When companies are trying to determine the pay of their CEOs, it would be wise to apply the stakeholder theory by Edward Freeman. Stakeholders are very important in the success of the company and all stakeholders should be considered when making business decisions. By using the stakeholder theory, the boards will be able to balance the benefits and losses for everyone involved in the company The average CEO in 2010 that earned $11,358,445 in salary would earn approximately 57 times more than 95%
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Case #2: AutoZone Over the past five years, AutoZone’s stock price has seen a relatively steady increase. There have been some drops in the stock price during that period, but, for the most part, the stock price has been on the rise. The number of share repurchases by AutoZone during that period of time has also been consistent with the stock price as it has increased steadily. The ROIC has also mainly increased over the past five years. A share repurchase is a company buying back its own stocks
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CASE QUESTIONS 1. Why is Roche seeking to acquire the 44% of Genetech it does not own? From Roche’s point of view, what are the advantages of owning 100% of Genetech? What are the risks? 2. As a majority shareholder of Genetech, what responsibilities does Roche have to the minority shareholders 3. As of June 2008, what is the value of the synergies Roche anticipates from a merger with Genetech? Asses the value of synergies per share of Genetech. Please use a 9% weighted average cost of capital in
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further right to participate in the profits or assets of the company. These are called participating preference shares. The holders are entitled to a special fixed rate dividend and can participate further in any profit remaining after the ordinary shareholders have received. Section 4 defines a preference share as follows: ‘Preference shares means a share by whatever name called, which does not entitle the holder thereof to the right to vote at a general meeting or to any right participation beyond
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by the company to make itself intrinsically valuable, Combines stock split and re-purchase. VEP is advantageous to both Shareholders and Company! • The replacement of existing shares of shareholders with new corporations shares on 1:1 ratio • an additional $20 cash as a compensation for reduction in the value of new shares OR option for the shareholders to reinvest the $20 cash to procure additional shares • Advantage is double sided. The company’s dividend pay-out ratio
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in the decision making policy of the company. Subject to any prohibition contained in the company’s constitution, a shareholder may freely sell or dispose of his shareholding interest. In respect of the company’s existence, it is quite irrelevant that the identity of its shareholder may change. A company’s legal existence is not dependent upon the survival of individual shareholders. Accordingly, a company is said to have perpetual succession. Although one person may in effect control and execute
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Accounting Fraud at Satyam Computers March 04, 2011 BACKGROUND Satyam Computers Services Limited was a consulting and an Information Technology (IT) services company founded by Ramalingam Raju in 1988. It was India’s fourth largest company in India’s IT industry, offering a variety of IT services to many types of businesses. Its network spanned over 46 countries, across 6 continents and employed over 20,000 IT professionals. On 7th January 2009, Satyam scandal was publicly announced and Ramalingam
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Introduction Corporations depend heavily on the investments of stockholders to fund their business operations. When viewing each entity separately, the company stands to gain and grow from selling their stock. The investor stands to gain by investing in a company in hopes that their stock prices will go up and they earn a profit. In truth, both parties depend heavily on one another. The more people invest, the more opportunity the company has to grow. The more leeway for the company to grow, the
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given the difficult financial and economic conditions. In May, we undertook a fully underwritten $2.5 billion institutional share placement. In July, we completed a Share Purchase Plan for retail shareholders which saw us issue $2.2 billion of ordinary equity. Over 40% of our retail shareholders participated, making it one of the most successful Share Placement Plans undertaken by an Australian company. The new shares were issued at $14.40 compared to ANZ’s year-end share price of $24.39 representing
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company is by and large very conservative andit is debt free), its acquisition plans ( which is mainly done by cash and BKI stocks), the earningsper share, dividend per share (which will become more flexible as now the shares will be with thefamily shareholders only and thus a reduction in dividends can be easily accepted), ownershipstructure, capital structure and of course the reputation of the company in the market after thebuyback.Therefore, we can consider three scenarios and then analyze the effect
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