effectively has MCI financed its needs in the past? In looking through case data from Pg. 2 (68 of course-pack), Exhibit 2 and Exhibit 9A, we see that MCI has gone through two stages: 1. Startup stage from FY1972 through 1977, where the firm generated negative OI 2. Growth stage from FY1978 onwards where the firm started generating positive OI The financing for the startup phase was performed predominantly through common stock as expected, followed by debt financing. During this stage, MCI had grossly
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effectively has MCI financed its needs in the past? In looking through case data from Pg. 2 (68 of course-pack), Exhibit 2 and Exhibit 9A, we see that MCI has gone through two stages: 1. Startup stage from FY1972 through 1977, where the firm generated negative OI 2. Growth stage from FY1978 onwards where the firm started generating positive OI The financing for the startup phase was performed predominantly through common stock as expected, followed by debt financing. During this stage, MCI had grossly
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Goodyear Aerospace and later worked as a contract manager at GED-Ltd, before joining MCI in 1992. During his employment at MCI, Pavlo worked in the carrier’s financial unit and was one of the group managers responsible for billing and collections for the carrier business segment. “In 1996, Pavlo began to perpetrate a fraud involving several MCI customers. When the scheme was completed; seven MCI customers had been defrauded over a six-month period, resulting in $6 million being
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[pic] WorldCom Case Study FINC 621, Summer 2015 by Hailun Cao Mohammed Altuwaijri Papamagatte Diagne Qian Dou David Ballantine Yanchao Wu Strategic Analysis – Hailun Cao Bernie Ebbers, the chief executive officer, focused on acquisition business strategy. Major Acquisitions includes Advanced Telecommunications Corporation, IDB Communications group, Metromedia Communications Corporation and Resurgens, and Williams Telecommunications group (WilTel)
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the Exhibit 9A in the case, we can calculate the Source and Use of Funds. As Exhibit 1 suggests, the company require about $4.8 billion during 1984 and 1990. This is basically due to the required new capex during the same period, which will be accumulated to $10.2 billion, and the increase of cash holding, $2.0 billion, as a use of funds and the company can generate funds from operation, only $7.8 billion. Therefore, the company needs to fill the gap by sourcing external finance of about $4.8 billion
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Early investor Bernard Ebbers was named CEO the following year. Through acquisitions and mergers, LDDS grew quickly over the next 15 years. The company changed its name to WorldCom, achieved a worldwide presence, acquired telecommunications giant MCI, and eventually expanded beyond long distance service to offer the whole range of telecommunications services. WorldCom became the second-largest long-distance telephone company in America, and the firm seemed poised to become one of the largest telecommunications
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------------------------------------------------- Case 2: “WorldCom, Inc.: Corporate Bond Issuance” Case Highlights This case is about the $37-billion bid for MCI Corp., by WorldCom – the United States’ second largest long distance phone company (after AT&T at the time). The purchase should come through by using its own stock to buy the public shares of MCI that did not belong to British Telecommunications (BT), and paying with cash the 20% stake BT held in MCI. In order to finance BT’s stake
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CASES IN FINANCIAL MANAGEMENT SYLLABUS FIN 522 Professor James A. Gentry Cases In Financial Management 343M Wohlers Hall Spring Semester 2009 333-7995 2043 BIF j-gentry@uiuc.edu Office Hours: 10:30 a.m. to 11:45 a.m.
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forced by the US Justice Department to abandon its proposed merger with Sprint in mid 2000. By that time, WorldCom’s stock was declining and Ebbers came under increasing pressure from banks to cover margin calls on his WorldCom stock that was used to finance his other businesses (timber and yachting, among others). During 2001, Ebbers persuaded WorldCom’s board of directors to provide him corporate loans and guarantees in excess of $400 million to cover his margin calls. The board hoped that the loans
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9-104-071 REV: SEPTEMBER 14, 2007 ROBERT S. KAPLAN DAVID KIRON Accounting Fraud at WorldCom WorldCom could not have failed as a result of the actions of a limited number of individuals. Rather, there was a broad breakdown of the system of internal controls, corporate governance and individual responsibility, all of which worked together to create a culture in which few persons took responsibility until it was too late. — Richard Thornburgh, former U.S. attorney general1 On July
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