Stolichnaya vodka was produced and sold by the Union S for half a century. It was licensed and trademarked in the U.S. by VVO-SPI, an enterprise named S. VVO-SPI that came under the authority of SPI after the insolvency of the Union S. However, Russian court claimed that VVO-SPI was not privatized legally under its law, therefore, the authority and possession were held by the beneficiary of Union S, the Russian Federation. Further, the Federation assigned the mark to FTE, a federal enterprise. To this, FTE alleged against SPI for violation and manipulation of the trademark in U.S. federal district court. To find: The validity of assigning the trademark to FTE.

Question

Paradox Corporation is evaluating an extra dividend verses a share repurchase. In either case, $14,500 would be spent. Current earnings are $1.65 per share, and the stock currently sells for $58 per share. There are 2,000 shares outstanding. Ignore taxes and other imperfections in answering the following questions: Required Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth. What will be the effect on Paradox Corporation’s EPS and P/E ratio under the two different scenarios? In the real world, which of these actions would you recommend? Why?

Answer 1

Question

Chapter 11, Problem 8BCP

Summary Introduction

Case summary: Stolichnaya vodka was produced and sold by the Union S for half a century. It was licensed and trademarked in the U.S. by VVO-SPI, an enterprise named S. VVO-SPI that came under the authority of SPI after the insolvency of the Union S. However, Russian court claimed that VVO-SPI was not privatized legally under its law, therefore, the authority and possession were held by the beneficiary of Union S, the Russian Federation. Further, the Federation assigned the mark to FTE, a federal enterprise. To this, FTE alleged against SPI for violation and manipulation of the trademark in U.S. federal district court.

To find: The validity of assigning the trademark to FTE.

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