...Summary & Recommendations: Given Du Pont’s financial history and current position, we recommend that they forego a low debt capital structure for a 40% target debt ratio and attempt to cut their dividend. In the period of 1965-1981, Du Pont had undergone drastic change in their capital structure policy. Increases in industry capacity surpassed demand growth, driving prices down. Along with inflation’s effect on required capital spending, the oil shock driving up costs, a recessionary environment for the industry, and the vertical acquisition of Conoco, Du Pont’s capital structure was near unrecognizable by the end of the transitionary period. Du Pont’s debt ratio stood at 42%, up from less than 20% and eventually led to a downgrading of the firm’s credit rating to AA. Due to Conoco’s performance after the acquisition, the firm was in a troubled situation. Du Pont sold a part of Conoco’s assets dropping its debt ratio to 36%; Despite questionable financial ratios and poor earnings in ’82, Du Pont maintained its AA rating. Key Issues • The pecking order theory postulates that maintaining a 40% debt level would be ideal over the target 25% debt scenario. Reducing the debt ratio would require large issuing of equity, a source of capital that is more expensive than debt. Additionally, Du Pont’s diversified business units provide extra protection from the added-on risk of debt • Du Pont’s shares are undervalued due to investor conceptions from previous financial performance...
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...father of the Gods. Hera, his sister and wife, was the queen of the Gods.   Zeus Hera Worshiped many of the same Gods and Goddesses the Greeks did but they were name and faceless. They were a combination of several different religious beliefs. Roman religion expanded within the Imperial system and then included the Emperors. Julius Cesar was the first, stating that he was a descendent of Aeneas.  Julius Cesar Architecture Temple of Hera   Once built of wood, this temple’s altar is where the Olympic flame is lit and then carried throughout the world.   The Pont du Gard, an aqueduct bridge built by the Romans to transfer water from Uzes to Nimes. Economics & Food Based on agriculture although the land was hard to farm. Most lived on small wheat farms. Grapes were eaten or made into wine by walking over and kept in jars...
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...E.I. du Pont de Nemours and Company Jeffery D. Mack HRM / 531 Instructor: Dr. Lloyd Polen, PH.D. November 7, 2012 The Process Founded in 1802 by E.I. du Pont, E. I. du Pont de Nemours and Company, or DuPont, is a landmark in the global science and engineering community. As a current Fortune 500 Company, DuPont has been responsible for the innovation and/or manufacturing of black powder, dynamite, neoprene, rayon, and nylon (E.I. du Pont Nemours and Company, n.d., p. 1). With a vision to be the world’s most dynamic science company, DuPont strives to recruit, select, and retain the world’s most sought after talent. In this paper, Jeffery Mack and Geoff Varell will review DuPont’s potential recruitment and selection process when hiring for one of their key positions, Compensation and Benefits Manager, in their efforts to achieve their vision of “…creating sustainable solutions essential to a better, safer and healthier life for people everywhere” (E.I. du Pont Nemours and Company, n.d., p. 1). Selection Process “In DuPont, recruitment is based on matching competencies identified for the job (and it’s future state) with those exhibited by the candidate” (Bhargava, 2006, p. 1). Once an effective communication mean has been reach between the company and the candidates, DuPont uses a competitive selection process to match candidates with the desired qualifications. “While hiring is driven by business requirements...
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...3)Attempting to remedy the situation, the firm cut its dividend in 1974 and 1975 and drastically reduced its working capital investment they turned to debt financing. Du Pont's debt-to-equity ratio rose from a conservative 7% in 1972 to 27% in 1975 while the interest coverage ratio fell from 38 to 4.6. The increased debt ratio shows that they were moving towards a higher leveraged position and aggressively financing growth with debt. The reduced interest coverage indicates that Du Pont was now more likely to be unable to meet the required interest payments on its debt. Even with these financial risks, the company's size, diversity, and history as a leader in manufacturing allowed it to maintain its prestigious AAA bond rating. Through the second half of the 1970s Du Pont was able to reduce its debt ratio to 20% and increase interest coverage to 11.5 which preserved its highest bond rating. This move to financial stability helped satisfy worried investors but the managers at Du Pont knew that to advance their company, they had to use this increased flexibility to make more moves. 2) To evaluate the appropriate capital structure for DuPont, it is necessary to first estimate its current cost of capital. Then we compute the corresponding weighted average costs of each alternative to determine the capital structure, which maximizes the firm’s value (minimizes firm’s costs). We then incorporate into the analysis, qualitative considerations such as: effects on...
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...Background In this case you are asked to compare two different investment strategies the “maintain” and the “growth”. You will need to use an incremental approach in comparing each strategy to the nogrowth strategy which is Du Pont’s current strategy. You will ultimately decide if the “maintain” or the “growth” strategy is the best strategy for Du Pont. To determine the answer you will be asked a series of questions. Some questions are easy and others more difficult but they are all designed to help you to arrive at a solution to this case. While all the information that is needed to answer these questions is provided within the case, here is some additional information that will help you to identify the important problems in this case. Assume that there will be no additional foreign competition. Assume that Du Pont will make available to its competitors at no cost all the necessary information so that the competition can develop the chloride process to use in producing titanium dioxide. Du Pont has also decided that it will no longer restrict the licensing of the ilmenite chloride process. These should help eliminate any threat of antitrust problems. The strategy that Du Pont actually selected may or may not have been the correct one. What is important is how you analyze the problems in the case. Your logic and reasoning when answering the questions asked will determine your grade. In 1972 rates were as follows: 90day commercial paper = 4...
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...10/11/12 Du Pont Proposed Capital Structure for Du Pont Corporation Uploaded by settypr on Jun 7, 2006 | | | Proposed Capital Structure for Du Pont Corporation The Du Pont Corporation was founded in 1802 to manufacture gunpowder. After nearly two centuries of operations, the company has greatly diversified its product base through acquisitions and research and development,, and is one of the largest chemical manufacturers in the world. In 1995, Du Pont had revenues of $42.2 billion and net income of $3.3 billion. In this same period, 50 percent of the company's sales were outside the United States. Du Pont operates in approximately 70 countries worldwide, with about 175 manufacturing and processing facilities that include 150 chemicals and specialties plants, five petroleum refineries, and 20 natural gas processing plants. The company has more than 60 research and development labs and customer service centers in the United States, and more than 20 labs in 10 other countries. Currently, Du Pont is the thirteenth largest U.S. industrial/service corporation (Fortune 500). Until the 1960's, the company's capital structure had historically been very conservative, with the corporation carrying little debt (Figure 1). This was possible primarily because of the enormous success of the company. However, in the late 1960's, competition for Du Pont had increased considerably, and the company experienced decreased gross margins and return on capital Figure 1. The capital structure of...
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...have chosen the State of Florida vs. George Zimmerman as the first part of this paper. Why was Zimmerman charged and tried at the state level, and then face the possibility of Federal charges? Is this not “double jeopardy”? The court that will try a case is decided by jurisdiction, jurisdiction being defined as “(1) the legal authority of a court to hear and decide a certain type of case; (2) the geographic area over which the court has authority to decide cases “ (Definitions, n.d.). Also we must clarify state and federal jurisdiction. Federal court jurisdiction is limited to the types of cases listed in the Constitution and specifically provided for by Congress. For the most part, federal courts only hear cases in which the United States is a party and cases involving violations of the U.S. Constitution or federal laws. There are others, but those are the ones relevant to this paper. State courts have much broader jurisdiction, they preside over cases most individual citizens would be involved in and most criminal cases involve violations of state law and are thus tried in state court. Being as Zimmerman was charged with second degree murder, he was tried in a state court. Zimmerman was found not guilty by the jury, so case closed, correct? U.S. Attorney General Holder stated that after the trial that the Federal Government would investigate the possibility of charging Zimmerman with a civil rights violation, or the Federal “hate crime” law. The two statutes that he could...
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...Marketing Intelligence & Planning Emerald Article: Improving Marketing Intelligence at Du Pont UK B.A. Tibbert Article information: To cite this document: B.A. Tibbert, 1987"Improving Marketing Intelligence at Du Pont UK", Marketing Intelligence & Planning, Vol. 5 Iss: 4 pp. 23 - 30 Permanent link to this document: http://dx.doi.org/10.1108/eb045756 Downloaded on: 16-10-2012 To copy this document: permissions@emeraldinsight.com Users who downloaded this Article also downloaded: * Andrea Carpignano, Chiara Nironi, Francesco Ganci, (2011),"Technological risk: a criterion for the optimisation of future EU energy supply scenarios", International Journal of Energy Sector Management, Vol. 5 Iss: 1 pp. 81 - 100 http://dx.doi.org/10.1108/17506221111120910 Lord Ezra, 1992"Energy, Politics and the Environment", Managerial Auditing Journal, Vol. 7 Iss: 2 http://dx.doi.org/10.1108/EUM0000000001777 Colin Turner, Paul D. Gardiner, (2007),"De-internationalisation and global strategy: the case of British Telecommunications (BT)", Journal of Business & Industrial Marketing, Vol. 22 Iss: 7 pp. 489 - 497 http://dx.doi.org/10.1108/08858620710828863 Access to this document was granted through an Emerald subscription provided by NANJING AUDIT UNIVERSITY For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines...
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...GROUP - 1 GROUP - 1 Du Pont- Conoco IPO Carve Out and Split Off Case Analysis Du Pont- Conoco IPO Carve Out and Split Off Case Analysis SUMMARY E.I. du Pont de Nemours and Company, global leader in the technological innovation in business and the fifteenth largest company in the US in 1999, decided to divest its subsidiary Conoco, major and integrated oil and energy company, previously acquired through an M&A deal of $7.8 billion. In fact DuPont decided to move the company from its traditional energy and chemical businesses towards life science (agriculture, biotechnology, pharmaceutical) in a major operation of refocus on the core business. What became clear to DuPont shareholders was that they were not benefiting from being either a special chemical company, life science company or oil company: the price-earning multiple of the entire company was less than any of its representative sectors. Initially, the strategy of the new CEO was to increase share price through the division of the company in three sectors, of which life science represented the one most heavily funded. However, while company share price was predicted to rise to $90, it fell to $60. For these reasons it was opted for a divestiture through a split-off: DuPont would allow to trade each DuPont stock for 2.95 Conoco stocks, up to a total of 148 million DuPont shares. Once the deal was announced, DuPont shares soared 11% at an all-time high of $79.50 per share The strategy would have been...
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...Financial Condition Analysis Chapter 17 ANSWERS TO END-OF-CHAPTER QUESTIONS 17.1 a. Financial statement analysis, which focuses on the data contained in a business’s financial statements, is designed to assess the financial condition of the business. Operating indicator analysis, which focuses on operating (as opposed to financial) variables, attempts to identify the underlying operating parameters that contributed to the assessed financial condition. b. Of course, it is extremely important to understand a business’s financial condition, because any future plans must be supported financially. However, it is equally important, especially for managers, to understand what operational actions are required to ensure that the business maintains the financial condition needed to accomplish its mission. 17.2 Analyses that examine historical data provide managers and investors with an appreciation of the business’s current condition, which is important. However, the future is more important than the past, and the most important use of a historical analysis is as a springboard for preparing for the future. When plans are being made, pro forma (forecasted) financial statements are prepared and analyzed, so that managers can gain insights regarding the impact of alternative strategies on the business’s financial and operating condition. 17.3 The inventory turnover ratio indicates how well a business is utilizing its inventories. It tells managers how many dollars of sales...
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...Financial Policy Project - Air Arabia and Gulf Airlines Name University Introduction The project is based on the financial analysis of the two companies from the airline industry. The first company is Air Arabia and the second company is Gulf Airline. Air Arabia which was established by the King of Sharjah in the year 2003 is known as the best economic mode of air travelling in the United Arab Emirates. The company continued to provide economic and valued services to its customers through the last decade and has been successful in penetrating the Air traffic business. The company did not limit its operation only to the Arab countries but also expanded its business operations to the Europe and other parts of the world. The Air Arabia destinations not the Arab countries but also reached the European destinations like Casablanca and the Cairo. The company believes in expanding its business operations and for this reason, it has established its subsidiaries airlines in the other Arab countries as well. The company is performing air travelling operations through its subsidiaries companies in Egypt and Morocco as well. The company today operates its flight to 88 destinations across the globe. The company planes lands on the destinations ranging from Arabia, Middle East, Asia to Europe and Africa. The company believes in offering comfortable and reliable journey for its passengers at the lowest possible fares and with this business strategy, millions of passengers have travelled...
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...Entrepreneurial Leadership Aminata Soumano Bus 508 Contemporary Business July 21, 2011 Professor Christopher B. Mcgrath Strayer University Abstract The major reflections of excellence in entrepreneurial organizations focus primarily on the care of customers, constant innovation, committed people, and managerial leadership. Those entrepreneurial activities also lead to competitive advantage, wealth creation and success. Case, Kouzes , Drucker Entrepreneurs achieve desired levels of excellence in the development of their organizations through different strategies. Former AOL CEO, and chairman Steve Case describes his successful entrepreneurship in three different parts: people, passion, and perseverance. Case believes that if you put those three parts in the right balance everything is possible, and if you do not, nothing is possible. Today’s entrepreneurs must invest in people and ideas that can change the world. Innovation is a risk worth taking and everything people create take some time to realize. Focus on putting the right people around the right priority is a recipe for success. However, James Kouzes in his book “rising to the leadership challenge”, stated that Leadership is not about position, it is about motivating people in five different scales. The first level of motivation is being a role model and setting examples. Second, a leader should enable people to act. He should focus on what a team or an individual needs in order to function...
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...des collaborateurs HP en France De : Pierre Yves Tilly Sujet : Rappel des règles concernant les congés Bonjour à tous, 1. CONGES 2006 1.1. Droits à congés payés HP en France décompte les congés en jours ouvrés (c'est-à-dire travaillés : soit du lundi au vendredi). Au cours de la période de référence [1er juin 05 > 31 mai 06] chaque mois complet de travail ouvre droit à 2,08 jours, soit 25 jours ouvrés. 1.2. Congés pour ancienneté Ces congés sont acquis de la façon suivante : - 2 JOURS pour les salariés : âgés de 30 ans et ayant 1 an d'ancienneté ou ayant 5 ans d'ancienneté. - 3 JOURS pour les salariés : âgés de 35 ans et ayant 2 ans d'ancienneté ou ayant 10 ans d'ancienneté. (L'âge et l'ancienneté s'apprécient au 31 mai de chaque année de référence). 1.3. Période des congés Les jours acquis entre le 1er juin 2005 et le 31 mai 2006, doivent être pris entre le 1er juin 2006 et le 31 mai 2007. Le report d’une année sur l’autre n’est pas possible (excepté pour la maternité et la maladie sous certaines conditions). Au cours de la période allant du 1er juin au 31 octobre, les employés devront prendre un minimum de 15 jours ouvrés de congés payés dont 10 jours ouvrés consécutifs. Les salariés, qui au 31 octobre n’auront pas pris effectivement ce minimum, ne pourront plus prétendre à ces jours non utilisés...
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...Browning Electrical Company TIMELINE After reading the case study, I put together the following timeline diagram so as to assist me with understanding the case study. Figure 1: Timeline Figure 1: Timeline Although a steady growth rate of 33% has been maintained, the ineffective management of current assets (receivables and inventory) has resulted in a cash flow problem. Positive issues are: * There has been rapid growth in recent years and this is expected to continue in future. * The location of the company is good with access to a railway siding. * The sales have increased annually and are expected to reach R 25 000 000.00 in year 2001. * Browning’s conservative operation of the business was appealing to a number of trade creditors. * No sales representatives were employed, orders were taken over the telephone or by customers visiting the business. Negative issues are: * The company experienced a cash flow problem. * A need existed to increase borrowing from R 1 730 000.00 to R 3 250 000.00. * In order to fund the promissory note issued to Mr Stark, the business land and buildings were mortgaged for R 500 000.00. * Quantity discounts and credit terms of net 30 days were usually offered to customers who comprised of electrical contractors, small builders, handymen and members of the public. * Mr Browning possessed a house that cost R 500 000.00 to build and was mortgaged at R 270 000.00. QUESTIONS A. Explain (quoting...
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...Chapter 11 Miller (pad 383-397) Systems Levers SYSTEMS AS IMPLEMENTATION LEVERS In this chapter, we define Systems as established procedures by which organizations allocate resources and monitor their use. We refer to two categories of systems: Resourcing and Control. While we look at control systems as a whole, we further categorize an organization’s resourcing systems into three distinct types that reflect three basic resources organizations depend on: INFORMATION, PEOPLE AND CAPITAL. Both resourcing systems and control systems serve the needs of internal customers – those in the organization’s core processes – who, in turn, arte externally focused, serving customers outside the organization. You may remember seeing these distinctions made in previous chapters, using a model here as exhibit 11.1 A Generic Model of Core Processes and Systems Without the resources (information, people, capital) basic to the operation, core processes cannot offer the value customers need, and they will cease to provide an affective source of competitive advantage. At the same time, with-out controls the core processes are likely to move in different directions, squandering the resources they are allocated because they lack coordination. The way in which information is collected and provided, the general approach to developing human resources, the mind- set behind the capital allocation system, and the extent to which the firm emphasizes input...
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