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Corporate Finance: Assignment

   

Added on  2020-04-21

4 Pages482 Words48 Views
Running head: CORPORATE FINANCECorporate financeName of the Student:Name of the University:Author’s Note:

1CORPORATE FINANCEVarious risks to Facebook:Facebook has delivered significant return over the periodIndustry risk- Facebook success can be disrupted due to evolving competing socialnetworks in terms of strength of network of company, user base and monetization. One of thebiggest players in industry is MySpace. Increasing competition in industry has the possibility ofweakening and displacing the competitive position of Facebook. Market risk- The valuation of company cannot be justified despite of leveraging to theirmassive users. The advertising model of company is although generating remarkable results, theconversion of sales from mobile ads is low compared to desktop alternatives. There exist riskwhether organization will have any considerable improvement over this matter. Currency risk- Business of Facebook is ever growing at international level and it isexposed to risk of fluctuation in level of currency of different operating companies. A totalrevenue of $ 3.54 billion is recorded in year 2014 and it was said that revenue growth wouldhave been higher by 49% if there would not been any fluctuation in currency level. Therefore, itis inferred that revenue generated by organization is significantly impacted by fluctuation inforeign currency level as the recorded revenue would have been higher due to generalstrengthening dollars outside United Sates. Performance attributed to management of organization: The bulk of growth of Facebook is lured to ability of management to keep engage moreand more visitors to site. Facebook experiences incredible increase in revenue generated and netincome year on year. Performance of company is generated from several efforts of managementsuch as making key acquisitions and hiring specialized employees. In order to serve the existing

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