Synopsis: Dow is acquiring Rohm and Haas from Ingersoll-Rand at an agreed price per share of $78. However, a deal with Kuwait’s Petrochemical Industries Company, which was supposed to generate $7 billion of cash to be used to finance the acquisition, had recently fell-through. The hiccup has led to Rohm taking legal action to force Dow to complete the acquisition as required by the merger agreement. The standalone value of Rohm’s share price is currently at $46.77 while the synergies could almost
Words: 2181 - Pages: 9
BUSINESS AHP's corporate culture distinctive and this culture had several components. First, the company's culture was known to be reticence. A second element, that the managerial philosophy of AHP was prudence and had a strict financial control. For example, all expenditures that are greater than $500 had to be personally approved by Mr. Laporte, who was the CEO of AHP, even if was authorized in the corporate budget. Another important component of AHP's culture was conservatism and risk aversion. Finally
Words: 2139 - Pages: 9
of debt .................................................................................... 2 (c) Preference and explanaton between arithmetic & geometric mean to measure rates of return . 2 3. Which type of investment you value using Marriott’s WACC. What would happen to Marriott over time if company used a single hurdle rate ........................................................................................... 3 4. The cost of capital for the lodging and restaurant divisions of Marriott
Words: 2673 - Pages: 11
Hill Country Snack Foods Co. Hill Country Snack Foods Co. (HCSF) is an American-based company specializing in snack food industry. Its competitive advantages mainly base on conservative management strategies, cost efficiency, high quality products as well as solid regional position. Despite stable growth over years, one big concern raised among company’s shareholders as well as financial analysts are its capital structure. As HCSF is all-equity funding, many perceived that the company has more
Words: 1698 - Pages: 7
The payback period measures the time that it takes to recoup the cost of the investment. If the cash flows are an annuity, then we can simply divide the cost by the annual cash flow to determine the payback period Otherwise, as in the example, we subtract the cash flows from the cost until the remainder is zero The shorter the payback period, the better Generally, firms will have some maximum allowable payback period against which all investments are compared Assume that
Words: 3312 - Pages: 14
company that decide to finance its projects with external funds, maybe fi nd itself in difficult situation to pay its debts (excessive borrowing). Managers will be under pressure to make decisions that may not be in the best interest of shareholders – example: sell of value –creating assets; Conversely, a firm with too little debt may pass up the opportunity to reduce its tax payments and increase its value through tax savings. The firm’s optimal capital structure is the debt ratio that maximizes the
Words: 608 - Pages: 3
1.1 Shareholder analysis Group Limited (TGR) is the leader of producing Atlantic salmon in Australia. TGR was founded in 1986 and become public company listed on the ASX in 2003(Tassal 2014). In 2012, TGR formed partnership with the World Wide Fund and Nature Australia (WWF). TGR’s efforts in food safety, social welfare, animal welfare and, environmental and traceability aspects of the operations has earned itself the first company to achieve Best Aquaculture Practices (BAP) certification at
Words: 3006 - Pages: 13
company's capital - both debt and equity - are deducted from operating profit. The idea is simple but rigorous: true profit should account for the cost of capital. To understand the difference between EVA and its older cousin, net income, let's use an example based on a hypothetical company, Ray's House of Crockery. Ray's earned $100,000 on a capital base of $1 million thanks to big sales of stew pots. Traditional accounting metrics suggest that Ray is doing a good job. His company offers a return on capital
Words: 851 - Pages: 4
Corporation (BDK) [1] I. Introduction This teaching note describes the valuation of publicly traded equity securities using the Discounted Cash Flow (DCF) and Price/Characteristic (market comparison) approaches, with a specific spreadsheet example for The Black and Decker Corporation. Free cash flow valuation and comparables (comps) are key tools in fundamental analysis, the process of picking stocks with high expected return based on an analysis of the company. In theory, buying stocks of
Words: 5394 - Pages: 22
during disequilibrium. 2. (a) The securities market can be efficient even though the market for information is not. All that is required for efficient securities markets is that prices fully reflect all available information. Should an individual—for example, a corporate insider—have monopoly access to valuable information, then the market cannot reflect the information because it is not publicly available. This is not a deficiency in the securities market, but rather a deficiency in the market for information
Words: 11793 - Pages: 48
