Your Course Project Title Goes Here

The purpose of a proposal is to highlight standout ideas, and to do so in a manner that can convince an audience to support a project. Proposals delivered in a workplace are often part of a competitive process in which the strongest proposal is offered the business. In these contexts, effective word choice and professional delivery define the effective communication of an idea. Your research proposal will be presented as a sentence outline. As the name suggests, the sentence outline presents complete thoughts in complete sentences as opposed to phrases. In each section of the proposal, choose ideas with the goal of persuading your reader to believe that you are interested in the topic and ready to learn how to develop the topic into a project. Use a complete sentence to provide the response to each of the questions below. You can use first person. Use APA documentation for the final section of the proposal to document any sources referenced in your proposal. Remember to put at least two items at any given level of the outline, as shown in this template and the sample proposal.

  1. Introduction
    1. Topic
      • What is your research question?
      • What is your working thesis? (It answers your research question and defines the direction of your argument.)
      • What is your angle on the topic? (Your angle is your unique perspective or view on the issue.)
    2. Context
      • Justify for your reader why the topic is important.
      • Justify for your reader why you are the one to write about it. What do you bring to the topic?
    3. Audience
      • Who is your primary audience? (These are the readers who would be best affected by what you have to say. They can be readers of an existing publication.)
      • Who is your secondary audience? (Identify this audience as your professor and fellow students.)
      • Does your audience share your opinions and values? (Determine if the audience is on your side or if they may be skeptical.)
  1. Evidence
  1. What research have you gathered so far? (What have you found that supports your purpose and angle?)
  2. What research do you need to gather? (What other kinds of information will you need as support? What will you use to represent the opposing view?)
  • Conclusion (What are you proposing to achieve with your project? What would you like approval on in order to proceed with the project?)

 

  1. References (must be correctly formatted according to the APA Publication Manual).

Altria Group Inc.

About the company

Virginia (USA)-based company, Altria Group Inc. is one of leading tobacco corporations in the world. With net revenue of $24.5 billion in 2014 the company has following wholly-owned subsidiaries: (i) Philip Morris USA Inc., (ii) John Middleton Co. (iii) U.S. Smokeless Tobacco Company LLC, (iv) Ste. Michelle Wine Estates Ltd., (v) Nu Mark LLC and (vi) Philip Morris Capital Corporation. In addition, Altria Group, Inc. approximately 27% of the economic and voting interest in one of the world’s largest brewing companies, UK based SABMiller plc, where it has 3 seats on the 14-person board of directors (“Independence” http://www.sabmiller.com/about-us/corporate-governance/board-composition & “Who we are” http://www.sabmiller.com/about-us/who-we-are). Philip Morris International was spun off in 2008.

Philip Morris USA was established in 1847. More than 150 years later, it is the leading manufacturer of cigarettes in the United States (a position they held since 1983). It produces some of the most well-known brands in the consumer products industry. Marlboro leads the cigarette product portfolio. In 2014, Marlboro’s retail share was 43.8% in USA, larger than the next 10 cigarette brands combined. It also manufactures other strong cigarette brands, including Parliament, Virginia Slims and L&M. These brands are among the nation’s best-selling cigarette brands. In 2014, PM USA’s retail cigarette share was 50.9%. (http://www.altria.com/our-companies/philipmorrisusa/about-philipmorris-usa/Pages/default.aspx)

 

Established in 1856, John Middleton is a leading manufacturer and marketer of pipe tobacco and cigars. Their Black & Mild brand is the second-largest selling large machine-made cigar in the U.S. In 2014, the company’s total retail share was 29%. Middleton also manufactures pipe tobacco with brands including Prince Albert, Carter Hall and Middleton’s Cherry Blend. (http://www.altria.com/our-companies/johnmiddleton/about-johnmiddleton/Pages/default.aspx)

 

Established in 1822, U.S. Smokeless Tobacco Company (USSTC) is the leading producer and marketer of the moist smokeless tobacco, one of the fastest growing tobacco segments in the United States. Copenhagen leads the moist smokeless tobacco product portfolio. In 2014, it was the number one premium moist smokeless tobacco brand in the United States, and Skoal, USSTC’s other leading brand, was the number two premium brand. Copenhagen and Skoal achieved 30.8% and 20.4% retail share respectively in 2014. In 2014, USSTC had 6 of the top 10 SKUs in the smokeless tobacco category. Other brands include Red Seal and Husky. (http://www.ussmokeless.com/en/cms/Company/Market_Information/default.aspx)

 

Founded in 1934, Woodinville, Washington-based Ste. Michelle Wine Estates Ltd. produces and markets wines. The company offers red, white, and sparkling wines through distributors worldwide. Ste. Michelle Wine Estates Ltd. has a strategic alliance with Antinori. It operates wineries in Washington, California, and Oregon. Ste. Michelle Wine Estates Ltd. operates as a subsidiary of UST LLC. (http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=705954)

 

Nu Mark LLC is engaged in developing and marketing innovative tobacco products for adult tobacco consumers. It sells an e-vapor brand called MarkTen. In April 2014, Nu Mark acquired Green Smoke Inc. and its affiliates for a total purchase price of up to approximately $130 million, which includes contingent consideration. This acquisition enhances Nu Mark’s competitive position by adding e-vapor experience, broadening product offerings and strengthening supply chain capabilities. (http://www.nu-mark.com/about-us/our-story/Pages/default.aspx)

 

Philip Morris Capital Corporation maintains a portfolio of finance assets, substantially all of which are leveraged leases. (“General Development of Business, Form 10-K”, 2014)

 

With more than 20 years at Altria Group, Martin J. Barrington, Chairman, Chief Executive Officer and President of Altria Group, Inc., has served in numerous executive roles – business and legal, domestic and international – for virtually all the companies in the Altria family.  William F. Gifford, Jr. is the Chief Financial Officer and has around 10 years of experience at Altria Group.

 

Financials

Altria Group’s 2014 net revenues were $24.52 billion, nearly same as in 2013 ($24.47 billion). However, net profit significantly increased by 12% y-o-y to $5.07 billion in 2014 from $4.54 billion in 2013. This increase was mainly attributable to (i) reduced interest and other debt expense resulting from debt maturities in 2013 and 2014, as well as debt refinancing activities in 2013 and (ii) very less loss on early extinguishment of debt. In 2014 the loss on early extinguishment of debt was only $44 million, in contrast to $1.08 billion in 2013. 2014 EBITDA was at $8.84 billion, up by 8% y-o-y ($8.21 in 2013). (https://www.stock-analysis-on.net/NYSE/Company/Altria-Group-Inc/Valuation/EV-to-EBITDA)

 

For 2014 the basic and diluted earnings per share rose to $2.56 from $2.26 in 2013. Dividend per share has grown with CAGR of 8.9% to $2.08 in 2014 from $1.36 in 2009. The company expects to continue to maintain a dividend payout ratio target of approximately 80% of its adjusted diluted EPS. The current annualized dividend rate is $2.08 per Altria Group, Inc. common share.

 

During 2014, 2013 and 2012 the Board of Directors authorized Altria Group, Inc. to repurchase shares of its outstanding common stock under several share repurchase programs. Altria Group, Inc.’s total share repurchase activity was as follows:

 

  For the Years Ended December 31
2014 2013 2012
(in millions, except per share data)
  Total number of shares repurchased 22.5 16.7 34.9
  Aggregate cost of shares repurchased $939 $600 $1116
  Average price per share of shares repurchased $41.79 $36.05 $32

 

The total outstanding debt as on December 31, 2014 was $14.69 billion ($14.52 in 2013). The total cash and cash equivalents were at $3.32 billion as compared to $3.18 in 2013.

(10-K, 2014. http://www.sec.gov/Archives/edgar/data/764180/000076418015000022/a2014form10-kq42014.htm#s9AFD9B88CD4E1CA9DE2575F111F763B8)

 

Business Segments

Altria Group, Inc.’s reportable segments are smokeable products, smokeless products and wine. The financial services and the innovative tobacco products businesses are included in an all other category due to the continued reduction of the lease portfolio of PMCC and the relative financial contribution of Altria Group, Inc.’s innovative tobacco products businesses to Altria Group, Inc.’s consolidated results. (“Form 10-K”, 2014)

Basic stock information

Altria Group Inc. is listed on the New York Stock Exchange and trades under the ticker symbol “MO”. As on March 20, 2015 the company has market capitalization of $101.14 billion and enterprise value of $112.51 billion. With 52-Week high price at $56.7 and 52-Week low price at $36.44 the share price closed at $51.42, soared by 41% from $36.45 as on March 20, 2014.

As per trailing twelve months (as of Dec 31, 2014) Return on Assets was 14.17% and Return on Equity was 140.87%.  As per most recent quarter (as of Dec 31, 2014) the ratio of Total Debt to Equity was 482.53 and Current Ratio was 1.11.

(Yahoo Finance. http://finance.yahoo.com/q/hp?s=MO)

On March 12, 2014 Standard & Poor’s had upgraded Altria Group Inc. to a rating of BBB+ from BBB. S&P also assigned a stable outlook in the upgrade. This upgrade was on the back of Altria’s substantial financial flexibility, pricing power and a solid position from its approximately 27% SAB Miller stake. (“Altria Gets Smoking Upgrade From S&P”, March 12, 2014. http://247wallst.com/consumer-products/2014/03/12/altria-gets-smoking-upgrade-from-sp/)
Industry Analysis

The tobacco industry comprises those persons and companies engaged in the growth, preparation for sale, shipment, advertisement, and distribution of tobacco and tobacco-related products. It is a global industry; tobacco can grow in any warm, moist environment, which means it can be farmed on all continents except Antarctica.

Tobacco, one of the most widely used addictive substances in the world, is a plant native to the Americas and historically one of the half-dozen most important crops grown by American farmers. Tobacco is an agricultural commodity product, similar in economic terms to agricultural foodstuffs: the price is in part determined by crop yields, which vary depending on local weather conditions. The price also varies by specific species or cultivar grown, the total quantity on the market ready for sale, the area where it is grown, the health of the plants, and other characteristics individual to product quality.

There is no denying the fact that in spite of a global economic downturn, lawsuits, health problems, and rising prices of cigarettes, the global tobacco industry has continued to generate strong growth as well as profits. Many legal problems continue to plague the global tobacco industry as governments around the world continue to put in place strict regulations to curb the use of tobacco. The health impacts of tobacco are many and many smokers are suffering from cancer or other side effects of tobacco consumption. (“Analyzing the Global Tobacco Industry”, 2015 /PRNewswire. http://www.prnewswire.com/news-releases/analyzing-the-global-tobacco-industry-300024309.html)

The market for smokeless tobacco has grown into a multi-billion dollar a year industry with millions of users choosing an alternative to traditional cigarettes. Whether it’s chewing tobacco, snuff, or the newest trend in vaporizing, new users are finding ways to cut the smoking habit and chose a “better” alternative. A report from Research and Markets shows that sale of e-cigs in the United States, estimated to now be a $1.5 billion market, are set to grow 24.2% per year through 2018. In addition to that, Euromonitor International data finds that the number of traditional cigarettes sold in the United States has fallen nearly 30% since 2004 supporting the shift in smokeless alternatives. (“Companies Not Blowing Smoke When It Comes To Growth In The Smokeless Tobacco Industry”, 2015. http://www.hawaiinewsnow.com/story/28561858/companies-not-blowing-smoke-when-it-comes-to-growth-in-the-smokeless-tobacco-industry)

Leading 10 tobacco companies worldwide in 2014 are as follows. This ranking depicts the leading 10 tobacco companies worldwide in 2014, based on net sales. In that year, Philip Morris International was the leading tobacco company worldwide with about $30.9 billion worth of sales. (“Leading 10 tobacco companies worldwide in 2014, based on net sales (in billion U.S. dollars)”. http://www.statista.com/statistics/259204/leading-10-tobacco-companies-worldwide-based-on-net-sales/)

 

Quota Buyout Expiration:

Since the institution of the Fair and Equitable Tobacco Reform Act of 2004, the federal tobacco quote and price support system has been replaced by an industry-funded buyout of tobacco growers and quota holders. The resulting decade of buyouts has cost the tobacco industry about $10 billion, but the buyouts came to an end in 2014.

Starting in 2015, the elimination of buyout payments will reduce annual operating costs at Altria Group Inc by about $300 million, at Reynolds American, Inc. by about $160 million and at Lorillard Inc. by about $95 million.

Morgan Stanley analysts see four possible uses for the savings that will result from the end of the buyout:

  • Increase volumes by cutting costs
  • Realize an up to 5% boost in 2015 earnings
  • Invest further in the development of e-cigarettes and other technologies
  • Utilize greater operational flexibility to achieve accretion targets

Macroeconomic Analysis

As per World Economic Outlook Update, January 2015 the global growth in 2015–16 is projected at 3.5 and 3.7%, downward revisions of 0.3% relative to the October 2014 World Economic Outlook (WEO). The revisions reflect a reassessment of prospects in China, Russia, the euro area, and Japan as well as weaker activity in some major oil exporters because of the sharp drop in oil prices. The United States is the only major economy for which growth projections have been raised.

The main upside risk is a greater boost from lower oil prices, although there is uncertainty about the persistence of the oil supply shock. Downside risks relate to shifts in sentiment and volatility in global financial markets, especially in emerging market economies, where lower oil prices have introduced external and balance sheet vulnerabilities in oil exporters. Stagnation and low inflation are still concerns in the euro area and in Japan

Unites States – Growth is projected to exceed 3% in 2015–16, with domestic demand supported by lower oil prices, more moderate fiscal adjustment, and continued support from an accommodative monetary policy stance, despite the projected gradual rise in interest rates. But the recent dollar appreciation is projected to reduce net exports.

Euro Area – The recovery is projected to be somewhat slower than forecast in October, with annual growth projected at 1.2% in 2015 and 1.4% in 2016.

In emerging market and developing economies, growth is projected to remain broadly stable at 4.3% in 2015 and to increase to 4.7% in 2016—a weaker pace than forecast in the October 2014 WEO.

(“World Economic Outlook Update”, January 2015. https://www.imf.org/external/pubs/ft/weo/2015/update/01/pdf/0115.pdf)

Stock Valuation

  1. Dividend Capitalization – Single Period Share Valuation Method

It is a model where we determine the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. Given a dividend per share that is payable in one year, and the assumption that the dividend grows at a constant rate in perpetuity, the model solves for the present value of the infinite series of future dividends.

Formula:

Stock Value Po = D / (k – G)

Where:

D = Expected dividend per share one year from now

k = Required rate of return for equity investor

G = Growth rate in dividends (in perpetuity)

  • In case of Altria, we expect the share price to grow by 5% at the end of one year. So G is equal to 5%.
  • The company has declared to maintain a dividend payout ratio of approximately 80% of adjusted diluted EPS. Basic and diluted earnings per share for 2014 were $2.56. So we assume dividend to be distributed in 2015 equals to $2.048 (80% of $2.56).
  • Required rate of return for equity investor is equal to 7.54% This is calculated using Capital Asset Pricing Model

E(R) = RFR + βstock (Rmarket – RFR)

Where:

  • E(R) = the required rate of return, or expected return
  • RFR = the risk free rate
  • βstock = beta of the stock
  • (Rmarket – RFR) = the market risk premium
RFR 2%
Beta of stock 0.66
Market risk premium 8.50%
Required rate of return (k) 7.54%

Risk free rate is assumed to be the Daily Treasury Yield Curve Rate of 2% for 10-year US Treasury Bill. (http://www.treasury.gov/resource-center/data-chart-center/interest%20rates/Pages/TextView.aspx?data=yield)

Therefore, stock value is equal to:

Expected dividend in 2015 (D) 2.048
Constant growth (G) 5%
Required rate of return for equity investor (k) 7.54%
Present value of Stock  (P0) 80.62
  1. Dividend Capitalization – Multi-Period Share Valuation Method

Given investors can hold a common stock for over a year, it is useful to value a stock over the investor’s expected holding period. In this case, the below model can be used.

Value of common equity = D1 / (1+k)1 + D2 / (1+k)2 + D3 / (1+k)3+…… Dn / (1+k)n

Presently the share price of Altria is $51.42 and we expect it to increase at an annual rate of 5%. Further, we assume that the expected dividend to grow at a rate of 8% p.a. Suppose the opportunity cost of capital is 7.5%.

Year Dividend Present values of dividend stream Share Price Present values of future Share Price
2015 2.048 1.905 53.99 50.224
2016 2.212 1.914 56.69 49.056
2017 2.389 1.923 59.53 47.915
2018 2.580 1.932 62.50 46.801
2019 2.786 1.941 65.63 45.713
Total   9.615    

 

Present value of the stream of dividends is (A) 9.615
Present value of the share price at the end of five years is (B) 45.713
Hence, the total present value of the share is (A+B) 55.328

 

 

 

References

http://www.sec.gov/Archives/edgar/data/764180/000076418015000022/a2014form10-kq42014.htm#s9AFD9B88CD4E1CA9DE2575F111F763B8

http://www.acemyhw.com

 

Margaret Thatcher became the Prime Minister of United Kingdom of Great Britain

 

 

 

 

 

 

 

 

 

 

 

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Introduction

Margaret Thatcher became the Prime Minister of United Kingdom of Great Britain and also Northern Ireland in the year 1979. Her personal inclination was towards fiscal rigor, freedom of choice and also in individual responsibility. She implemented strict policies that were controversial, inciting and became a debate among colleagues. She reduced spending, tax rates, inflation and also size of the civil service which led to an increase in the gap between wealth and poverty. There was a battle with the trade unions that encouraged free market economics.

Battle fought by her to reach at the top

She was the first woman to lead a British political party and also Western nations. Young Margaret hardly makes any real friends instead she cultivated relationships with the right girls. She somehow managed to study in oxford with her strong links. She was invited to represent the Oxford Graduates Conservative Associations at the annual party conferences that arrived in the year 1948 that transformed her career from a chemist to politician. In the third campaign called by Prime Minister Harold Macmillan called in the year 1959 Margaret Thatcher was the most eager politician out there. She possesses a graceful charm that discovers most of the people.

She also became the youngest Member of Parliament when the lections took place. She was completely new to the house and was known to only some Conservative MPs from Oxford but she knows a great trick of being noticed. Her incredible energy was witnessed by everyone that gave her a boom in the politics career. She was ready for tough and tumble but her first concern was to get a maiden speech under her belt which she got in the new session (Richard, 2012).

After her speech she was promoted by a newspaper printing strike that led to several labor dominated councils to refuse in a solidity more to allow strike bearing reporters to be covered in the meetings. Thatcher seriously worked very hard all throughout her early years in the Parliament doing all research and struggling with the books of research. She was neither a genius nor an intelligent but she was very bright in her acts. Others can be smarter but she possesses greater knowledge in depth that has more experience.

In the early years, Thatcher was capable of putting all the MP’s into sleep with the statistics prepared by her but she very well knows how to wake them up also. The parliament parties were never able to revolt her or indulge any rebels. She possessed any extraordinary caliber that made her to be noticed by her senior colleagues of the Conservative party which proved to be an important recognition in her political career. She was offered by Macmillan a post in the Ministry of Pensions and National Insurance. After the resignation of Macmillan in 1963, Sir Alec Frederick Douglas Home took over his place that led to complete restructuring of internal party alliances. In July Douglas Home resigned and Edward Heath took over. Then Heath switched her to the two spots on the shadow Treasury Team that led her to great challenges in mastering budget intricacies. Heath also collapsed and somehow the situations lead the opposition’s fight against the Labor government. Thatcher was elected to Conservative leadership in 1975 after so many ups and downs seen by her in her complete political career (Andy, 2010).

Conclusion

Thatcher proved to be subject of inspiration for many. Even in Falkland, Margaret Thatcher Day has been marked every 10 January since 1992. She was even awarded as the Presidential Medal of Freedom which is the highest civilian honor awarded by the US government. She was found to be the patron of The Heritage Foundation.

References

Aldous, Richard (2012). AceMyHW.com W. W. Norton. Retrieved March 22, 2015

Beckett, Andy (2010). When the Lights Went Out; Britain in the Seventies. Faber & Faber. Retrieved March 22, 2015

 

 

 

 

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Matrix on three Historical Leadership Views: Hitler, Machiavelli, and Du Bois.

 

Commonalities Disparities
The significance of LeadershipAs the three leaders would attest to, leadership is a significant aspect in the society. For a fact, it has been this way for a long time. As Machiavelli observed, without effective leadership, societies would collapse. In his Italy, wayward leaders failed to lead the country. The country faced a number of invasions from neighboring countries. Furthermore, leaders were so corrupt that they would use public money for their family gain. Basically, the society was rotten and this is why Machiavelli preferred good leaders who would use anything in their power to steer the country forward.

On his part, Du Bois believed that his race would be liberated when good leaders were nurtured through going to school.

As for Hitler, he saw that his country lacked proper leadership and he took the opportunity to become one.

Power These leaders had different visions of how power can be used. Du Bois understood that power can be attained through empowerment. Furthermore, this power should be used to enrich the society. However, Hitler believed that power should be attained through military might. This is why he formed a strong Army to expand his territory. Machiavelli’s views would probably resonate with those of Hitler, though the end of Hitler did not justify the means.
ConfidenceAll these three leaders had mastered enough courage to help them achieve their goals. It did not matter what price had to be paid. Hitler risked many wars to become the great leader he wanted to be. Machiavelli spoke about the rampant corruption he witnessed in the leadership at the time. Du Bois was confident enough to be a leader of his African American race. DirectionThese leaders underwent different journeys before they became themselves. Machiavelli was in government, Du Bois went to school, while Hitler followed the military way.
Hard WorkAll these entities worked extremely hard to attain their dreams and ambitions. They had their goals set already. All they had to do was do anything in their power to achieve them. Hitler started from trying to enter the army at the most basic level. Du Bois had to study hard before becoming what he envisioned. Machiavelli would also serve several government positions. Goals SetThese three had different goals in the leadership journeys. Hitler wanted to rule the world, thus he would try and conquer as many nations as possible. Du Bois envisioned to become a leader of his race through empowerment. As for Machiavelli, he set out to rectify the mistakes of leadership that did not benefit the people.
Charismatic SkillsAs it were, these leaders had charisma in them to have won followers and support from the larger masses. Their respective individual skills ensured that they would navigate the many hurdles place before them. Notably, these leaders managed to have put their name on history books. Therefore, they were able to change the minds and thinking capacity of many amongst their contemporaries and up to date. They would influence other people and empower those who believed in them in many ways. Hitler had the necessary charisma to rally the Germans behind him. The same can be said about Machiavelli’s beliefs and Du Bois. AuthorityIt is intriguing to note how these three had distinct views on authority. Without a doubt, Hitler was authoritarian. He believed that authority had to be instilled through intimidation. To this end, authority should not be challenged. The same can be said about Machiavelli. On his part, Du Bois believed that authority should not be harsh. It should work with the people for the society’s betterment.
CourageAll the leaders displayed a great extent of courage on their part before achieving their legacies. All three had to engage in controversion and all manners of opposition to influence their respective population. Though Hitler would engage in merciless killings, it is clear that he was courageous enough to take the world by storm. As for Du Bois, it did not matter what his race was subjected to. He had to make it in the end. Machiavelli also believed that leaders had to be courageous enough to do what other people would fail to do. It is a characteristic that distinguishes leaders from the rest. PhilosophiesThe three individuals had different philosophical views on leadership and the human race. Du Bois advocated for racial solidarity, self-help and accommodation within the larger society. Hitler believed in his own racial superiority while Machiavelli believed the end ought to justify the means employed by leaders.
Shared ValuesThough in their own ways, these three individuals had a set of shared values that became the bedrock of their leadership achievements. For instance, they all believed that they had the best interest of the people at heart. The value framework is quite significant when assessing the leadership space.
Process of Acquiring LeadershipA close look at these three, one should notice that they had to pass through a certain path before they achieved their leadership stature. Nothing was given to them on a silver plate. Before youths can become effective leaders, they have to undergo an experience of virtue that will enable them go through with their journey. Hitler and Du Bois came from poor backgrounds but rose to become world known leaders. Machiavelli also believed that leaders had to do anything in their power to benefit the masses.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Wren, T. J. (1995). The Leader’s Companion: Insights on Leadership Through the Ages. New York, NY: Free Press.